Subject to past due taxes

15 Replies

A property is on pre-foreclosure and scheduled for a tax sale auction. This is an absentee owner and the home sits on 2.5 acres. Is it possible to purchase this property as a "subject to" the past due taxes before the auction takes place? Also, I'm wondering if I could use my IRA to purchase it and set it up as a self-paying transaction/IRA account? Any advise is appreciated.

What state is it in?

in FL and Louisiana you pretty much have to wait until the auction starts before you can bid.

Make sure you complete your due diligence (liens,title chain review, easements,etc...) and visit/inspect the property in person tax-deeds require alot of foresight.

Most tax sale auctions and tax liens take a higher priority in most states than the foreclosure itself but you should examine state and local laws first before proceeding.

If the property was in Louisiana then:

1) After visiting the property, taking multiple photos looking for activity on the land, asking neighbors where owner is and inspecting outside of building (from street) for condemnation damage, I decide to buy after my survey.

2) In Louisiana, I would buy the property at tax sale auction, bid as low as 20% and get my foot in the door with a tax title.

3) I would send a copy of my new tax title along with a Post Tax Sale notice to all lien holders on record in the Clerk of Courts for the Louisiana property as per RS 47:2156 with certified letter.

@Lydia T. Good idea, but I got a little confused on which amount would need to be paid out. The Auction starts at $25K, which I would love to offer, but the county records have them past due at $133K which I surely can't pay all at once. I did send them some mailers, but was unable to get a good phone number for the owners. Tax sale is tomorrow 7/2, so I will see if someone bids on it. If not, I'll I was thinking about getting my Acq. Mgr to door knock to get the owner on board, then see if we can negotiate a reasonable payout with the county. 

Honestly, Tax Sales are not the quickest payout so I try to look for other investments, but this property does have some get $$ potential. 

@Byron Butler I am soon to be investing in the Austin area! I will definitely contact you when I get down there. As for your tax property, if the debt is 133k then trying to buy at auction for a fraction of that is your best bet. But from what I know about the Austin market its even hotter than Dallas and property will probably sell for close to the delinq tax amount at auction

@Lydia T. Just for kicks, are you familiar with Commercial RE contract assignments? I have a local Austin attorney who will do title and escrow for me on a property in Dallas (just getting under contract today). They say I can use a TREC, but the only one I am familiar with is the 1-4 Residential Family Contract. Is that the one I should use or am I missing something. I really appreciate your response, its very helpful for a newbie like me.

And yes, I don't even waste my time at the Tax Auctions in Travis County, I go to the surrounding counties (Hays, Comal, and Williamson). Austin is high dollar right now. 

@Wayne Brooks I'm very sure about the taxes, it's posted on the Dallas County Property tax search when you look up the owner. If it were foreclosure in Texas, we have Trustee sales and for mortgage foreclosure. Trust me, I was baffled myself ... then after doing some research, a Law firm has it posted for tax auction by sheriff starting at $25K. My thoughts were if I were to even try to subject to the property before tax auction, I could possibly get the county to negotiate the taxes with me, but that does not seem to be the case. 

@Wayne Brooks True, if you didn't know .... Texas is like another country when it comes to certain things :) . But on a serious note, the property is worth over $133K in my opinion because of the acreage it sits on. There are a few different Law firms that manage the tax list in conjunction with the local county sheriff.