Nevada Supreme Court Rules in Favor of Investors

On September 18th, 2014 the Nevada Supreme Court delivered an unexpected ruling in favor of the savvy and adventurous Investors in Las Vegas who had taken a gamble and purchased properties through HOA Foreclosure auctions. The Nevada Supreme Court ruled that the bank’s first lien position had been completely wiped out, which means that all of the Investors who purchased HOA Foreclosure properties (sometimes for as little as thirty cents on the dollar!) now own the properties with no loans against them. The gamble that these Investors took has now paid off as millions of dollars in equity was created in a single day.

The majority of these properties are now completely rehabbed and rented out through property management programs with all liens cleared and all HOA dues and taxes up to date. These properties are insured, managed, and hold a steady cash flow with excellent rates of return. Some of these properties remain un-rehabbed, presenting an excellent equity position for the Investor who wishes to experience the fix and flip opportunity, or for the new buyer who wishes to fix up the home on his or her own to their exact liking. While these properties now contain clear title, please keep in mind that some of these properties are in owner occupied or rental restricted communities, and the new owners will have to abide by all rules and regulations of the existing HOAs.

If you were not one of the Investors who took the gamble before the Nevada Supreme Court ruling passed, fret not. An opportunity exists for you to still purchase these HOA foreclosure properties for less than retail value. VIP Realty Group is presenting an exclusive opportunity for Investors to purchase these properties at 67% of retail value. This is still a tremendous discount from their true value! Why would anyone part with these properties at only 67% of their value instead of full retail price? This is because even though the banks no longer have first positions on these properties there still may be some legal (attorney) wrangling needed to clear title fully and to get these properties in a position that allows them to be re-sold with clear and marketable title.

Every investment has its risks but the risk involved with these HOA foreclosure properties has significantly dropped. Even if purchased at 67% of their retail value these properties present an excellent opportunity for real estate Investors to earn instant equity in great properties!

For more information on how to invest in one of these great properties contact Glenn Plantone, Broker/Owner of VIP Realty Group and local HOA Foreclosure expert, today!

Glenn Plantone     (702) 656-3264

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The Advantages of Investing In HOA Foreclosure Properties

We are all familiar with banks foreclosing on properties, but did you know that Homeowner Associations (HOAs) can also foreclose on homes? HOA Foreclosures have increased over the past year, and in doing so have created an excellent opportunity for investors to pick up discounted properties in the Las Vegas market, sometimes for a little as $.20 on the dollar!

As a Las Vegas Investor, I have personally taken advantage of this opportunity, and have had particular success buying HOA Foreclosure properties through auctions rather than receivables. Auctions take place as trustee sales or private attorney auctions where investors can purchase HOA delinquent receivables for homes, townhouses, and condos. These properties have already been foreclosed on, which makes it easier for the investor. The other option is to buy the delinquent properties directly through the HOA and foreclose on the properties yourselves, but this method is far more complicated, especially since HOA boards are extremely difficult to deal with in Las Vegas.

By purchasing at an HOA Foreclosure auction, the investor is essentially purchasing the foreclosure deed for the property. This deed is then recorded and grants the investor legal possession of the property. Due to the current Nevada super priority lien law, the investor who owns the foreclosure deed has ownership rights superior to those of the bank that holds a note on the property.

Once the property is purchased the investor has many options. If the home is vacant, the property can be renovated and rehabbed so that it can be rented out for a steady cash flow. While this is being done, the investor can hire an attorney to negotiate directly with the bank to go after Quiet Title of the property or to purchase the property from the bank for a discounted price of the current market value. If successful, the investor can own the property free and clear, having purchased what could be a $100,000+ property for $35,000 or less!

If the property is occupied with a renter at the time the foreclosure deed is purchased, the investor can take over the management of the property by having the tenant sign a new lease and have rent paid directly to the investor (now functioning as the new owner). If the tenant refuses to pay rent, the investor can proceed like with any other rental and evict the tenant.

Things are a little trickier if the property is occupied with the former owner at the time the foreclosure deed is purchased. There are three options the former owner can choose: stay in the property, sign a new lease, and pay rent as any other tenant would do; stay without paying rent and ultimately get evicted (unlawful detainer) by the new owner in about a two month period; or the former owner can move out voluntarily, in which case the new owner can rehab the home and get it rented with a new tenant as soon as possible.

Gaining possession of the home is very important as it allows the investor to control the rental and management aspect of the property; however, the investor does not possess a home with free and clear title, so he/she cannot sell the house with title insurance in place. This does not mean that the house could not be sold, but rather the new buyer would not receive free and clear title, and as such could not get title insurance on the home, just like the investor when the property was purchased at the HOA foreclosure auction.

