Over the last year, I have purchased 36 houses in Las Vegas for my flipping fund. Many have been occupied which required me to facilitate the occupant's departure.
Irvine Home Address … 64 GRANT Irvine, CA 92620
Resale Home Price …… $640,000
There's a note on the door..
Eviction notice
“Listen, one of us is leaving,
and when I say US I mean YOU…
YOU'RE leaving.
(You're leaving… You're leaving.)”
I'm in the house y'all,
I'm in the house y'all
And ain't no little piece of paper gonna kick me out y'all!
Sage Francis — Eviction Notice
Some foreclosure and eviction cases can be heartbreaking. However, we live by rule of law in this country, and unless we want to start giving away real estate to those with the saddest story, these evictions must take place.
Elderly woman, 101, in tears as she's evicted from her home and her possessions are thrown into dumpster
- Texana Hollis's son failed to pay her property tax
- Detroit woman had lived at her home for 58 years
- Rushed to hospital after eviction over heart attack fears
By Paul Thompson
Last updated at 7:44 PM on 13th September 2011
A 101-year-old woman has been evicted from her home of the last six decades after her son failed to pay property taxes on time.
Texana Hollis's possessions were thrown into dumpsters after bailiffs moved to take her house in Detroit, Michigan.
The 101-year-old was left in tears and disorientated after she was ordered out of the property that has been her home for the past 58 years.
That is about as sad as it gets. The house was paid off, and the 101 year old woman lived there for 58 years, and now she is homeless.
Officials said her 65-year-old son Warren had failed to pay property taxes for up to seven years.
Although the home was owned outright by Ms Hollis he had ignored repeated warnings that they faced eviction.
Now we see what is really going on. The son wasn't paying the property taxes. My guess is he wagered nobody would foreclose on the home as long as his aging mother lived there, so he just stopped paying.
What was the taxing authority supposed to do? Let these people live there tax-free? What about the other taxpayers who aren't getting a free ride?
Perhaps if we pass a new law that says if you live past 95, you don't have to pay property taxes, then it might be okay. It might not be a bad law. But until that law is passed, regardless of age, people have to stay current on property taxes if they want to stay in their homes. This house was enjoying the benefits of police and fire protection without its owners paying a fair share of the bill.
Warren said: ‘I kept it from her because I did not want to worry her.’
He also admitted that he knew they faced eviction, but thought it would not happen.
Yep. He bet they wouldn't foreclose and lost. What a fool! Whatever bad circumstances befall this man, he richly deserves. It's his fault, not the foreclosing tax authority.
Ms Hollis wept as she told her local TV station that she only found out about the back taxes the night before she was evicted.
Hours after being evicted Ms Hollis was rushed to hospital over fears she might have had a heart attack.
Friends later said did not suffer a heart attack, but was stressed over the incident.
I can only imagine how awful that must have been for her.
With no place to stay a neighbour agreed to let Ms Hollis and her son stay at her home temporarily. But neighbours are questioning why the local authority would want to turn a 101-year-old woman out on to the streets.
‘This woman needs to be back in her home now,’ one angry neighbour said.
Local businessmen are looking to see if they can pay the back taxes to allow Ms Hollis to move back into her home.
I hope they raise the money to pay off the tax bill. They should keep a lien on the property, and the moment this lady passes on, they need to boot the son to the curb with no mercy.
My family's eviction story
My grandmother's blind sister was 82 years old when she was evicted from her paid-off family home for a highway construction project. True story.
Rather than wait a few more years for this ailing elderly blind woman to pass on in her lifelong home on the lake in Friendship, Wisconsin, the Department of Transportation decided it was time to straighten out a dangerous corner around the edge of the lake by wiping out my great-aunt's home.
This incident was very sad, and my great-aunt died in a nursing home shortly thereafter emotionally devastated by the event. Her son kept the bitterness alive for years thereafter.
My senior citizen eviction story
When I bought 19 Tierra Buena, Las Vegas, NV 89110, it was occupied by a widow whose husband had passed a few years earlier. Since they lived in Las Vegas, any stored savings they had in home equity was wiped out in the housing crash. She quit paying in 2008 and got about two and one half years of free housing before the bank finally foreclosed. Jacki and I were both saddened by her circumstances.
We offered her $500 to leave the property, and she agreed. We sent her a check to the address she gave us, and it was sent back to us. The post office couldn't find her at the address she gave us. After a couple of weeks, we still hadn't heard from her.
My conscious was bothering me, and one night I woke up at 3:00 AM thinking about this poor woman. It occurred to me to simply mail the check to the 19 Tierra Buena address to see if the post office would forward it to wherever she really was. Jacki resent the check, and a week later, it cleared our account.
I could have saved $500. She made no attempt to contact us after she left. I couldn't live with the idea of saving $500 at the expense of a widow.
My least favorite former property owners
These stories were so irritating for me they are worth recanting again here….
Squatters on my dime
I have one property I purchased in November, and the former owners are still squatting there. The former owners pulled an interesting legal move. They had the wife file for bankruptcy in her maiden name a few days after the foreclosure auction, and they put the property into the estate. Well, our search didn't pick up the bankruptcy because it wasn't in the owner's name, so we began foreclosure proceedings. Late in the process, the bankruptcy attorney accuses us of harassment, and we had no idea what he was talking about.
