The Possible Gold Mine Known As Tax Delinquent Properties
Hi everyone! Im 23 and just getting into real estate investing, and wanted to find the cheapest way to start accumulating wealth and I think I may have found it.
The state of Alabama purchases the delinquent taxes from the county once they dont get sold in a tax sale so that the municipality can pay their employees. These properties or parcels of land just kind of get tossed to the side to be forgotten. These properties are usually not in the best condition because generally someone hasnt been living in it for years, but you are able to apply to purchase these houses and land from the state for painfully low prices! Some people offer as low as $100 and the state will accept it, giving them either the tax certificate or the tax deed (depending on the timeframe). Then after 3 years of possession, the title will quiet and then the title can be insured upon, or you can look to the previous owner and see if they will sign over a quick claim deed for a couple hundred bucks. Then you own the house! crazy right?
So my idea is to search and find these somewhat worn houses and apply to buy for around $500-$1,000 and get the deeds and then turn around and sell it to one of those "We Buy Houses For Cash" businesses. I wanted to do this because banks wont lend to anyone wanting to buy a place doesnt have title insurance, but since these people pay with cash, the insurance wouldnt matter! I read that those people generally offer around 70-80% the marketable value, so I could potentially pay $900 for a house worth $60k and sell it to them for maybe *hopefully* $25,000. Then just repeat this process until I have enough money to put down on a commercial real estate property to start acquiring equity.
Let me know what you guys think! All help is greatly appreciated and encouraged