Go inside Jenna Phipps’ ambitions renovation of abandoned home
Content creator Jenna Phipps and her partner have taken on an ambitious home renovation.
Question: Our son recently graduated from college with a finance degree. He is convinced that the way to make a fortune is to buy property tax liens for “pennies on the dollar” at the auctions by the County Assessor’s Office for delinquent property taxes, held every year in February.
Our son says that if, after at least three years, the property owner doesn’t reimburse him for all of his costs, he can foreclose on the property. My son says it’s a “win, win” investment as he comes out ahead either way. He now wants his mother and me to give him $40,000 to buy a property tax lien on a $1.6 million home. The title report shows a $620,000 mortgage on the home (which my son says means nothing because buyers of property tax liens take priority over mortgages), and also an old 2004 sewer easement (which my son says also means nothing because the sewer was already built in another location). Sound like a good investment, or am I missing something?
Answer: If an investment sounds too good to be true, frequently it is! No matter what, caveat emptor is still the rule. For example, what is the condition of the home? We were involved with a $850,000 newly built home in the Gold Canyon area that didn’t sell for two years. The seller finally accepted an offer. During the 10-day inspection period, however, the buyer discovered that rats had eaten all of the wiring, and that the home had major mold damage. Not only did the buyer back out, the home had to be destroyed.
Have a question about real estate law? Email Christopher Combs at info@combslawgroup.com.