Once we discovered the suit, we had to initiate our own suit to have the property removed from the bankruptcy proceedings. They didn't own the property when they filed, so they can't obtain protection from the bankruptcy court to stay there. If they had filed before the foreclosure, they would have had other rights, but if they had filed before the foreclosure, it would have shown up in a title search, and I wouldn't have bid on the property.
The cost of all this legal maneuvering is expensive. The time to properly evict these people has been costly in two ways. First, the declining market means my resale price is declining while i wait. in addition, I have opportunity cost on money tied up in a non-performing asset. I am not a bank. I can't amend, extend, and pretend I am making money. I either sell quickly for a profit or I don't profit.
Ye ol' crack house
By far the most bizarre story I have is a property I purchased in October.
Back in 2005, a recent Salvadoran immigrant obtains his citizenship. With his workman's salary and a penchant for liar loans, he puts together an empire of 8 properties in Las Vegas from 2005 to 2007. The last of these properties was his crown jewel — the property I bought.
The property is in a older Las Vegas neighborhood called Spring Valley. The neighborhood is dominated by ranch style houses ranging from 1,400 SF to 1,800 SF. It has seen better days, but this is not a bad neighborhood. It is mostly median income middle-class families trying to get by.
My property is the large 5 bedroom home at the end of a cul-de-sac. It is the only one in the area with a large pie shaped lot with an outbuilding and RV parking. Back in 2007 when Vicente the Fox, our recent immigrant, bought this property with his liar loan, it was the finest property on the street.
Vicente the Fox began using his large property as a salvage yard. He put individual locks on all the bedroom doors and leased out the rooms to boarders and skimmed their rent. He tried to convince them to keep paying him even after I bought the house.
The boarders were united by their love for crystal meth. There is no evidence this place was used as a meth lab — thankfully — but when the constables came by to evict the last boarders, they confiscated a cigar box full of used pipes and other paraphernalia. In the two weeks after we took possession, the house was broken into three times.
The amount of junk on this lot is staggering. There are eight automobiles on this property, and none of those are in the garage because the garage was full of stuff. All eight cars are in the back and side yards. There were 4 working refrigerators on the property, a dirt bike, an air conditioner, anything and everything you can imagine, and lots of it.
I call our former owner Vicente the Fox because he carefully avoided us whenever we tried to serve him formal eviction papers. He didn't live at this house, and his former address is an apartment where he skipped out on the rent. However, since I was unable to serve him, I could not fully divest him from the property and the junk sitting on it.
He teams with a local
attorneybandito to shake me down for wrongful foreclosure, stealing his property, and so on. Since I couldn't get him served, his weak case was strong enough to tie me up in court for a while. I settled.Surprisingly enough, it turned out in my favor because when I let him back on the property to get his stuff, he cleared out much of the garbage along with the stuff of value. My worst fear was him picking over the good stuff and leaving me with a $5,000 mess to clean. He took a number of paint cans and other items that would have required me to bring in special disposal teams.
There is no good resolution for this property. I will lose money on the deal, and Vicente the Fox will have a roving pile of garbage scattered at friends and acquaintances houses all over town.
Eventually, this property will get sold. Hopefully, it will be to a good family that restores it as the jewel of the neighborhood. That's the outcome I want.
Flippers are maligned for bringing down the quality of life in neighborhoods. The reality is that the delinquent former owners are the ones who brought down the neighborhood. Flippers like me are the ones taking back the crack houses from rent-skimming former owners and putting families back into them.
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I just rented Stober Court to a section 8 government assistance tenant. I had no idea such tenants could get $1,350 monthly rent allocations. She nearly broke down in tears when she saw the cleaned, painted, and repaired property. I felt good about that one.
Let's not forget, New families find the houses lost in foreclosure.
Merry Christmas and happy new foreclosure
I bought this house on December 7, 2010. The above was the actual picture of the property I used to evaluate it as a potential flip taken the morning of the auction.
Do you see the carefully groomed landscape and the Christmas reindeer in the front?
These people liked this house, and they didn't want to lose it. I was buying it eight days before December 15th when the local constables who handle evictions stop all activities for the holidays.
Was I going to be Grinch this year?
Cash-for-keys
I always prefer a negotiated settlement to eviction. It takes too much time to evict, and the occupants aren't too careful on their way out with their belongings.
These former owners have few tenant holdover rights. If i want them out, I can have them forcibly removed in short order. In Nevada, they get a 5-day notice to get out followed by a 3-day notice before the constable arrives to remove them by force if necessary. This is dangerous work, and they do carry weapons.
Technically, the former owners owe me rent from the day of the foreclosure sale. The typical negotiation is to offer free rent for three weeks with cash incentives if they move out quicker. The cost of money dictates that i can offer up to $500 per week if they are out early, and it improves overall revenues and profits.
