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    HNN is your go-to for all things Hornet such as ongoing and new projects, market updates, upcoming events, and much more! Make sure to subscribe, like, and share our page with others. Hornet Capital is committed to improving the journey of ALL real estate entrepreneurs; rehabbers & developers, new & experienced, cash investors & private money lenders alike. We currently offer hard money loans and partnerships on Austin rehabs & developments, foreclosure consulting, construction & contractor referrals, discounted Realtor services, and personalized real estate education.

    We provide awesome returns for cash investors & private money lenders who are looking for mailbox money. Yes, we are different! Ask us why.

  • Selling A Home If You Owe Back Taxes

    At some point in your life, a radical change in the form of a messy divorce, a job transfer or an illness may force you to relocate and profit from a fresh, positive start in a different location. Building a new life from scratch may be the best thing for you and your family in Austin, TX. But what were to happen with your property? Could you actually sell a home if you owe back taxes? Let’s find out.

    The Problem: You Want To Sell Your House But Back Taxes Tie You To The Property

    Generally speaking, this is not a very big issue. However, note that all the people who are currently in this situation have to repay the amount of money that they owe in back taxes during the process of selling their property. This means that after giving back what you owe, you would walk away with a reduced amount of money in your pockets. The situation gets even more complicated if your back taxes are for a federal IRS lien. In this particular content, it will take minimum 30 days to be able to sell your property in Austin, Texas, after the IRS lien is paid.

    This basically means that you would have to pay the IRS lien and wait at least 30 days to enable the IRS to record this action and allow you to sell your home with a clean title.

    If you owe back taxes, you may want to consult a real estate attorney to get more familiar with the legal framework, practice and available options. You may also want to get in touch with the local tax authority and let its representatives know that you’re planning to sell your property. Provide a payoff figure for the overall amount that you owe. Embrace the same approach when it comes to contacting your mortgage lenders. Make sure that the overall value of the net profit obtained after completing the transaction (recorded after paying sales tax stamps and commissions) would be sufficient to pay all the involved parties. In most cases, when you owe back taxes you learn how to pinch pennies. When you are desperately seeking to reduce expenses and sell your house quickly and conveniently, can you actually afford to list your home through a brokerage firm and let your property gather dust on an unfriendly real estate market for many months in a row? If your answer is no, we may just have the perfect solution for you.

    The Solution: Sell Your House To Us

    At Tally Two Investment Group, we are not intimidated by these kinds of complications. If you have an IRS lien and have to sell your house fast in Austin, Texas, we can help you make this happen. We are cash house buyers who will gladly take your home off your hands in record time, even if you still owe back taxes. We have bought many other houses like this and we are eager to hear from you. In case you are dealing with an IRS lien and have to sell in less than a month, pack your bags and hit the road, we can offer you a fair deal and the amount of cash that you need to rebuild your life, brick by brick. Contact us today at 512-763-0883 and sell your house to us now.

  • The Complicated Eviction Process Revealed

    Many Austin landlords who have legitimate reasons to evict their tenants are fully aware of the fact that the entire eviction process is time-consuming, costly and can easily get very messy. Meticulous tenant screening does not always prevent unpleasant surprises. This is precisely why landlords should count on solid info enabling them to take the best course of action even when they fail to notice the red flags and get stuck with pesky tenants who won’t agree to relocate.

    Avoiding Court

    Excellent business practices may help landlords avoid court disputes. However, even if you count on a clear, concise, unambiguous lease contract, you may be forced to deal with difficult tenants that you would eventually have to drag to court.

    Taking The Right Steps

    In order to complete the eviction process in a completely risk-free, civil manner, you have to follow a few basic steps:

    1) Deliver the Notice of Eviction – This is also sometimes referred to as the Notice to Vacate, but whatever you call it, make sure that within the document that you state the main reason why you want to evict your tenants. The reason must be unconditional. A conditional reason (the “pay your rent or go away” type) could cause trouble for the landlord in court. It is required by law that you give written notice to vacate the premises.  You can either post the eviction notice, or deliver it by mail or in person (A good recommendation is to bring along a witness). If you’re wondering how much time can your tenants count on to vacate, re-read the contract. If the vacating period is not listed in the contract, keep in mind that tenants need to give the tenants at least 3 days to pack their bags and go before you file your suit in Justice Court.

    2) File a Suit – If the tenant refuses to leave, it is time to file an eviction suit. You will have to pay a fee between $50-$100.  This fee will pay for the court filing fee, your court hearing, and also for the Constable to serve the citation.  The citation is another notice to the tenant that you are attempting to evict him.  Make sure all the tenants are being served with lawsuit papers, to avoid further complications.  You should also receive your court date at this time

    3) Go to Court – Finally the time has come to plead your case to the Court.  Make sure that you bring all your documents and any other evidence with you.  It helps to dress professionally and be well organized.  At the hearing you will be required to present your evidence proving that your are entitled to possession of the home.

