Tax delinquent properties

2 Replies

I've been looking at tax delinquent properties in Texas and have run across some that are 8, 9, 10+ years delinquent on property taxes and wonder how these haven't been sold at auction yet. I understand that at times, if the person has the property as homestead exempt and are elderly, the county won't usually foreclose on the property because they are elderly. Is this true? Is there a way one can purchase a tax deed certificate or something along those lines even though the county isn't moving forward in the foreclosure? Of course speaking to them directly and finding a solution to their problem is the optimal way to go, but if they know they can live in the house until they die without repercussion, then what incentive do they have to sell if the mortgage is paid for besides leaving it to their heirs if they have any? Just curious as I look to start marketing to these homes.

#1 Some counties are painfully slow at foreclosing in some cases.  Seems like especially the big ones...Dallas, Harris, Bexar, Travis.

#2 You are right, I believe after age 65 they won't foreclose on homestead properties.  Just saw one in a sale last month that had not paid for 20 years.  Now the taxes owed are probably close to 2x what the house was worth.  So pretty much impossible to buy at the auction.  

Texas Property Tax Code, Section 33.06, allows a person who has a 65 years of age or older residence homestead exemption or who has a disability residence homestead exemption from the Appraisal District (CAD) to defer the collection of the property taxes owed on their residence homestead.

http://www.dallasobserver.com/news/dallas-real-estate-baron-gene-phillips-hasnt-paid-taxes-on-his-25-million-estate-since-2005-7144354

#3  Probably makes more sense to target the people who are 2-3 years behind on taxes vs 8-9 years.

#4 No certificates in Texas that I know about....they either go to sale or they don't.  There are companies like Genesis that do tax loans and become 1st position super lien holders.  Not sure where you would go to find information on becoming that lender, but perhaps you could go to work for one.

https://www.hometaxsolutions.com

#5  You are right...no or low motivation to sell.  I think some use it as a strategy.  There have been complaints I know in Dallas county of millionaires not paying the taxes.  They'll get paid one day maybe.

Thanks for the info. That provides a lot of insight as I move forward. A follow up question I have is I'm seeing various people on my last has delinquent taxes on properties from 5+ years ago but nothing owed or paid since let's say 2012. I search the address and it looks like it has changed ownership at that point. If the property has been sold, how have the taxes not been paid and what happens at that point once the taxes aren't paid and the previous owner no longer has the property?

Join the Largest Real Estate Investing Community

Basic membership is free, forever.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.