Land Academy Described (JJ 671)

Transcript: 

Jack Butala:                         Jack and Jill here.

Jill DeWit:                            Hi.

Jack Butala:                         Welcome to the Jack Jill show, entertaining real estate investment talk. I'm Jack Butala.

Jill DeWit:                            And I'm Jill DeWit, broadcasting from sunny southern California.

Jack Butala:                         Today, Jill and I talk about Land Academy Described.

Jill DeWit:                            Are you making fun of my enunciating?

Jack Butala:                         No.

Jill DeWit:                            Oh. I thought you were. I started to slow down and enunciate my name, and you're like, "Today we talk about" ...

Jack Butala:                         This is show 670. I'm on autopilot. Are you?

Jill DeWit:                            Oh, I guess you are. Isn't that funny?

Jack Butala:                         Before we talk about deep thoughts-

Jill DeWit:                            Oh no.

Jack Butala:                         Let's take a question posted by one of our members-

Jill DeWit:                            Oh no.

Jack Butala:                         From the jackjill.com online community. It's free.

Jill DeWit:                            Okay. Thank you Jack Handy.

Jack Butala:                         It's not good when she says "oh no" this early.

Jill DeWit:                            Oh, goodness. Okay. So, we have a question and we have one our people started to answer it. So, this is cool.

Milan asks, "Is this a common practice? I'm buying 80 acres from a seller who bought the land on a tax sale. Title company doesn't want to issue title insurance because of that. Obviously the owner owns the land free and clear and bought it 20 years ago. Would you guys still buy this property if it's not insurable? That also makes you wonder if that issues goes away if I buy it from him, which means the last transaction is not a tax sale transaction. Thanks for your opinion, land rock stars."

Jack Butala:                         So, we have another member who piped in and actually answered the question, but before Jill reads that, let me explain it in real simple terms. There's tax sales all over the country constantly, just like you see on late night TV. They're not as easy or simple or most of the time prosperous as you see on these infomercials in the middle of the night, but it's very possible to purchase 80 acres just like this person's saying on a tax sale, especially out west, for two or three or four or $5,000. People have been doing it for a really long time.

So in this case, this guy is purchasing a property from somebody who bought it at a tax sale a lot of years ago. They issue was called a treasurer's deed, or depending on the municipality, it's usually a treasurer's deed or some version, or tax deed, let's just call it a tax deed.

Title insurance companies do not want to insure against this. I'm not sure why.

Jill DeWit:                            It's the funniest thing.

Jack Butala:                         But it is what it is, so he's asking, what do I do? The plain and simple answer is you quiet title the property, or back east, it's called adverse possession of the property. You have to go through a bunch of legal proceedings, literally put it in the newspaper, put notice in, and at some point, they're gonna, somebody, which makes no sense, the taxing authority who issued the deed in the first place, which issue a "marketable title." That's the meat of this whole thing.

So, he's asking, what do I do? How do I get title insurance?

Jill DeWit:                            Okay.

Jack Butala:                         Just took a little nap.

Jill DeWit:                            No, it's all good. All right, you-

Jack Butala:                         It's important to know all this stuff.