nance, here is what happened: This guy had won a great three-bedroom/two-bath- room property in South Carolina at auction, and it was pretty clear that the homeowner was not going to redeem the property. The investor thought this would be a pretty open-and-shut deal and that he would soon have a great fix-and-flip under his belt. He would have, but the neighbors had other plans. What wasn’t obvious at first look was that the neighbors had been enjoying not having anyone in that property. They had even started using the garage for storage! The investor had been to look at the property and knew it seemed abandoned, but he did not realize that some of the junk in the garage that appeared to have been “left behind” had actually been placed there by the neighbors, who were enjoying the free self-stor- age option provided by the vacant home. When the investor started clearing out and cleaning up the property, the neighbors turned up to get their stuff. But it was not until he put the newly renovated property on the market and the roadkill started turning up on the porch that he realized they were pretty upset at the idea of having new neighbors. Although there was never any outright vandalism of the property, things sort of came to a boil when a dead raccoon was lying on the front porch the day of a big open house. It was nasty, stinky, and no accident. Al- though the house eventually sold, it sat on the market far longer than it should have because when buyers came by to look at the property, the neighbors would come out and talk about how noisy the neighborhood was at night or how they were sick of the cops getting called all the time and, of course, there was that pesky roadkill issue to deal with. Lesson Learned: The negative-neighbor issue can be hard to predict in advance, but you can try to get an idea for the property by stopping by personally to see how the neighbors react. Once you realize you have an issue, then regular surveillance is key until the property is sold. Expert Advice: The PIP Group uses various methods of security and surveillance to keep its properties safe and secure during the renovation and sales processes. NO. 2 Too Many Good Deals Make Your Strategy Go Bad Once investors get past the idea that investing in tax liens and tax deeds is too good to be true, they some-

times swing way too far in the other direction. They buy far more properties than they can handle, and they often pay too much at auction. Do not assume everything at auction is a good deal just because you can get good deals there. A great example is the investor who spent his entire sev- erance package from his former employer on tax lien invest- ments. He was holding tax deed certificates and tax liens on a total of 10 properties! Unfortunately, he had no idea what to do with them all once he had them. He had trouble keep- ing track of which properties were still in the redemption period and failed to handle the foreclosure process correctly. Ultimately, he ended up just letting four of the prop- erties go completely and never foreclosed or collected the money he was owed. He did eventually get through the process with the other six, but it cost him time and money that he had not anticipated spending. His excite- ment cost him thousands of dollars because he was not willing to start with a more modest portfolio. Lesson Learned: Just because you can acquire a huge number of properties at a tax sale does not mean you necessarily should. Most investors buying on a larger scale opt to work with investment man- agers who are equipped to keep everything on track throughout the process. Expert Advice: The PIP Group manages capital funds for more buying and management power than any one party could have if they were operating alone. property, and you need to decide if you want to fix-and-flip the property or turn it into a cash-flowing turnkey rental. Suddenly, you see two eyes peering out from behind a dusty curtain. You realize the door is locked (and not with the new locks you put on it, but with a padlock) and you can see some furniture through the window. You head next door to see what the neighbors know about your apparent squatter. They tell you her name is “Candy” and she has been there for nearly a month. You didn’t see her before you acquired the property because she is, they say, “nearly invisible and no trouble to anyone.” No trouble to anyone…except you. Thanks to some pretty aggressive renters’ rights laws in the state where you acquired the property, you cannot just evict “Candy” even though she is not really your tenant. She managed NO. 3 An “Invisible Tenant” Who Won’t Leave Imagine this scenario: You walk up to the front of a vacant house. You recently acquired the deed to the

28 | think realty magazine :: february 2020

Made with FlippingBook Online newsletter