    4) Wait – If the judge decides in the landlord’s favor, the tenants have 5 days to appeal or pack their bags. Otherwise, if the tenant wins the court battle, the landlord can appeal within 5 days from the court ruling.

    5) Evict – If the tenant has not left the premises after 5 days, you can now file for a Writ of Possession.  This will cost you around another $150.  This is when the sheriff will actually go to the property and tell the tenants it’s time to leave.  By law they have 24 hours to leave after this notice.  After the 24 hours you must once again show up with the sheriff to remove their belongings from the property.  You must leave all their property by the street where they can retrieve it.  Once again they have 24 hours to recover their belongings.  Only after all this time can you dispose of any property that they have left abandoned.

    Eviction Summary

    From start to finish you can expect approximately 3-4 weeks if everything goes well and you get a quick court date.  You can also expect that it will cost you around $300.

    But wait… there is a faster way to evict a tenant.  If you file a Bond for Immediate Possession, then the process could be shortened to 10 days.  This bond is typically twice the monthly rent.  By filing this way and paying the bond it is possible that the eviction process is shortened provided that the defendant does not request a trial or post a counter bond.  If the tenant does, then you can expect the process to last about the same as a normal eviction.  Also, be aware that if you do post a bond for surety or cash, it is possibly that you can lose this money if you lose your suit.

    An Actual Nightmare Eviction

    Nonetheless, even if the whole process can be broken down into these easy steps, this doesn’t mean that it is always simple. Dealing with several categories of problematic people ( drug addicts, homeless and so on) may complicate your existence and make you waste a lot of time and money while trying to send your tenants on their way. At Tally Two Investment Group, we are very familiar with this type of unwanted complications. Here’s a real case that we’ve encountered and managed to solve, despite of its elevated level of difficulty.

    Early 2014 – An uninhabitable property was put under contract.  A homeless man moves in despite conditions (no water, no electricity, no septic).

    Day 1 – Tally Two Purchased and closed on property (despite homeless man in property)

    Day 2 – Homeless man is asked to vacate.  He says he can be out in two days.

    Day 6 – Man is still occupying the property.  We offer him gas money and moving van to leave.  He refuses, but says he will be out the next day.

    Day 9 – “Tenant” still refuses any kind of help and refuses to relocate

    Day 15 – Man is hand delivered a Notice to Vacate letter giving him 3 days to leave (still refuses help/money)

    Day 24 – Theft is discovered on-site.  Air Condenser, copper wire, and miscellaneous metal items are reported stolen from property. Total prejudice is estimated at about $8,000.

    Day 25 – A police report was filed for theft.  Tally Two also filed a suit at the local precinct against squatter for eviction (a process that involved a cost of $127.00)

    Day 40 – Court Date – Judge rules in Tally Two favor, squatter does not show up (squatter has 5 days to appeal before we can send sheriff)

    Day 40 – Squatter bluffs Tally Two and says that he appealed the decision, despite the fact that he did not actually take this course of action. During the same day, the squatter announces that he is going to stay as long as the courts will let him and makes us spend every cent he can force us to spend

    Day 41 – Squatter gets arrested for unrelated incident in Travis County

    Day 45 – Squatter is back at house (still refusing help/money to leave)

    Day 47 – Appeal period over.  File for Writ of Possession from sheriff ($161.00)

    Day 49 – Writ of Possession delivered to squatter (gives him 24-48 hours to vacate)

    Day 52 – Sheriff finally shows up at property with us to move all belongings out of house (he has 24 hours to claim belongings).  Contents found from a recently reported storage shed break-in found on the property.  He actually calls us this night saying that he will take help and gas money.  We tell him it is too late, he is now on his own.

    Day 54  – Squatter is finally legally evicted!

    Day 56 – Squatter is found lurking on property at night.  Sheriff is dispatched.  Squatter is now in jail for criminal trespassing and expecting 6 months conviction.

    Bottom Line: We Can Lift This Massive Weight Off Your Shoulders

    This example illustrated the fact that the eviction process can become quite a hassle and consume all your resources, even if the tenant has no legal rights to occupy your property. It took us approximately 2 months to make the “tenant” relocate and this is not an uncommon situation. Evictions can turn out to be messy and financial straining. If you are currently dealing with a similar problem, keep in mind that we are here to help you. In case you are determined to sell your house in Austin, Texas, we are ready to buy it and offer you a fair deal. Forget about difficult tenants and legal disputes and let us handle all these unpleasant issues and help you start over fast and stress-free. Call us today at 512-763-0883 because we are here to help.

  • What Is Gap Funding?