I wasn't about to expedite an eviction to see if I could kick this family out two weeks before Christmas. We negotiated a deal where they could stay until January 10th if they agreed to leave certain appliances, be careful when moving furniture, leave the fixtures and fans, basically leave the place undamaged so we can do preparations for sale quickly and with limited expense.
Sue for unlawful foreclosure
We needed to exchange written documents, and they avoided meetings until it became apparent to us that these occupants did not intend to follow through on their agreement. Just before Christmas, we received a lawsuit notification, and with the justice system basically shut down the last two weeks of the year, we had no options, and the holdover owner got one last peaceful Christmas in their former dream home. I truly hope they enjoyed it. Denial has its rewards.
On the 3rd of January, we filed suit to get them removed, and after some legal finagling, we got a 30-day notice filed with a calendar set to expire in early March. These owners genuinely believed they were somehow going to keep this house. After more than two years with no payments, their house was called to auction, and now they are no longer on title. Only their bodies and their possessions remain.
As the eviction clock is winding down, we get a communication from the owners asking us if our original cash-for-keys offer was still on the table. They would get out that weekend if I gave them $1,500. Of course, my first thought is, screw you, you're willing to take my money after lying to me, suing me, and generally pissing me off. Go to hell! After a few moments to think rationally, I sent Jacki over with a big smile on her face to agree to their demands.
They got out in a weekend, I got the house in immaculate condition — I knew any loan owner in foreclosure who bothers to put out decorations and maintains their yard that well probably maintained the inside well. They did. We got the house on the market the next weekend (last weekend) with minimal fix up expense.
A bitter pill to swallow
These former owners loved this home. Jacki told me they were very bitter about the entire situation, the failed appreciation, the failed dodgy loan, the failed loan modification, the failed attorney savior. Despite the anger and bitterness, after telling their story, they were polite to Jacki when she inspected the property and paid them off.
When I think about borrowers like these, I do wish it had turned out differently for them. This particular family were peak buyers. They paid $399,991 for a property I bought 5 years later at auction for $170,000. The comps have weakened since I bought this property, and I will likely have to discount it to move it. These owners owed double what this property is worth today. What were they supposed to do?
The new family that buys here will enjoy a substantially lower cost of ownership. instead of the $2,500+ monthly cost the former owners had, the new buyer will spend less than $1,200 a month to live in this place. These people won't have HELOC riches any time soon, but they will have a cost-of-living that leaves them enough spending money that the HELOCs aren't necessary.
What is the best resolution for properties like this one? Do we give every existing loan owner principal reduction to keep them in place? Forgive the Ponzis their debts at my expense? I wouldn't feel very good about that one. Would you?
Do we allow them to squat forever and deny the new family their home? Perhaps foreclosure is a good solution after all.
The angry immigrant
When I bought 1915 Canterbury, the house looked unoccupied from the photographs. When Jacki went over and had the locks changed, she found an empty house. No furniture, no beds, not kitchenware, no obvious signs of habitation. However, she noticed the coffeemaker had recently been used. There were a few items of food in the refrigerator, and the bedroom floor had a bedroll sitting on the bare wood floor. She thought this was odd, but there were no other signs of occupancy.
About 30 minutes goes by when a little Russian guy pulls up, barges in the house and starts screaming at Jacki. Fortunately, she was there with the locksmith and the burly landscaper who weren't keen on the way this man was speaking to Jacki. It nearly came to blows.
The police came in and Jacki negotiated the deal of cash for keys with two law enforcement officers standing over them. He got $750 of the $3,000 he was asking for, and we got to keep some of his appliances. It turned out okay, but it was a harrowing experience.
The unemployed
Most of the occupied houses I have purchased have unemployed former owners squatting in them. From what I have observed, strategic defaulters tend to move out before the foreclosure date and get on with their lives. It's the people who have no other options that stay on in the property. I offered all these people the chance to stay on as renters, but none of them could afford it.
370 Manzanita was occupied by a musician who worked infrequently during the recession and didn't make his mortgage payments consistently. He also tried to get $3,000 cash-for-keys, but when we explained to him we could evict him for $500, he thought it wiser to take the money.
3225 Rose Valley was occupied by an unemployed construction worker. He had no money and no prospects. We gave him $500 and sent him on his way. I have no idea where he ended up, but it was undoubtedly not as comfortable as the place he left.
112 Rancho Vista was occupied by a construction worker who recently found work in Mexicali, Mexico. He was coming home on weekends to see his wife and kids. Rather than take the cash, we offered them to stay on for three weeks. They got their affairs in order and moved out by the agreed upon date. They were struggling, but the father was a hard worker doing what he could to support his family. I hope they make it.
I could go on, but this post is long enough.
Evictions may seem heartless, but we have these laws in place for a reason. If occupancy was the only requirement for ownership, our entire system of property ownership and finance would cease to function, and thuggery would determine who got to live where. Most often people who are being evicted have made poor choices. Remember, Responsible Homeowners are NOT Losing Their Homes.
This guy needs to be kicked to the curb
My parents have embraced the political Left for as long as I can remember. The housing bubble has caused them to disagree with the anti-foreclosure nonsense coming from the extreme Left. When I end up foreclosing on someone, they tell me they don't have much sympathy for someone who took hundreds of thousands of dollars of free money then got to squat for two or more years. Quite honestly, I don't feel much sympathy for that group either.
