how to own one of Baltimore's dilipidated houses? (tax lien, for sale)

[moov]

Once I saw and almost bought a beat up house in the ghetto for about 4K. The roof was fine, the rest needed to be fixed. I've seen comments here that property taxes in Baltimore is about 4-6K a year? I don't know much about how the real estate deal goes, but to pay that much in taxes yearly is ridiculous. Is the tax based on the property price? Could someone explain/summarize how this usually goes? I'm thinking of buying and fixing one of these beat up houses and live in it.

[davecj]

Taxes are normally a few hundred dollars if any in the homes that you are looking at. One of the ways I find owners when we buy is to you the tax records here: Real Property Search

[rudy_d]

Originally Posted by moov

Once I saw and almost bought a beat up house in the ghetto for about 4K. The roof was fine, the rest needed to be fixed. I've seen comments here that property taxes in Baltimore is about 4-6K a year? I don't know much about how the real estate deal goes, but to pay that much in taxes yearly is ridiculous. Is the tax based on the property price? Could someone explain/summarize how this usually goes? I'm thinking of buying and fixing one of these beat up houses and live in it.

Baltimore's property tax rate is $2.268 per $100 of assessed value. For property taxes to be $4000-6000, a property would have to be assessed at between approx. $176k and $264k. To calculate the annual property tax, just multiply the assessed value from the Real Property database by .02268. If the house you saw selling for $4000 is assessed near the sales price, the property taxes would be less than $100 per year.

There was recently a proposal to raise the property tax rate on vacant/derelict homes to $10 per $100 to create an incentive for owners to sell or rehab them, but it didn't go anywhere after the mayor changed her mind about supporting it.

[moov]

how would raising it to $10 per $100 be an incentive? I thought that would be a rip-off.

Who determines the assessed value? Im not good with real estate stuff, just learning.

How would I know if the seller is legitimate and not some crackhead trying to run off with my money by offering me bogus paperworks? Like I said I'm new in real estate stuff.

Originally Posted by rudy_d

Baltimore's property tax rate is $2.268 per $100 of assessed value. For property taxes to be $4000-6000, a property would have to be assessed at between approx. $176k and $264k. To calculate the annual property tax, just multiply the assessed value from the Real Property database by .02268. If the house you saw selling for $4000 is assessed near the sales price, the property taxes would be less than $100 per year.

There was recently a proposal to raise the property tax rate on vacant/derelict homes to $10 per $100 to create an incentive for owners to sell or rehab them, but it didn't go anywhere after the mayor changed her mind about supporting it.

[Max The Dog]

Originally Posted by moov

how would raising it to $10 per $100 be an incentive? I thought that would be a rip-off.

Who determines the assessed value? Im not good with real estate stuff, just learning.

How would I know if the seller is legitimate and not some crackhead trying to run off with my money by offering me bogus paperworks? Like I said I'm new in real estate stuff.

The property tax assessor determines the assessed value. It is very important that you file a homesteader exemption with the city. It caps your assessment to only rising 4% a year. (Others correct me I'm wrong, I know you people on this board don't have a problem pointing out my errors )

Even in Baltimore the assessed value is likely to be low on the type of home you are describing.

Here is a link to determine the present assessed value.

Real Property Search

If you are feeling brave and can get financing there is a mansion for sale at 1115 LANVALE ST W, Baltimore, MD 21217.

Personally, I believe www.zipreality.com is easy to use if you want to browse property in Baltimore city.

Good luck.

[atariwhizkid]

Baltimore city also has a home rehabilitation program it calls SCOPE. Apparently, you can get a city-owned, vacant home for somewhere between 5 and 10k if you promise to put in so many dollars worth of improvement into it. I am not certain what the terms of the agreement are other than that. One such property is in my neighborhood, and I think it's listing at 5K. God knows how much work it actually needs, though.

[NeoSoulBrotha]

SCOPE properties are usually the worst of the worst, although HUD is willing to unload them dirt cheap. The program is well intentioned, but the homes are mostly shells & demolished properties in neighborhoods that won't see any value appreciation. For a SCOPE home, expect at least $75,000.00 - $125,000+ in rehab costs.

Considering that the after repair value is probably less than the cost to rehab and get the home code-compliant, it can be a losing proposition. There are lots of homes in transitional/stable neighborhoods that need work and are undervalued, most realtors can point you towards these deals.

Another option is purchasing a tax lien from the City. If a homeowner doesn't pay their property taxes, the city will foreclose and auction the property.

[davecj]

Scope information can be found here Greater Baltimore Board of Realtors - GBBR Scope

As far as buying the property, you would do a title search to make sure it's clear of all liens and to ensure the property is actually owned by the seller. That's not really something that happens much if ever. The only thing I've heard of is people who pretend to be owners of foreclosed homes and rent them out to steal the security deposits.

More than likely you'll want to get the property reassessed if you do buy. We bought a place in the heart of Canton for $87k that was assessed at 150k. We showed the assessment office that the property was now worth 87k and it cut our taxes in half.

[moov]

I've read the SCOPE stuff before. Doesn't sound like you'd actually own the property, more like a contractor to fix it, if not it only becomes a burden. Sounds complicated...

Originally Posted by atariwhizkid

Baltimore city also has a home rehabilitation program it calls SCOPE. Apparently, you can get a city-owned, vacant home for somewhere between 5 and 10k if you promise to put in so many dollars worth of improvement into it. I am not certain what the terms of the agreement are other than that. One such property is in my neighborhood, and I think it's listing at 5K. God knows how much work it actually needs, though.

[moov]

what became of the owners of these homes? sounds like all the homes in baltimore city were housing projects when the city/government owns it?

Originally Posted by NeoSoulBrotha

SCOPE properties are usually the worst of the worst, although HUD is willing to unload them dirt cheap. The program is well intentioned, but the homes are mostly shells & demolished properties in neighborhoods that won't see any value appreciation. For a SCOPE home, expect at least $75,000.00 - $125,000+ in rehab costs.

Considering that the after repair value is probably less than the cost to rehab and get the home code-compliant, it can be a losing proposition. There are lots of homes in transitional/stable neighborhoods that need work and are undervalued, most realtors can point you towards these deals.

Another option is purchasing a tax lien from the City. If a homeowner doesn't pay their property taxes, the city will foreclose and auction the property.