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Newbie Question

rainforrester profile photo
  • Friday, February 20, 2004 @ 04:36 AM EST
  • 8 Comments

I have recently made an offer on a fixer that has 50K in back taxes. The seller is the son-in-law of the owner and will sell this in the next month or so. I'm hoping its to me.

But, what i am wondering is if back taxes are 50k, how would i go about finding if i can buy the leins directly for this property? Is that even possible? Since i know this will sell soon, the state will get their money and the investor paid off. Or am i in error here? I have just a rudimentary understanding of tax liens.

Anyway, just looking at this deal from different angles. Any help will be appreciated as always on this awesome site.. oh oh

Comments(8)

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    cmyke12th February, 2004

    Just remember that in most states, if not all, tax liens are senior over all other liens. If that lien is not taken care of immediately, you may be stuck holding the bag. Make sure you're prepared to take care of that first and foremost and find out if there is still time to take care of it.

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    RonaldStarr12th February, 2004

    rainforrester---------------

    In some states, liens are sold to the public. First you have to know if that is so in your state. Oh, I see you are in Oregon. I grew up in Oregon from about 5 years old until after college.

    No, OR does not sell liens. So, you cannot buy the tax lien.

    Now I don't understand when you say the son-in-law of the owner is "selling the property." Do you mean that this person is marketing the property and that the title owner is still alive and willing to sign the deed and other papers related to a sale? If not, how can you buy the property? Does the son-in-law have power of attorney or is a conservator of the estate of the title owner?

    Good Investing********Ron Starr***********

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    rainforrester13th February, 2004

    hey ron thanks for the info.

    the house is in a trust and the son-in-law is the trustee.

    So, if oregon is not a tax-lien state, does that mean oregon has nothing in place to collect back taxes? my understanding of tax-lien states, is the state sells to investors to get the money they need for the infrastructure. Investor gets sizable return when state collects from homeowner.

    so oregon gets nothing until the bill is settled? thanks for the help in understanding..

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    InActive_Account13th February, 2004

    50K sounds like a lot for a property tax lien. I would suspect with a tax lien this large it may be an IRS lien. Put out a little money and have a title company do a preliminary title search. Something in this does not smell kosher.

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    RonaldStarr13th February, 2004

    rainforrester--(OR)------------------------

    Michael Chandler has a good point. I was also wondering at such a large tax bill. However, I just assumed that this is a very valuable property.

    If it is an IRS lien, it may be able to buy the property and pay only a portion of what is owed to get the property released from the lien. The lien is not removed from the person, but is from the particular property.

    Right, in the "deed" states, such as OR, the local taxing entities--not the state--do not get their tax money until the property is sold at tax auction. They usually get a pretty hefty interest rate on the delinquent properties, though. Here in CA it is 18% a year, or 1 1/2% a month.

    Good Investing***********Ron Starr***********

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    nomad112516th February, 2004

    I guess I'm confused here. I thought if the property was sold, the liens on it would be paid off with the money from the sale. If this is true, what is the reason why it cant be purchased before it is foreclosed upon?

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    RonaldStarr16th February, 2004

    nomad1125--(TX)-----------

    We are talking about OR here. Every state has different laws related to the collection of delinquent property taxes and tax sales. What we say about OR is not relevant in TX, which has very different laws.

    Good Investing*********Ron Starr*************

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    active_re_investor20th February, 2004

    Quote:
    On 2004-02-13 03:25, MichaelChandler wrote:
    50K sounds like a lot for a property tax lien. I would suspect with a tax lien this large it may be an IRS lien. Put out a little money and have a title company do a preliminary title search. Something in this does not smell kosher. <IMG SRC="images/forum/smilies/icon_confused.gif">


    Two things. You can get a preliminary title report without having to pay anything. Just contact a title company.

    OR allows older residence to defer (somehow) the taxes. I was talking to a hard money lender who was part of a deal where the back taxes extended for 27 years. Something over $90K was paid back as part of the sale.

    Do not assume that a large amount implies a valuable property of IRS liens. It could just be taxes for a lot of years.

    John

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