The property records on today's featured property are rather unusual. The last recorded sale was on 9/15/2000, but the owners at that time issued a Quit Claim deed to a different family on 12/18/2001. If it was an all-cash sale, no amount was recorded. The new owner waited about a year then took out a $397,500 first mortgage. Then the fun began.
- On 10/6/2003 he refinanced again with a $472,000 first mortgage.
- On 11/15/2004 he opened a $183,000 HELOC.
- On 9/20/2005 he refinanced with a $650,000 first mortgage.
- On 1/11/2006 he opened a $100,000 HELOC.
- On 3/1/2007 there is another loan for $409,000. It is difficult to tell if this was a first, second, or third mortgage. It doesn't seem likely the guy paid the mortgage down $350,000 to make the $409,000 a first mortgage, but it also doesn't seem likely this house once appraised at $1,050,000 to put this mortgage in second position either. Very strange.
- In any case, the guy stopped paying before July 2010 and was issued an NOD in October. He has been squatting ever since.
Foreclosure Record
Recording Date: 01/24/2011
Document Type: Notice of Sale
Foreclosure Record
Recording Date: 10/21/2010
Document Type: Notice of Default
So what do you think? Should this guy be allowed to continue to squat, or should he be kicked to the curb?
——————————————————————————————————————————————-
This property is available for sale via the MLS.
Please contact Shevy Akason, #01836707
949.769.1599
sales@idealhomebrokers.com
Irvine House Address … 64 GRANT Irvine, CA 92620
Resale House Price …… $640,000
Beds: 4
Baths: 3
Sq. Ft.: 2675
$239/SF
Property Type: Residential, Single Family
Style: Two Level, Other
Year Built: 1978
Community: Northwood
County: Orange
MLS#: P788875
Source: SoCalMLS
Status: Active
On Redfin: 56 days
——————————————————————————
Prime Location in Northwood. Fabulous Floor Plan with Spacious Bedrooms. Bright and Airy Floor Plan with Great Layout. Open and Stunning Kitchen. Loverly Oversized Master Bedroom and Great 2nd Master Bedroom on Main Floor. Gorgeous Wood Flooring and Carpet. Beckyard Features Beautiful Pool and Hacuzzi that Perfect for Entertaining. Attend Irvine's Award winning Schools. Great Opportunity for a Great Neighborhood. 'No HOA and No Mello Roos'
——————————————————————————————————————————————-
Proprietary IHB commentary and analysis
Resale Home Price …… $640,000
House Purchase Price … $358,000
House Purchase Date …. 9/15/2000
Net Gain (Loss) ………. $243,600
Percent Change ………. 68.0%
Annual Appreciation … 5.3%
Cost of Home Ownership
————————————————-
$640,000 ………. Asking Price
$128,000 ………. 20% Down Conventional
4.20% …………… Mortgage Interest Rate
$512,000 ………. 30-Year Mortgage
$123,552 ………. Income Requirement
$2,504 ………. Monthly Mortgage Payment
$555 ………. Property Tax (@1.04%)
$0 ………. Special Taxes and Levies (Mello Roos)
$133 ………. Homeowners Insurance (@ 0.25%)
$0 ………. Private Mortgage Insurance
$0 ………. Homeowners Association Fees
============================================
$3,192 ………. Monthly Cash Outlays.jpg)
-$411 ………. Tax Savings (% of Interest and Property Tax)
-$712 ………. Equity Hidden in Payment (Amortization)
$192 ………. Lost Income to Down Payment (net of taxes)
$180 ………. Maintenance and Replacement Reserves
============================================
$2,441 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$6,400 ………. Furnishing and Move In @1%
$6,400 ………. Closing Costs @1%
$5,120 ………… Interest Points @1% of Loan
$128,000 ………. Down Payment
============================================
$145,920 ………. Total Cash Costs
$37,400 ………… Emergency Cash Reserves
============================================
$183,320 ………. Total Savings Needed
——————————————————————————————————————————————————-
Kick todays featured post to the curb! A lot of sad stories of foreclosure and evictions, but when it comes down to it, the free rent has to end some time. Post like today are “owners” with a sense of entitlement, LV evictions are just people trying to make it day to day. Either case, people will find a way to get by.
You got that right. I think people have realized that “owning” a house can be pretty lucrative if the shit hits the fan and you stop making payments. As we are seeing, people can live free for YEARS.
Try that crap in an apartment you are renting. The landlord will have you and your belongings on the street in 90 days.
$1350/month for Section 8 housing subsidies. Why the Eff do I get up every morning and bust my ass so I can come up with MY rent payment every month. This gravy train needs to stop. What does a crappy apartment in LV rent for…I would imagine much less than $1350…that’s what these people should be getting!
The eviction of the 101-year-old for nonpayment of property taxes speaks to the need to find a more equitable way to fund municipal needs than the property tax, a tax you pay over and over on something you already own.
