Deal #3 Update: $6500 tax lien

Scott Costello All, Blog, Featured 7 Comments

Deal #3 is moving right along as we travel towards the April 4th closing date.  My partner is doing a great job of keeping this deal moving along.    For those new to investing it is one of the most important things you can do when you have a wholesale deal.  Always stay in control and make sure everyone is doing what they need to be doing.  Call the title company every day if you have to, keep your buyer and seller informed at all times and just be on top of things.  It is VERY IMPORTANT!

Clean Out

Our seller has until next Monday to clean out any belongings that they would like to keep, and are actually taking it upon themselves to get a dumpster and clean out the rest of the junk.  I good lesson, because we normally tell the sellers they don’t have to worry about the mess, as we (or our buyers) would handle all the clean up.  It never came up in conversation/negotiations and the sellers just assumed they would do it.  Works for us!

Also our buyers want a chance to look through the house, after the seller grabs what they want, and claim some of the furniture for their staging business.  This could be a good extra source of good rapport building with this buyer.  Maybe we offer them the chance to claim furniture in future deals even if they aren’t the buyer.  Just thinking out loud.

Tax Lien

One potential stumbling block with this deal was that the title work turned up a $6500 tax lien on the property.  This made me nervous because anytime you have to bring up to the seller that they are going to have to pay additional money at closing there is potential for a deal falling apart.  They just might not have enough money to cover it.   Turns out the the seller expected some “taxes owed” and her only question was if she should pay it now or wait till closing.  We told her to wait till closing or she would have to write 2 checks then.  Better to just deal with it one time only.

Finding Future Buyers

We are using this house to help us find future ( and backup) buyers even though we have a buyer already.  Before continuing to market the house, we asked our buyer if that would be okay and explained what our intentions where.  She was good with it.

The plan is to put up signs in the area and throw some craigslist ads up.  When we get someone who is interested we show them the house and explain to them that we have other people interested but will be getting more houses like this in the future.  We don’t want to burn any bridges so we are being honest with our intentions.

Next step is closing!

 

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Comments 7

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  1. Looks like you have a good deal here and things seem to be going smother that could have been expected – especially no complaints about that tax lien. I have 13 rentals house but have just purchase 2 houses to flip. The first has a contract and I may make over $50k (fingers crossed). The second should be ready to sell this week. I give all the details at my blog – I would welcome you opinion.

    I have never wholesaled a house. I have an offer on another house and think it will go through. If so, I may try to wholesale for the first time.

    Thanks for you info.

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      Hi Don,

      Wholesaling a house is all about purchasing it at a good price (which I’m sure you know and have done). The rest usually takes care of itself. Although I will say that things like getting a clean title and keeping lawyers out of the mix is not always easy, especially here in NJ.

      Good luck on the 2 houses you are going to be flipping!

  2. That is a good strategy you got there to keep on building your buyers list. Plus it’s good to keep any other buyers as backup in case your main one goes away.

    Glad to see the progress you are making with your investing.

  3. I haven’t came back to your site in a while but to know that you clearly know what you doing here and well present to potential the upfront of Tax Lien and still have them go forth with it well that’s just grand. Having experience in the Tax Lien business most buyers tend to stay away but glad to hear they were expecting to at least pay some owed taxes.

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      The best policy with tax liens and deals is to be upfront with your sellers and tell them they are responsible for all liens. Other wise the deal could fall apart at closing when the seller says “I thought you were paying all fees?”

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