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Friday, April 22, 2011

MONEY: Finding A House, Working Smarter, Not Harder

How do you work smarter and not harder, make your money work  for you and stay out of debt.  The next paragraph is from an E-mail to my niece.  I think the advice could apply to anyone trying to find a home. The second part has more details on buying a piece of property at tax sale.
Hi Again, Thought I explained enough in the blog, maybe I need to revue it.  Basically take the time to drive around on country roads or pay attention when you happen to be out in the country.  Your looking for houses that look like they are not being kept up, mowed or basically look abandoned.  Stop and ask the neighboring houses what they know on the house.  Sometimes out of state people buy farms for investments and never go visit them.  To them it is a tax thing.  Other times it belongs to a local person or farmer and they are living elsewhere for whatever reason.  Sometimes it was a family members house and they don't want anyone to live there because of the memories.  You can usually turn this type around if you mention all the hard work the person put into building it and that it is sad to let it go.  Anyhow once you find out who owns it, then you try to cut a deal.  Maybe you can cut yards, or feed livestock, fix fence, drive a tractor, basically try to sell it as a deal that you can work out the rent.  Make sure you pay yourself good.  Figure $15 to $20 an hour and guess what the rent would be.  If it would be like $500 a month, then you agree to work 30 to 35 hours a month. That is just six to eight hours a week to have a place to live.  The rest of the time is yours to do with as you please.  You need to please make money so you have independence. If they include the utilities give a little more.  Basically it takes being bold enough to ask.  Most will say no, but your only looking for one to say yes.  You can run a classified saying you want a place in the country and will work for rent.  Just whatever you agree to, make sure you give 120% on your end.  Make them happy and it can last a long time.  Sometimes they just need somebody to take care of it temporary till they can find a buyer for a deceased persons house. If the people like you and that you take care of the property you may be able to turn it into a nothing down contract.  Do not be pushy, but if you decide to turn it into a contract.  Make it in writing.  I recently finished paying off a contract that was done on a handshake.  I had my receipts and tax papers, but no written contract.  When we agreed to the contract we were in our late forties and going to live forever.  Randy, my friend, moved out of the area, divorced and remarried and moved again.  Then he came down with cancer.  His wife at the time he died was very nice in honoring the contract.  The local lawyer made me produce paperwork to prove we had an agreement.  Remember it was his word and mine and he was dead.  Fortunately I had copies of all our correspondence and the fact was clear that I had agreed to pay it off, but had problems following thru because of his illness.  It was a stupid thing to do, but we did it.  We had been talking how in the old days things were done on a handshake and so we agreed to do it that way.  Let me say this, I was lucky to be dealing with reasonable people it could have turned out bad, very bad.  You can find them in town the same way.  It just takes being bold.  Just make sure they have your name and address in case they change their mind or think of somebody who might be able to help you. Make sure they know you are not destitute, that you have a property, but you just need to get on your feet so you can fix it up.  If they let you have a garden space you can make some good money and cut your food bill.  It takes being motivated enough to pursue it and don't forget to ask the Lord to prepare your path and open the hearts and doors.  It can work believe me.  Read Joshua 1:8 in the King James.  Who does the Lord say will make things happen.  You will, you have to get up and do it.  Hope that helps....Keep me informed how it goes.  If nothing else you could then get a renter who can fix the house on Bates for their rent.  When they are done you can start getting some rent or move back in yourself.  As far as your house you should talk to some habitat for humanity people and see what they can do to help you.  It is a thought.  Later, pray it works for you, Turtle
    Another way to get a house cheap is to get one at a tax sale. Different states and local laws vary, but basically you make a bid on a property and pay any back taxes that are owed.  At the end of a year, two years in some states. The property becomes yours if the original owner fails to come forward.  That is free and clear and no liens on the property.  Some are in good condition and some are falling down.  Your job is to do the research required.  You can go to the auditor or assessors office and usually find out the name of the owner.  Then you can get on the computer or go door to door in the neighborhood and find out what you can about the home.  Try to find one with no mortgage on it.  The bank usually waits till the last minute and then exercises their lien.  The neat thing is that in most states you get back the money you paid with interest and you can usually add on a small administrative fee for your work.  The trick is to find the property that you have no competitors on and that no one is going to contest the sale with you.  If they do redeem the property your usually not out anything.  You just have to find another property at the next tax sale and start over.  If you can find a property of an old person, who is deceased, with no heirs, which is more common than you would think.  You may get a house for a few hundred dollars or under a thousand anyhow.  You are the one who has to do the detective work and find out the information. Once you get a house, you can fix it up, move in or sell it.  Whichever is the most beneficial to you.  It is a neat way to get started in the property rental game.  You can rent properties for years and then sell them.  The rent is your income and the sales money can become your retirement fund.  My daughter usually starts a contract with a renter for an extra months rent.  They agree on a price, the interest and the term of the loan and draw up a contract.  The neat thing about doing this it that the renter is then the buyer.  Any maintenance, taxes and other upkeep become the buyers reponsibility.  If you have virtually nothing in the house and sell it for a profit at the local market value it does not take many house to generate a comfortable income.  A couple houses into it and you can hire the work done instead of doing it yourself.  The main thing is you need to learn how and what to look for when buying a property. How to do a good inspection or a reasonable person to do it for you.  You do not want to buy another persons headaches.  Remember I am writing this mainly for the person who is unemployed and needs a place to stay, but it can be turned into a business by about anybody who is willing to put in the effort. The down side of renting is that when something goes wrong you are the one the renter calls.  So you need to make sure you are able to meet the responsibility.  How much you can do yourself and save money depends on the local zoning board and rules.  Small towns in the country tend to be more liberal and let you do more.  However property values are also usually less and it may be harder to get renters for houses.  The trick is to make money but offer a good enough deal that people prefer to rent from you. Your renters will find you renters if you are and do.
    One last option which is tricky, but can get you into a home cheap is find someone who has a house they want to unload cheap.  Especially someone who just wants out of their situation.  This usually works for a person who has a job and can afford the payment, but you have to be very careful and you have to make arrangements for the payments to get to the bank or loan holder.  I have seen people get in a house this way and then get thrown out on their ear.  They were paying the person they made the deal with, but the person they made the deal with just pocketed the money and ran our on them. Being careful is the key word.  You can help yourself, but you can burn yourself also. 
  Any comments, questions and opinions are welcome and will be answered to the best of my ability. Thanks for taking the time to read my blog, I hope it helps you.

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