The property tax means you never really own your property. Thanks to the “appreciation” of the past 30 years, a homeowner can easily find himself paying taxes that are twice or more the mortgage and total payment he bargained for when he bought his property.
The principal reason to buy to begin with is to get your housing cost under control and OWN a property; to have something that, once you pay for it, cannot be taken away from you. The property tax is like rent that can be raised endlessly, and it makes home ownership rather pointless.
A more equitable way to tax would be to raise user fees and change the way we charge for municipal services. For example, in Chicago, St. Louis, Detroit, and other old northern cities, single family homes and multifamily homes with 3 units or fewer get free city trash collection, and get billed a flat rate for water no matter how much they use, while large multifamily bldgs. must pay for their own private trash collection and their water is metered. Well, time to meter everyone’s water and make everyone pay for trash collection, which will inspire people to cut waste and practice economy- no more leaving the lawn sprinkler running through a cool damp weekend.
Fees can be raised for licenses and permits, and rates for water and other utilities provided by the city can be raised.
Most of all, the tens of millions of dollars in subsidies and grants typically awarded by most towns and cities for things like evermore big box retail and shopping malls could be steeply curtailed or ended all together. It is totally tragic that a friend here in Chicago, in the suburb of Schaumburg, was taxed out of his home that he could well afford when he bought it 10 years ago, to pay for the glut of failing shopping malls in that municipality, most of which would never have been built were it not for the tax abatements and TIF subsidies offered on the premise that these places would improve the tax base. My friend’s taxes started at a reasonable $2200 in 2010 and were $8800 when he was forced to ditch his house at a loss because he could no longer meet the expense of the place.
This is happening to many paying owners and to many others who paid their mortgages off long ago as cities that overspent and over-committed in the boom years are desperately searching for revenue. Many “bargain” properties don’t look like such good deals when you look at the tax bill, and realize that it could double or triple next year- while (in Chicago at least) a landlord is permitted to raise your rent no more than 5% over the previous year’s.
In California, we have proposition 13 to limit property tax increases when appreciation gets out of control. Nevada has a similar cap on the rate of property tax increases, but their law allows for larger increases than California’s proposition 13. I personally find Nevada’s law much more equitable.
The main problem with Proposition 13 is the disparities it creates over time. Some homeowners in the same neighborhood end up paying a small fraction of the taxes their neighbors pay. The worst problem is how commercial and apartment owners avoid tax increases. When proposition 13 was passed, commercial real estate paid about half of the local tax burden. Since then, their share has fallen to about 30%.
Right IR, we should *lower* everyone’s property taxes to Prop 13 levels that long time owners pay. Cut spending. Why doesn’t anyone ever mention that instead of raising the taxes? Go look at the rate of spending increases in California (37% in 3 years under Gray Davis) and tell me why that is necessary when other states haven’t done it.
Property taxes are offensive. They are a tax on unrealized capital gains. The Founding Fathers are rolling over in their graves.
Or, we could fix your property tax to the amount you willingly agreed to pay for a property and allow for reasonable increases annually.
Wait… Oh… That’s what Prop 13 does already? Hmm. Sounds fair to me!
The easiest way to reform proposition 13 is the make the adjustments more “reasonable.” Rather than capping the adjustment to an arbitrary 2% per year, it should be tied to the CPI. Seniors can’t argue the increase will harm them because most are getting CPI adjustments on their Social Security.
Nevada sets the yearly maximum increase at 3% which must more closely mirrors inflation historically, and they have higher allowed rates of increase for investment properties which eliminates the unfair subsidy enjoyed by commercial properties here in California.
That’s reasonable.
I know this has become a stupid buzzword from the right, but “certainty” helps. I want to know what my property taxes are going to be when I buy a house, and be able to project with reasonable certainty where they’ll be in 10+ years.
Why not just reform Prop 13 by making the adjustments “deferred” instead of eliminated? Some people would just call it a sales tax, but whatever you call it, why not get back the lost tax money when a house is sold for a huge profit?
I’ve seen plenty of homes on Redfin where it’s clear that the sellers bought the home in the 60s or 70s for $30K and are selling for $700K. I know they will end up paying some income tax on $200K of that, but why not make them pay back the subsidy of lower payments they’ve enjoyed for decades? I am only talking about profits – if a seller only breaks even on a home after 30 years, their taxes shouldn’t have gone up anyway.
The purpose of Prop 13 is noble – keeping older people from losing their homes to skyrocketing valuations. But if they cash in on those raised valuations, aren’t they then reaping the benefit without paying the price over the years? It would be political suicide for any politician to propose a tax like this, so it’ll never happen, but it sure would help solve California’s budget problems and, I think, be more fair for Californians of all ages.
I think the most “reasonable” reform would be to lower property taxes by 2% per year.
Just a note to you Californians. I’m here in Illinois paying $13,200/year in tax on a house that might sell for $270K. It’s 4100 sf on 1/3 acre of green grass in peaceful Chicago suburbia. Our property taxes are killing our home values. We plan to protest the $420K assessment, but I’m guessing the corruptocrats will simply play dumb. The only good news is I’m refinancing into a 15y fixed at 3.25%. I thought 4.375% was super low two years ago, but the rates keep going lower. I’ll take what I can get.