So why would anybody purchase a property that did not have clear title and would be difficult to re-sell? Simply because the benefits outweigh the risks. Yes there may be more work involved than with a traditional property, but investors can purchase homes with great equity for staggering low prices, and if they are successful at winning free and clear title, they walk away with a great investment. Every investment comes with some amount of risk, and HOA Foreclosure properties are no exception. With a myriad of ways for the investor to procure free and clear title, the chances are in his/her favor of succeeding. Even if the investor is unable to achieve free and clear title, he/she can hire an attorney to negotiate a deal with the bank to recover as much of the investor’s investment as possible. While this is happening, the investor can continue to hold on to the property and take in rental income which reduces the investor’s risk every month.

Bottom line HOA Foreclosure properties present a new form of investing that provide investors an opportunity to purchase a great property with huge equity for incredibly low prices. This investment opportunity has a tremendous upside and very little downside based on the current legislation and history that I have witnessed as a Las Vegas Investor. I have personally purchased and sold about 70 of these HOA foreclosure properties and aided about 100 other investors in this process.

If you are interested in learning more about how to take advantage of the HOA foreclosure auctions, or if you would like to purchase an HOA foreclosure home, feel free to give me a call directly. I can answer any and all questions and describe in detail how I have been able to partner with investors to purchase the HOA foreclosure homes for 20-30 cents on the dollar and manage them effectively while getting the maximum return.

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Great Time to Sell Investment Property in Las Vegas

Since the beginning of 2013 home prices in Las Vegas have risen considerably, even as much as 40% in some locations. This has created a nice equity position for a lot of Investors. As prices slow down to a more reasonable rate, an opportunity exists for Investors to move recently gained equity into larger and more productive properties using the 1031 Tax Deferred Exchange Strategy while also deferring tax liability.

The outlook for the real estate market in Las Vegas is very positive as many projects that were on hold for the past several years are now being completed. New residential builders have begun building new subdivisions throughout the city. Several new water parks have opened up recently in the southern part of the valley, plans for large commercial developments are moving forward, and large developments that were on hold are now being completed. An upward pressure on prices now exists in Las Vegas as demand increases and supply remains low.

Using the 1031 Exchange Strategy the Investor can defer payment of Capital Gains, which is an excellent vehicle to leverage equity while prices are still affordable.

There are some requirements Investors have to take into consideration when utilizing the 1031 Exchange Strategy. These include:

  1. Property must be exchanged like kind for like kind, such as Real Estate for Real Estate. This can be Single Family Homes for Commercial units, Multi-Units, or even Land. Other property can also be exchanged, such as Vessels for Vessels or Aircraft for Aircraft, but this article will focus on Real Estate.
  2. Properties must be held for Investment or in connection with a trade or business.
  3. The Investor must purchase properties of greater value than the property he/she is considering relinquishing.
  4. The Investor must re-invest all proceeds from the sale of the relinquished property into the replacement property.
  5. The Investor must re-acquire debt equal to or greater than debt paid off from the relinquished property, or replace the debt with additional cash.

To take advantage of this strategy, an Investor has to complete the dual parts of the transaction: transferring (sale) of the relinquished property and acquiring (purchase) of the replacement property. The Investor must acquire title to the replacement property in the same manner as title was held in the relinquished property (there may be some exceptions to this rule).

The Investor must meet two deadlines, both of which begin on the date of the transfer of the relinquished property. The replacement property must be identified within 45 days after the completion of the sale of the relinquished property. The exchange must be completed either within 180 days from the date of the closing of the relinquished property, or the due date of the Investor’s federal income tax return together with all extensions.

The Investor must also follow the identification rules to successfully complete the 1031 Exchange Strategy. The replacement of the properties must be made in writing and signed by the Investor. There are two common rules to follow:

  1. Three Properties Rule: three properties can be identified without regard to their fair market value.
  2. 200% Rule: any number of properties can be identified as long as their combined fair market value does not exceed 200% of the fair market value of all of the relinquished property.

By following these steps and taking advantage of the 1031 Exchange Strategy, Investors can utilize the equity gained from increased home prices to purchase more productive properties before home prices drop again and stabilize.

Interested in exploring the advantages of using the 1031 Tax Deferred Exchange Strategy to accelerate your equity position in your real estate holdings? Call (702) 656-3264 anytime for a personal consultation with real estate expert Glenn Plantone, Broker/Owner of Vegas International Properties Realty Group. With particular specialization in Investor clients, property flipping, and HOA Foreclosure homes, Glenn Plantone has a unique and advanced knowledge of the real estate industry and can help transform the current equity position of your real estate investments into a performing and profitable portfolio.

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