Alex's Question

[Don]

Area: SW Florida

(1) the owner filing bankruptcy and (2) commercial properties that
require toxic cleanup. Are these the main risks that I should be
concerned about? I know you mentioned that bankruptcy does not usually
wipe out a tax lien, but is this something you have had problems with
in past investments? If bankruptcy does wipe out the lien, does the
investor at least get their principal back? And in regards to toxic
cleanup, you recommended investing in residential properties (instead
of commercial) to lessen this risk. Do you invest in residential
properties with the assumption that the land is clean of toxic waste?
How can one be certain? Also, do you recommend against investing in
commercial properties?

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The area you are investing in isn't known for toxic dumps or
radioactive cleanups but it does have a high rate of bankruptcies as
of late due to the real estate bust.

Bankruptcy cases are federal cases that work hand in hand with state
laws and Florida's notorious for defending the homeowner's rights (not
necessarily a bad thing). Anything can happen with a judge and at
times these cases and how much the creditors take a hit are based on
entirely subjective matters. But I have not personally seen govt tax
liens being cancelled out right but rather the interest payments have
been cut down or delayed.

Thanks, -Don