I was about to make, and absolutely agree, with Future’s point.
Should homeowners have to pay the cost of fire and police protection? Absolutely.
But I believe that senior homeowners should be relieved of their responsibilities to pay for schools, community colleges (especially their endless parade of bond overrides, which are often approved due to clever election scheduling by the districts) and other property taxes which aren’t used by senior citizens and add up to an increasingly expensive burden as one ages while living on a fixed income.
It is indeed manifestly unfair that one can never truly own one’s property; the government must always be paid rent on it. Fire and police protection ought to be obligatory; beyond that, I support the efforts of some states (like Arizona) to either freeze or cap property taxes/property tax rises. Nobody should have to be forced to sell their home simply due to valuation rises accumulating over a very long period of ownership.
sorry, it was Laura’s comment, not Future’s.
Do CA property taxes even cover the cost of police/fire/roads and other ‘essential services’ in CA cities?
And under your model, who pays for schools? only people with kids? do commercial properties have to pay for schools?
typically, commercial properties do indeed pay school taxes.
I have no children and never will, and I pay school taxes without complaint. (though I do get irritated with the endless parade of bond override elections, which are typically scheduled during August when many are on vacation but the educators and administrators are not working and make sure to vote YES)
Schools need to be funded but it is manifestly unfair to ask seniors – who are often on fixed incomes and have surely paid their fair share over the years if they’ve lived in the same dwelling for the 30 years it typically takes to pay off a mortgage – to keep paying and paying more and more every year for the property they supposedly ‘own’.
I live in a low property tax state. In 16 years my property taxes have approximately doubled, in some part due to tax rises and in some part due to appreciation because my purchase was timed quite fortuitously and the location is quite desirable. So in another 16 years there will be a further rise in my taxes which I estimate to be 40%-50%, in some part thanks to the very limited appreciation in home values we’re going to see over the next decade.
By the time I “pay off” my house, I’ll owe a monthly rent to the government of at least $300 a month. A rent I’ll never pay off. Fortunately, I live in a state which caps property tax rises for seniors.
Do other homeowners pay more in property taxes as a result? Sure. I think this is a quite fair state of affairs. Our society recognizes in a number of ways that seniors are often on fixed incomes and ought to be treated differently because they (hopefully) are no longer in the workforce. Everything from the existence of Social Security to senior discounts at businesses recognizes that retired people are no longer in the workforce and don’t usually have the prospect of simply making more money in order to keep up with rising taxes and cost of living.
I repeat my argument: property taxes are simply renting from the government. Abolishing them is never going to happen, but nobody should be forced to sell their home because they can’t afford the property taxes, simply because of appreciation over a lifetime of ownership.
Perspective said it much better and more succinctly than I; property taxes are a tax on unrealized capital gains. We don’t tax investors on what their unsold equities are worth.
If you are married the first 500K profit is tax free, 250K if single. That’s not in line with standard capital gains taxation. Imagine if the stock market was like this?
I hate Prop 13 because it screws young buyers and helps inflate any desirable area of CA. People will literally die in their homes due to Prop 13, even though the homes are far from ideal for older people (i.e. 4 bedroom, 2 story house for grandma).
Fire and police … and roads, library, public transport and the paid services that are probably not 100% paid by user fees at least when they need to be replaced or upgraded: water, sewers, garbage pick up, and the regulation and inspection services that everyone loves to hate but the longtime homeowner finds useful even if only as a deterrent to shoddy work when maintenance is needed. In a city, the utility and value of your property is completely interwoven with all of the infrastructure around it. Detroit, anyone?
renato: But I believe that senior homeowners should be relieved of their responsibilities to pay for schools, community colleges
So the old folks got taxpayer-subsidized education when they were younger, and they get taxpayer-retirement and healthcare when they are older, but now you think they shouldn’t have to pay for the next generation’s education? Sounds like an AARP ad to me!
-Darth
‘Course, by this token, then people with no kids or kids in private school should be relieved of their responsibilities to pay for schools too…. I have a paycheck, and that *is* my fixed income.
“I just rented Stober Court to a section 8 government assistance tenant.”
Which one was stober court?
Stober Court is the disaster property previously owned by Vicente the Fox. The one with the pictures of all the trash.
These stories convince me never to buy a foreclosure. You should be able to stick a gun in these deadbeats’ faces and throw them out by force. The idea you had to *pay* that Russian to get out with the cops standing there is outrageous.
People living for free for 2 years are victims? What about people who never bought a house with a liar loan and rented the whole time in some shitty apartment?
And $1350/mo of taxpayer money to rent a house? God help us, no wonder why this country is doomed economically.
What this country has turned into makes me really sad.
The $1,350 in government assistance shocked me too. It never occurred to me anyone would get assistance for rent to stay in a place well above the median rent in the area.
We can be thankful that the Section 8 program is being steeply curtailed and slated to end.
I know a couple of property owners here in Chicago who cater to the Section 8 market. Tenants here can receive up to $1400 in subsidies, because the allowable rent is based on area averages, which are arrived at after “averaging” the $2400 Streeterville luxury apt with the $400 a month Grand Crossing shanty with same number of bedrooms, to arrive at an “average” that does not reflect the local market- in this case, a ragged slum- at all.
