I’ve been reviewing all my homes taxes to make sure everyone is caught up and of course a few of them are NOT! A few are over $1k behind. I really don’t want to eventually lose homes due to county foreclosure, nor do I feel like lending the tenant money with a promissory note on a home he isn’t the official owner of record on anyway.
Has anyone ever purchased the tax lien from the county and then held it a year and if still unpaid try to take a senior position as lien holder and then foreclose it to get the title?
Hi @TexasMHP. I am new to this business but your post wasn’t clear. Im just curious…are the homes yours (since you say “reviewing all my homes taxes”)? If they are not, then are they not in the tenants name because they never got the title?
I’m about to try that with a home in one of my parks. Get a tax deed and just evict the previous owner, who is of course a deadbeat that hasn’t paid rent either for months , thanks covid BS
Actually interested in more thoughts on this - I also have tenants who are behind on their tax payments on their homes. How are more experienced operator handling this?
In Texas when you purchase at county tax auction it wipes out the other liens. If the owner comes back in 6 or 12 months (depending if it was their homestead) to pay those back plus a 25% fee it can be redeemed, otherwise yours free and clear after that.
If you’re going to check their taxes are paid are you also going to make sure they have a fire policy on their home? Sort of the same logic, but it bleeds on the edge of getting in people business - but hey if you’re in a super hot market you can probably do it and still be full.
You have a lot of levers to control this too in various scenarios. New buyers must pay back taxes prior to move in, take title due to abandonment, first right or refusal on purchases, non renewal if you cannot provide proof of payment of taxes. These are complex issues and state laws vary.
I just recently allowed one of the homes in my park to go to auction as an experiment. Here they send the tax notices to the Land owner ,not the home owner. So the tenant owner owed around 650 which I had warned them they needed to pay or the home would be sold at auction and they basically said since the tax bill was sent to me in my name they weren’t going to pay it and believed I owed it instead. So somebody bid 2200 on the home at auction. I haven’t heard from the successful bidder yet ,but I intend to inform them that they will also be responsible for the 2000 the tenant owes in back rent before I will allow them to remove or do anything with the home. As the listed taxpayer I can pay the back taxes plus interest and redeem the home, but I don’t want it (it’s complete junk even though the tenant lives there), I sold the home to him over 2 years ago. This is just an experiment to see how it actually shakes out…I don’t intend to redeem , just want the new buyer to start paying lot rent if they actually want the home. I suspect they are just thinking they’ll earn some interest on their money and were not actually interested in owning the home. We will see…
I have never done a tax lien on mobile homes that are in a park, but I’ve done a couple for SFHs and I’m afraid you may end up with a surprise on your hands as you execute your plan. Generally tax lien sales will wipe out debts and other liens for the home. I will be surprised if you have standing to collect the $2k the previous owner owed you before letting the new owner do what he wishes with the home.
Your understanding that you, as the listed tax payer, can now pay the back taxes and redeem the home after the lien auction sounds off to me as well, but I’m sure this varies state by state with homestead acts and what not.
Good luck though.
Edit: Yeah I just said basically what jutson said. Oops
Thanks Nate. While that is true, a Mechanics lien placed After the auction , as it is still on my property, doesn’t get wiped out. But again, this is just a little experiment, I don’t really want the home or the back rent. In TN the taxpayer has 12 months to redeem, with 12% interest paid to the purchaser. Originally I figured I would just buy it at the auction to get a new tax deed and evict the tenant but some uninformed person decided to bid 2k on a home worth nowhere near that. If I redeem this month it’ll cost me an additional $24, that is not expensive as far as education goes. But I’d rather just let the new person take it , which I will sign whatever is needed to let them have it, I’m only interested in the future occupancy of the lot, which I actually own But again, just an experiment to see what would happen and learn something
But again, just an experiment to see what would happen and learn something