I am looking at listings that are being scheduled to sell at the upcoming los angeles tax auction and was just curious if you are able to purchase these properties straight from the homeowner before they are auctioned off. Im guessing there would have to be some negotiating with county tax offices or other interested parties to get approval but was just curious if this was even an option or if they were just simply off limits once they were already scheduled to go at auction. Thanks
one of the best plays it the game it just so happens I bought 4 today... one day before they were going to be lost... homeowner was relieved .. I do all mine with equity splits so we save them give them some money then sell and split equity so they acutally get something my competition just tries to low ball and take them straight away when my guys show up with my program and testimonials we get like I said 3 to 4 each sale and they are great win win s for all.
Originally posted by @Jay Hinrichs:
" I do all mine with equity splits so we save them give them some money then sell and split equity so they acutally get something"
Jay, interested in knowing more about your process...do you use two separate agreements or lay it all out in your purchase agreement? Any formula guidelines?
That an awesome idea Jay! How do you approach the homeowners that are in trouble?
John Thedford, John Thedford | 239‑200‑5600 | http://www.capehomebuyers.com | FL Agent # BK3098153
This is exactly what my husband and I have been trying to figure out how to do. I also am interested, Jay, in how you are approaching the homeowners who are in pre-foreclosure?
pre tax is nothing more than pre foreclosre only you don't have the pre foreclosure laws that have recently been passed to worry about. And there are far fewer of them At least on the West coast compared to NOD's.
How well this works or how easy it works is directly related to what kind of state your in. IE we are in a title company state were title companies have very good title plants that are all on their data bases.. If your in a state were its still old school IE you need title abstractors to figure out whats going on that is a definite disability. Since we have what one would call a premier relationship with our title company we can call and get a date down on the phone for free in 3 to 5 minutes.. So we can vette potentials very easy. Then we get a prelim in 24 hours which.. As Rick Harmon on this site talks about there is usually some type of complicated title issues that have to be dealt with.. And its a mad scramble at the end as these folks usually wait to literally the very last day before they are going to lose the property for good.. IE we bought 4 yesterday.. We start one month out with hundreds and whittle it down to 3 to 5 a year per county but they are some of the best deals... And like anything else there is competition from other investors. We have a pretty nice track record and verifiable references that help us.. Plus we have Lexus Nexus that allows us to hunt people down like a PI.. that again is critical to success in this endeavor. Letters and mailers are worthless by and large for these types of deals as people get bunch's of those from folks all over the country and since many who send out yellow letters or other types of mailers never respond the people just throw them away... Its all about chasing them down finding them and talking to them belly to belly..
Plus this works in TAX Deed states.. TAX certificate states it would not be as effective.
The OP is in a tax deed state (CA). The seller is free to sell the property before it goes to sale and the buyer is free to pay the taxes to remove it from the sale. No permission is required from the tax collector. The tax collector does not negotiate. Pay the amount due required to remove it from sale by 5:00 pm the business day before the sale or the property will be sold. CA has no redemption period. (Although there is a year in which to make a claim for a sale improperly held.)
Be advised the there are a ton o' investors who work the the tax sale list in LA County. Most properties you see on the list will be redeemed (removed from sale) by the owners, especially residential property. Many properties will have deceased owners or missing owners and no one to buy from. There are plays there, by working with the heirs, but they require cash up front (to save it from sale and to do the necessary legal work) and they have risk. That being said some of my best deals have been such properties.
I suggest selecting some properties and and attempt contacting the owners. This will give you a feel for how owners react when contacted (denial, failure to act promptly, misinformed, etc.). Then keep your eye on those properties to see if they go to sale. You'll learn a lot.
You can do it in Texas, but you would have to pay all taxes to keep it off the steps. Generally, this really only works when there are not any liens on a property other than the taxes.
Kristine Marie Poe
these are the scenarios we buy... literally clear the tax's last minute.. then probate if necessary or whatever hair is on the deal..
To the OP's question: Yes.
Defaulted taxes are just another way to find property or profit opportunities, whether owner is living or deceased.
In CA, a living owner of record who is competent, has the legal right to sell or transfer their interest in real estate.
If deceased, heirs have the ability to legally assign their beneficial interest in the decedent's estate. Just remember that you are only purchasing whatever equity exists, if any, as there may be other heirs or unsecured creditor claims such as Medi-Cal that come off the top of the expenses of probate administration in addition to attorney, court and administrator fees.
@Jay Hinrichs I noticed you mentioned you use Lexis Nexis to track down people. I briefly remember using it in school as a research tool but never saw anything in regards to locating individuals. Can you speak a little more on that process? Thanks!
its an accurant product google it
Kristine Marie Poe
Thank you for your advice. It definitely helps me out. Sounds like a good way to get in with motivated owners especially if you are able to show them that they can actually benefit from the situation by working with you as opposed to just letting the property go to auction at a complete loss. Like other methods of finding deals I realize theres a lot of caution to be taken to prevent getting myself into a bad spot though
Jay, it's the other way around:
Accurint (my spelling is correct) is a product of Lexis Nexus.
Very interesting info in here! I'm in NM which is a deed state and it looks like the state schedules deed sales about once a year for each county, which I am guessing is how it is done in other states as well?
@Jay Hinrichs when you mentioned you call your title company and get a "date", are you talking about a date the property is going up for a tax deed sale? Are you paying for all of these title searches? Looks like that could get expensive if vetting 100's of properties!
date down: verbal title search. Our title plants are all electonic.
Super info! If I can ask you Jay, what equity split did you use? A 50-50, or a built in pure profit strategy? Do you just use a purchase agreement contract?
i have an opportunity to do a deal like this in colorado right now. could be my first deal. how do i write up the equity split?
@Dylan Douglas Colorado is a tax certificate state. The discussion above is about tax deeds. They are different and the process is different. You can work them, the process is just different.
Thanks Bill. I will do some more research and study on Colorado Tax Law..... Again...
This is a great way to buy properties. Even if it does not work out with the owner you may be able to look inside the house before the auction.
In Texas, we also have a special kind of loan, where people get money to pay the taxes. That is more complex but a great way to find good deals.
@Dylan Douglas the basic are. Tax liens are sold each year. If you get the 1st year then you get first dibs on the subsequent years. After the 3rd year you can apply for a treasurer's deed. Once you meet the criteria of that phase it's possible to own the property. I know that the owner can redeem the liens up through the third year. Not sure of the ins and outs of what happens after the lien holder applies for the treasurer's deed. Not sure what the drop dead time frame is for the owner. The way it's structured, very few properties are sold via the tax process. Other states are much more friendly to the investor and more are sold for taxes.
in Texas, you can purchase tax lien property and receive a constable's deed. The owner has 2 years to redeem the property at 15% the first year and 25% the second. If they don't and you meet all criteria mainly keeping the taxes paid you can then apply for permanent deed and receive it
Actually, in Texas it is 25% for the first 12 months and 50% for the second 12 months. The redemption period is 180 days unless it is a homestead, has an agricultural exemption or is a severed mineral lease-then it is 2 years.
The sheriff deed or constable deed is permanent and you have all the rights to the property when you purchase it at the tax auction, except the right of redemption. That includes the right of possession. It probably will be at least 2 years before you can get a title policy from a title company, however.
Arnie Abramson, Texas Tax Sales Resource Group LLC | 9037762929 | http://www.txtaxsales.com
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