The result has been to drive up the prices on truly crummy properties to close to what much better properties in better parts of town cost. Now that the program is being rolled back and fewer people every year can get a Section 8 voucher, the prices on these properties is dropping to reflect what potential tenants can come up with out of their own pockets.. and that is practically nothing. Thus you are seeing houses that sold for $140K at the peak on Chicago’s south side drop to $30K or less, which is what they’re really worth based on what their market can pay.
The Section 8 program is supposed to be discontinued and replaced with something else. What, I can’t imagine. It needs to be replaced with nothing at all. Rental subsidies have destroyed our city neighborhoods and driven the prices of low-end housing beyond prices that the working poor and even lower middle class can afford. The very poor are housed very expensively while lower middle income people and the working poor who are still too “rich” to qualify for housing assistance are priced out. This creates demand for yet another misconceived government program, called “rent-stabilized” housing for the lower middle income renter, driving market rents sill higher. Everyone ends up paying more, while the taxpayers get hosed. The only people who benefit are a few landlords and government workers.
IR, I wish you luck with your Section 8 tenant. I hope she turns out to be a good tenant who does not damage your property and bring problems to the neighborhood, and I hope she pays her share of the rent that is not covered by the voucher. But I doubt it, based on what I’ve seen of Section 8 tenants. Good luck.
You can get foreclosures w/o tenants/squatters. Just pay attention to the listing. It should include that information.
One of the big problems with the liberal left is that they are moral cowards.
They cannot ever bring themselves to allow someone to have to live with the consequences of their actions. Instead, they “courageously” go after those who actually produce wealth and use a bunch of hype and shaming tactics to gain the political power necessary to transfer others’ hard-earned money.
It reminds me of what I saw during the Hurricane Katrina event. Tons of pasty-white, obviously well-fed liberals showed up at the White House to wave their little “shame on you” signs at Bush, rather than do something meaningful like help at the Katrina clean-up.
I ceased to look at lefties like actual adults a long time ago. Instead, I consider them to be overripe adolescents.
when speaking of ‘moral cowards’ in hyper-partisan terms, you might want to consider:
1) the senior officials of the Bush/Cheney administration who have never and will never bear the consequences of their disastrous policies, first and foremost being the staggering cost in lives and treasure of their unnecessary and incompetently-run Iraq war. Not to mention the opportunity cost of not getting the job done in Afghanistan while taking that detour through Baghdad.
2) the Wall Street banksters who put the economy on its knees in the first place. How many of them have been called to account in a court of law? It’s either zero or damned near zero.
3) the politicians who aided and abetted the above by falling for/being bribed into moving forward the deregulation of Wall Street which set us up for the Great Recession. These politicians came from both parties, but since you’re of a mind to be hyper-partisan about this, I’ll point out they were chiefly Republicans and their ringleader was Phil Gramm and his wife Wendy.
Moral cowards exist all around us. I suggest you put down the Ayn Rand, turn off the Fox News and Rush Limbaugh, and open your eyes.
Renato, it is off topic but I think you are interested in the subject of the execution of the wars in Afghanistan and Iraq and thus should take the opportunity to gain much more information…not from partisan sources but from many first hand accounts available as books and documentaries. It may change your view. Any time someone uses the buzzword ‘treasure’ in talking about the wars I know he or she is reading from the partisan Left hymnal.
Also the Financial Modernization Act that allowed commercial banks to get into investment banking (including proprietary trading) was signed into law by Bill Clinton with the support of Alan Greenspan. Otherwise knows as the Citigroup Act (the Travelers/Citibank merger depended on it) this was legislation that Wall St really wanted. To clinch Clinton’s support the Wall St types promised to support Hillary’s carpetbagging Senate campaign, which of course they subsequently did.
I for one would like to see more of the people involved on Wall St – especially from Goldman and Lehman – brought up on criminal charges for their conflicted actions (touting and selling the CDO’s while betting against them) however I’m not holding out hope. Our current President is deeper in Wall Street’s pocket than the previous.
Jack: very eloquently put. Although I hate bush too for spending money we didn’t have. We need a young libertarian or better yet, to have the two party system done away with.
One thing I know for sure: B. Hussein Osama is not the solution to what ails us.
Did you hate bush at the time he was wasting the money, like I did when I WAS a republican or did you only start seeing that as a way to block president obama’s policies… It took bush 8 years to mess up the country I’m willing to give the current president till next November before I pass judgement.
I hated him when he was wasting money and signing uncovered liabilities into law that had he had no way of paying for (medicare drug plans, wars, etc, etc). Bush continued the de regulation of the wall street crooks that clinton and bush sr. had started in the previous administrations, and look where we are now. I used to be a “republican” back before I realized that those effers on wall street NEED to be regulated and back when I thought the free market was the solution but clearly it is not….at least not in the financial industry.
