Working on first deal... - Posted by Abel B. Ramirez II

Posted by Abel B. Ramirez II on July 04, 2002 at 01:39:33:

I think your message has some good merit and not jsut because it agrees with me. I have had the realtors tell me this same thing, though like someone else replied it very well could ‘cloud’ the title. I am still learning what all that means, but…

Going back to what I DID say…I am wanting to put a contract on the house for $90K w/ a clause that the IRS liens must be cleared. If by doing so I get the opportunity to do something on my part to lower and let the owners pay off or liens be totally removed then I don’t see why not. Unless the whole ‘clouded’ title is going to be a big problem?

-= Abel=-

Working on first deal… - Posted by Abel B. Ramirez II

Posted by Abel B. Ramirez II on July 03, 2002 at 17:36:24:

I am still new to REI and I am working on a house with the following specifics.

It is a preforeclosure and the people are in deep. The house has a mortgage with a balance of $89,900 and TWO IRS liens totaling $22,000. It is half of a duplex that has been listed since NOV of 2001 and the other side which is identical sold about 3 months ago for $120,000. It needs carpet,linoleum and inside paint to look nice ($10,000?).

Now the IRS liens are the big drawback. Would it hurt any to put a contract on the house with a clause that says they must first make the IRS liens disappear and offer $90,000 for the home? The bank is ready to foreclose.

If I do put an offer on the house with that clause about the IRS liens what kind of deal should I make based on the fact I have little cash and no ‘GOOD’ credit.

I could flip the property and maybe make $3K - $4K or is that too much?

I could use hard money IF I can get it and hold on to it and either rent/lease or fix-up and relist. Remember I don’t have alot of cash ($2000).

Could I do (I am still learning about this) a subject to IF the bank will allow it and take over the payments. In which case I WOULD need cash to catch up on the payments, right?

Any help would be appreciated.

-= Abel =-

move on - Posted by Donald

Posted by Donald on July 04, 2002 at 04:43:19:


Forget it and move on to the next ‘deal’.
my 2 cents

Re: Working on first deal… - Posted by Kristy

Posted by Kristy on July 04, 2002 at 01:15:35:

Abel, if this is your very first deal, DON"T EVEN THINK ABOUT IT!! I agree with Jeff, there is no money to be made. When there is an IRS lien, that clouds the title even after foreclosure for usually 3 to 4 months. You are better to leave this one alone and find a workable deal with some money in it for you! Plus, you mention you would buy the property if the owners had the liens wiped out. Now if they are in foreclosure, how are they goin gto pay $22,000 to the IRS. Not likely!! Find your next deal and make some real money. Good Luck

Re: Working on first deal… - Posted by jeff

Posted by jeff on July 03, 2002 at 19:36:38:

it appears to me you need to leave this one on the market. i see 122K after repairs invested by yuo into the property. if the other side only sold for 120K, where is your profit? as far as flipping, forget abuot it, your out of luck here. nobody is gonna give you another 4K on top of the 122K they are gonna be out already for a total of 126K for a house worth 120K.

in doing a subject to yuo dont need to inform the bank of your doings. if you do, they will stop you in your tracks even if you make up the backpayments usually. as far as assuming a loan with a DOS clause (does yours have this), ive heard that you can do it but i have yet to succeed, the banks always tell me NO when i try to assume it.

looks like this one is not for you unless you feel comfortable working with foreclosure auctions. if your new, your better not off fooling with those either. and to tell you the truth, im not totally sure the IRS liens will be wiped out by the foreclosure. what type of liens are they?

leave this one for the pros. but i doubt if they want it, unless the foreclosure is in their bag of tricks.

Re: Working on first deal… - Posted by Abel B. Ramirez II

Posted by Abel B. Ramirez II on July 03, 2002 at 20:33:17:

Good advice about the subject to, thanks. As for the deal itself, no not a good deal for anyone if the IRS liens stay, but IF the IRS liens were not an issue would the deal look better? My intentions are NOT to take the property unless the IRS liens are removed from the property. What then?

-= Abel =-

Re: Working on first deal… - Posted by Brian M. Powers(MI)

Posted by Brian M. Powers(MI) on July 03, 2002 at 20:54:37:

if you have the house under contract for what is owed and you can prove to the irs that there truly is no equity in the home, there is a good chance they would accept and payoff of the leins at a huge discount…and a good chance they will write off the lein all together if there is no equity in the property.

SHORT SALE !!! - Posted by Juan

Posted by Juan on July 05, 2002 at 13:38:50:


Just like Brian talks about getting the IRS to discount, you can also get the bank to take a SHORT SALE.

Have your title company do a title/lien search just to make sure the IRS does have a lien or that there are any other liens besides this one.

It sounds like time is not on your side, but I would recommend getting educated on short sales. It helps you make equity when there is no equity.