Due Diligence for potential Tax Auction purchase

[Stephanie Ramirez]

I'm a complete beginner at real estate investing. I've been interested in many avenues of real estate investing for some time and I finally am coming to a point where I have the courage and resources to take the leap. Currently I am curious about acquiring real estate through county tax auctions.  I've read that most of the liens on the property fall away when the house is up for tax auction, but what type of debt remains tied to the property?  What type of due diligence is necessary when looking into this type of purchase?  What are the stumbling blocks that come up when acquiring property in this manner?  All information is definitely appreciated. I'm looking forward to learning from the responses. 

[Henry Clark]

OP google and read the Cal regs.

General due diligence:

1.  Check the date of the taxes noted.  If it says 2024.   The taxes for 25 and 26 are still owed. 
2.  Other taxing authority debts are stilled owed and not wiped out.  Separate school, drainage or water districts

3.  Let’s say you pay $50,000.   But by the time you or the previous owner try to take possession the property is condemned.  You lose your $50k plus you you close you pay the cost for demo and end up with a lot.  Which might be ok in Cal.

4.  This is Tx.  Any house an owner can come back for 2 years and pay off.  Do you want to renovate the property and increase the value.  Only to have someone pay off the taxes and penalties?  Land only takes 6 months.  But that is Tx.  

5.  See if Cal has Off List properties.  That you can buy outright and take possession and ownership, not thru the auction process.  You still have to do due diligence.  

6.  Since you’re in Cal.  You still have to get any residents out of the unit.  Do you know how to play hardball without going to jail yourself?