B. Hussein……………..he’s owned by wall street as well and continues the nonsense of spending money nobody has. He’s the worst thing that has ever happened to this country in every way I can think of. Only slightly worse than Bush though. To me the most important thing are the “financial policies” of the govt, which really haven’t changed in 40 years: spend spend and spend money that nobody has. I think about expatriating allot and would if I had more time to look into it.
This country is circling the drain. It’s just a matter of time before all us common folks have been officially flushed.
jack, like the scarecrow in wizard of oz, needs to get a brain; although i don’t think he desires one as much as the scarecrow did.
a story of “walking away my house” here:
http://beta.fatwallet.com/forums/finance/1080374/
Jack
I would think that you loved the protests; Bush was just paying the consequences of his action or lack of action in his job, that is what you are asking for personal consequences.
Then we should go after that water boarding thing correct, we have tried people for war crimes for the same thing, we should not go after the criminals that did this all the way to the top. That is what you are asking for personal consequences.
Then we should go after those corporations that avoid paying taxes, no use of the courts, no roads, no army, no government contracts, nothing that taxes pay for , that is the consequences of their actions.
I think I could start to get behind this consequences thing.
Water boarding!? Wow, that really takes me back! Man, the lefties are are freaking out since Obama has proved to be a complete and total failure. How about all that fine union labor? They are doing their best to destroy Illinois. I’d get the hell out of here if I could.
Great stories, love reading about your experiences IR!
Moral confusion is also a common attribute among the liberal left.
I’m sure you would have also preferred waving a little sign to actually helping.
That is the effeminate nature of most lefties – a preference for scolding and shaming, even while they benefit from the actual dirty work done by others. Police, miltary, real volunteers.
Even if I could convince you that the Katrina response was more the fault of the state authorities, even if I could convince you that waterboarding is RIGHT, even if I could convince you that Bush’s economic policies were good, I would not.
Why? Because it would remove all the satisfaction of it angering you. I WANT you to think Bush is a war criminal because it increases my sense of satisfaction that he is going to go “unpunished”.
By the way, we totally stole the 2000 election from Gore. Worked like a charm. And there was nothing you could do about it.
🙂
>That is about as sad as it gets. The house was paid off, and the 101 year old woman lived there for 58 years, and now she is homeless.
In fact, Texana Hollis obtained a reverse mortgage in 2002 and used the house as her ATM. Nonpayment of property taxes is a breach of the mortgage contract.
Only the government could give her money on the dilapidating house in Detroit.
Ok, here are the numbers.
The house costs almost nothing, but the government has given her $80 thousand.
“Records from 36th District Court in Detroit show HUD bought the home at auction in December. It would have taken $78,935.02 to stop the eviction proceedingÂs, according to Chief Judge Marilyn Atkins.
The home has an assessed value of $5,215, and the $778.44 summer tax bill has not been paid. “
Holy Mother of God, an $80K reverse mortgage on that crappy little house?
The reverse mortgage is up there with the Pay Option ARM in being one of the most diabolical financial instruments ever invented.
Somebody sold this ignorant and (possibly) mentally incompetent ancient woman on the idea she could live off the equity in her house. Many elders are losing their homes because of reverse mortgages written during the Rampage. My elderly mother receives endless solicitations, but she is thankfully a retired accountant with a high degree of financial literacy. The favorite marks for this type of product were poor elders with limited education and no financial experience, like a 90-year-old sharecropper’s daughter who left school in 3rd grade back in 1929 and spent her working life scrubbing floors.
Irvine Renter. It is obvious you are part of the sociopathic vipers that destroyed America. You come across as flippant and mean spirited at others misery. You in fact delight in it.
I will inform every associate I have in the area not to do business with you.
I hope you fail miserably.
I’m part of generation x/y, and I often feel like anyone older than me is a viper. I don’t own a home and have never been able to, and if I did I only would have lost a fortune in the crash of the decade. Still can’t own a property in a place like So Cal due to the welfare being given to current homeowners.
My generation won’t get the full benefit of their entitlements like the older generations will.
So who exactly are the vipers? IR handled his business with some semblance of compassion, so I don’t know what you’re talking about.
Society is structured to serve 50 year olds. This is essentially due to our belief that seniority and experience should be rewarded by high income and security.
When I was in my mid 20’s I thought as you did, that I would never have it as easy as those a generation ahead of me. But, as I have gotten older, and enjoyed ever-higher income for being roughly as productive as I was when I first started working, I have noticed the rewards of age kicking in.
I don’t agree with this system, but I doubt it will change for generation Y: many of you will make large amounts of money for sitting on your ass in a nice office, or be rewarded handsomely for rent-seeking, just as it has ever been.
Hocus: That’s the dumbest thing I’ve ever heard.
Hocus is a troll. Don’t feed him.
Hocus is here to Poke Us.
“… facilitate the occupant’s departure…”
Did you used to work for the DOD’s press department? lol
Ahh yes Section 8…how government funnels middle class tax dollars to rich land owners.
“This house was enjoying the benefits of police and fire protection without its owners paying a fair share of the bill.”
Yes, but most of the property tax bill is for schools. 101-year-old women usually don’t have kids in schools. Some states have lower property tax rates for retirees. It would be nice if they had lower rates for people without kids too.