BiggerPockets

I'm interested in knowing more about tax sales.Has anyone purchased at a tax sale? In what state? Was it a great price? Was it difficult?Can anyone give me some insight on tax sales and where I can learn more about tax sales.

:lol:
Tax sales are one of my " specialties" . The last one I got was in Nevada for the City of Henderson -- country club area -- Seven Hills, Anthem for about $7800. The property was worth $400,000.
Interest is 12%.
I am researching some others.
I also have an attorney that worked for taxing entities to assist me if I ever end up with a problem, ie. tenants to evict.

I have a synopsis I typed up with a bit more explanation if you would like me to email it to you - no spam.

I have picked up some land at a CA tax sale in the past. Just make sure you do your homework and know the laws in your state. Keep in mind that not everything is listed in the public records, and if you have a good relationship with a title company and have a particular property in mind, run a title search, go to the plant yourself and review the recorded maps for yourself, know the subdivision or area you are buying in well. I purchased in a rural area so it was much different then purchasing in the city. Absolutely preview the properties you are interested in, and bring a contractor with you.

in my experience ya hav to hire an attorny to clear the title

i have purchased five tax property and every one of them i had to quiet the title to get a title poicy on them ,there all sorts of stuff that can effect the title ,mortgage company,s,l/c holders even the person that lost the property still has to be takin off the title,if the state takes the property for back taxes doesnt automaticly clear the title.

I find that there is very little published about how to navigate through a tax sale. I also am very interested, but am concerned that I will " lose my shirt" because of a mistake I made.
A few questions for someone who has been through this process:
If I am high bidder, do I have to then pay off the previous mortgage and other lein holders?
Who do I big against?-the bank, professional flippers, etc?
Can I walk through the property prior to the sale?
Can I really get property for incredibly low prices?
Do I have to have the full purchase price cash on hand?

Thank you for taking the time to answer these questions. Also, can someone recommend a good book on the subject?

I wanted to know what you thought about buying tax delinquent property and either just selling it to a company that fixes houses up or fixing it up your self and selling it. How did you go about doing some of your transactions? Do you happen to know of the pros and cons of something like that? Can it be done that way? Would it be a good idea, or not?

Texas is one of the best places for Tax Auctions, I say that in theory :-) cause Ive seen alot of properties get bid up lately.
Texas is a Tax Deed state and heres how it works. You go to an auction bid on the Tax deed it usually starts off at about what they owe. As the winner of the bid you are entitled to 25% interest on that deed plus any fees and payments you made. The owner is allowed 6months to get their property back (1 year if homestead @ 50% interest)....they pay the price you paid at auction + 25% + any fees and payments you made and they get the house back.....it doesnt happen often.

The Auctions really arent that great because every investor knows about them and if the property is good your going to see it get bid up to almost its appraised value. Never pay more then the property is worth and always inspect if you can.

I make property tax loans and i buy houses from motivated owners whom owe delinquent taxes but I do so outside of the auction.

I have a degree in engineering and I developed a program that searches for every property owner who owes back taxes and it spits out the results in a nice excel spreadsheet. There are just way to many properties for myself and my partners so Ive launched a new website that offers all the contact info of delinquent property tax owners. Use it in your mail campaign or heck cold call or knock on their door.

contact me if you have questions or comments I love talking about taxes

Martin

I do tax sales regularly so I will answer some of the questions that have come up.

> I also am very interested, but am concerned that I will " lose my shirt" because of a mistake I made.

Tax sales are generally safe. In most jurisdictions you are in first position so you get paid before everyone else. Your biggest risk in tax sales is that the property is not worth what you bid. I just posted on my blog about someone who bid $77,000 for an MT lot. He didn't bother to inspect the property to see that the builiding had been demolished. (my blog link is below)

>If I am high bidder, do I have to then pay off the previous mortgage and other lein holders?

Generally if you buy a lien and foreclose you wipe out other liens. This may vary by jurisdiction and may be different in Tax Deed States.

>Who do I big against?-the bank, professional flippers, etc?

Often you are going against big bidders. I spent a little over $100K at the Baltimore sale that just ended. I am one of the middle guys. Lots of onesie, twosie bidders, Perhaps a dozen like me in the middle and about a dozen that spent millilons. The top bidder spent $17 milliion dollars last week.

>Can I walk through the property prior to the sale?

No, they still belong to the owner.

>Can I really get property for incredibly low prices?

Yes BUT . . . it is not as easy as the late night tv gurus say. Most people will redeem, if they don't often a bank will to protect their interest. I have had properties that I was sure I would get and at the last minute it would redeem. I have had a couple of real heartbreakers.

But I have also gotten some good deals. Two properties that I bought for about $10k each including attorney fees and sold one for $40K and one for $45. I currently have one I am into for about $15K and I will sell for about $25-30K. If you think you are going to get the $400k house for $2,000 forget it. You have better odds with lottery tickets.

>Do I have to have the full purchase price cash on hand?

Yes and no. Again it will varyby jurisdiction, but last week in Baltimore they imediately debited my checking account. But they don't debit the full bid amount, that is the amount you pay if you foreclose. The day of the auction I had to pay the lien amount and a " high bid premium" This is an extra amount based on your bid that does not earn interest.

>I wanted to know what you thought about buying tax delinquent property and either just selling it to a company that fixes houses up

That's what I do. The properties I mentioned above were vacant and I sold them as is to rehabbers.

>Can anyone give me some insight on tax sales and where I can learn more about tax sales

Often the info is online. Search for you counties website and look for tax sale info there. Look in the legal newpaper for your area and look for the legal notices. The attorneys that do foreslosures will generally know about teh tax sales. In my area they usually have online instructions about the sale and how to register. My Blog below talks about my experiences last week at the Baltimore sale.