    Gap Funding can make all the difference with your successes in real estate.  When people say you can make money in real estate without using any of your own money, it’s almost true.  Yes, I’ve made money in real estate utilizing none of my own money, many times.*

    There are 3 views to analyze when considering gap funding: The Rehabber, The Gap Funder, and the Hard Money Lender

    Entering into a Gap Funding agreement can be very rewarding for all, and can be devastating to all.  My personal experiences are as a rehabber, yet I’ve seen what happens as from the viewpoint of the gap funder.  I will outline the benefits and the risks from both perspectives.  But first, a quick definition:

    The Gap Funder provides funds required for a renovation project that the Hard Money Lender doesn’t cover.  This allows for rehabbers to complete a project without using any of their own funds, yet enjoy profits from the project.  It allows for cash investors to make much higher returns on their funds.

    The Rehabber

    The concept of gap-funding was introduced to me in my early days as a real estate investor.  The intricacies of financing real estate projects for a profit can be somewhat unclear, especially for a new investor.  The concept “gap funding” is the critical component for the term “other people’s money” – or “OPM”.  This is the vehicle that allows YOU, the real estate investor/rehabber to do your job without making a personal financial sacrifice.  The concept works, with some exceptions.  I’ve done several projects without using any of my own money.  However, you must know this is the most expensive money available (OK, well the extension fees on hard money lender contracts are arguably as expensive, but that’s another story.)

    As a Rehabber I will either use a joint venture partner (where there is an agreed upon profit split) or a Hard Money Lender.  Sometimes I use a gap funder, but I personally try to avoid it at this point in my investing career.  However, with all of my cash currently deployed in other projects, I’m facing using gap funders for my futures deals.

    As a rehabber, the person that identifies the opportunity, understand the profit potential, manages the construction project, manages the paperwork and sales effort, I have 2 more responsibilities.  That is to my Hard Money Lender and to my Gap Funder.

    ***Failure to understand this critical concept will result in a very short career as a real estate investor.***

    Most gap funding contracts include a second lien position on the property.  You, the rehabber have no lien holder rights to the property.  You, or your entity, may be the owner of record, but the liens usually cover any profitable interest.  You are vulnerable and must prove worthy to your cash investors.

    Once the project is finished, the Hard Money Lender is paid in full, the Gap Funder is paid back their original investment plus a share of the profits, and you, the rehabber get the other share of the profits.

    I have never been in default with a gap funder, but you must be prepared to deal with that situation should it occur.  That means, you will have to pay them back even if it means selling some of your personal assets.

    The Gap Funder

    The riskiest investment with the greatest returns can easily get you very excited.  Viewing a pro-forma spreadsheet, trusting in another’s competencies, and the thought of the easy money can lull you into a sense of giddiness that you willingly pull out your checkbook with excitement.  This is when the Gap Funder has lost any level of intelligence that may have previously existed.  Smiles, money, new beginnings over rule common sense.

    I hear of more people that have significant losses in the role of a Gap Funder than any other role.  They aren’t thinking when they loan the money.  These are some of the biggest mistakes made by Gap Funders:

    • Fail to secure the loan (second deed of trust or second mortgage)
    • Place too much trust on an inexperienced investor
    • Fail to monitor the project
    • Not seeking help once they realize the deal has problems

    Of all of the investment loss stories I hear, it’s the Gap Funders that have lost the most.

    The Hard Money Lender

    Most hard money lenders are either people with a lot of cash wanting to act as a hard money lender, or have other peoples funds available to them for hard money loans.

    Hard money lenders insist on have the first level of security in the property – a first lien position.  Smart hard money lenders make YOU, the rehabber come to closing with cash. They want YOU to have “skin in the game” as you are more motivated to save your own money than you will to save the Hard Money Lender’s money.

    The Hard Money Lender is usually in a good position.  They make sure there is equity in the deal should they have to foreclose.  Most don’t really care if you have a gap funder involved, yet some do.  Since they have the first position any subsequent position is usually extinguished upon foreclosure.  They owe no duty to the gap funder or to the renovator.

    Most hard money lenders was their loan to be paid in a timely manner.  It is costly to foreclose on properties, and don’t really want to have to deal with the properties once foreclosed on.  However, I have heard there are many that have intentions of legally stealing properties for their own benefit.  Luckily I have not come across any.

    In Summary

    Should you want to invest as a gap funder, treat it as a business decision.  This world of real estate investing is based a lot on trust.  Writing checks to rehabbers like me is not the same as showing up at your local Fidelity office and having them invest your funds for you. The risks may be similar, but you must know how to protect yourself more than anything.

    On the other side, don’t get bogged down with analysis paralysis.  If there is a good opportunity with a person that has a track record of managing profitable projects, then you must be prepared to take action.  Gap Funders CAN make a lot of money with the right team.  You merely need to understand your role and how to protect yourself.

    *Where you can make money in real estate using all other people’s money, there are times you will need use of your own funds due to timing issues, for example you may have to put up an earnest money deposit while you search for cash investors.