I'm still deciding what method to start out with in real estate investing. One way that really interests me is land flipping using a delinquent tax list. Basically it's a list of people who owe back taxes to the county but are not in foreclosure yet, who may be motivated to sell their vacant land for very low prices. Episode 39 on the podcast :)
I've found that I can get this list from my county treasurer for $75 in an excel format. On the list: tax key, owner, owner address, property address, tax year, & taxes/penalties/etc due.
However, it does NOT break the listing down into categories like single family homes, commercial, land, etc.
The report would be for the county I live in, which is currently home to ~400,000 people and is the 3rd most populous county in Wisconsin.
For those who invest using this route (or have tried it), how do you deal with a list like this that won't break it down into type of property? I have no idea if it will have 100 or 10,000 listings to know how manageable it may or may not be. (I have more money than time these days, as we already own another unrelated business). Pay a virtual assistant to weed out everything except vacant land property and then I'd work off that list?
Just figured I'd ask around to see if I could get some feedback before spending the cash on something without having a plan. If you use or use this method, I would appreciate any advice. Thanks!
@Samantha Ruiz you could probably do it in about a day with a simple python script, also with this method you don't have to hire someone again when the new list comes out.
@Aaron K. *googles "what is a python script"*
I assume you don't mean me writing my own program, but paying someone to write the program for me? I'm just wondering how a program would work if the list itself doesn't specify what type of property it is. Can you explain it more?
And that is definitely something to be considered, since I'd assume you'd be looking at updated lists on a regular basis.
@Samantha Ruiz even with my janky programming I could probably cook something up in a week or so. Where you get the property type is going to depend. My county for example has a very user unfriendly interface so I'd probably use Redfin/ Zillow or RPR. However for more user friendly counties you could do it from the county website.
@Aaron K. Got it, I think! So it essentially would takes the property addresses, compares them to some database that will state the property type, and then organize them according to type?
@Samantha Ruiz yes
@Samantha Ruiz - If you have more money than time, just buy a list from a list broker. Or better yet, get a good relationship going with a title agency in your area. Many will get you a list for free. Just let them know your intent and what you are looking for, they can probably get you a list.
He are the steps you will need to follow:
- Get list of properties (see above)
- Do property research, many properties will be worth less than they owe in back taxes and penalties
- Mail letters or postcards, and/or make phone calls
- Once you get an interested party, do more due diligence (call county to verify due amount plus fees, verify other liens on the property such as HOA, etc...)
- Make offer
- Purchase property
- Sell property (or keep)
All of these steps above will take time and here are a few other things to keep in mind: most sellers will wait until the absolute last second, many will want to talk to you during the day (which will probably be inconvenient for you), most sellers that are delinquent on property taxes will also be behind on other taxes and fees (HOA, POA, utilities, etc...).
Feel free to reach out if you have questions.
@Andy Bauman , your post is really helpful, despite it being a bit disheartening, haha. I thought this might be a viable strategy if I could outsource some of the legwork like refining the list down to properties that are worth more than they owe & then working with it from there. At this point, even if I outsourced that work I don't think it would fit well in my current hectic life of working in/on our primary business. It would be one thing if this was a one time thing, or repeated only every 1-2 years to track down the next possible rental property purchase, but I think you'd really need to be repeating this process once a quarter at least because the profit comes from the purchase & sale of the land. I suppose you could always purchase & seller finance the property for more long term cash flow, but it still doesn't seem like it would be as much cash flow as a turnkey single family home or duplex, etc. Thinking this is another possibility to eliminate, at least for now, simply for the time factor.
@Samantha Ruiz - Anything in real estate will take time and/or money. Your most passive options in real estate will be note investing, hard money lending, commercial NNN real estate, and turn-key rentals. Most of these require some large capital requirements and intermittent time commitments for research and management of others.
On the seller financing of land, that is my current strategic focus. I specialize in land flipping and my main goal is to build passive income via seller financing to replace my income. I have assigned some properties, sold some for cash, but I have yet to actually seller finance any. I have quoted several, I figure that an average seller financing deal will be in the neighborhood of about $200 a month. So if your goal is $20k a month, you'll need 100 deals. I do know others that have seller financed land and they cashflow larger amounts like $400 or $500 a month on some properties, without the hassles of tenants.
I feel your pain - I also have a fulltime job where I work around 50 hours a week, have two boys under 10 that are in all sorts of sports and cub scouts, it is definitely hard to balance it all. But if I do nothing different, I'll hopefully retire at 70 if everything goes right.