Only for those with knowledge of Real Estate Investing..?
May 06, 2009 in
Questions And Answers
I am wanting to get in Real Estate, but have horrible credit, and no venture capital. I have a friend who started out by purchasing property by Tax Deed. Can anyone tell me how to do this? Also if anyone knows the laws and time limits in the state of Tn and/or GA–that would be great also.
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One comment
brian-the-brain on May 6, 2009 at 11:28 am
A tax deed is a deed to a property that in tennessee has a right of redemption of 1 year. This means if you buy it it's your house but the person that previously owned it has one year to pay you the cost of what you paid for the deed and penalties. They do not have to pay anything else, so don't go improving the house AT ALL in the first year. Unless you are just making conditions livable for yourself that actually don't cost much of anything.
Georgia has tax liens, where you pay the taxes for the delinquent person and if they catch up at some point in the year you get the money back plus 20% interest. If they don't pay it back you get to go through the process of foreclosing on the place and getting a tax deed. They auction tax liens off every month. They don't sell every lien so there are also tax deed sales where you are bidding against others for the property just like you would in TN.
The key point to the whole exercise it that you need money up front and not just some of it. You need a bunch, so you will likely not be able to unless you have money.
The best way to buy property if you have horrible credit and no one to lend you a bunch of money is to do one of two things.
The first is to find someone that owns the property free and clear and only needs a monthly income from selling it to you. They sell it to you and you make payments to the escrow company and they get the money each month. You just have to find a nice person that wants to give you a chance, keep in mind they will still be protected and if you have bad credit and plan to keep having bad credit then you shouldn't do this as you will lose the house pretty fast if you quit paying if the contract is done properly to protect the seller.
The second way is to go to a real estate investors meeting, I hear that one of the biggest clubs is in atlanta and meets most nights of the month on some topic. There you will teach yourself about how to do it and then do the work for someone else at first (bird dog- means you will find a deal and then for a small fee sell it to an investor) small fee to the investor of $5,000 might however seem large to you. Then you beg to let you help them out and teach you (for free) and once you have the experience you can then offer to get a piece of the profits on the next deal for doing the work while they watch over you.
you will need to be very motivated to make this happen. Good luck.
there is a program on wednesday nights from WNKU called real estate for real people. It might be a good thing to listen to, they have a podcast as well. Jus tto become familiar and start your education process.
http://www.podcast.net/show/39906
good luck
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