Are You Interested In Purchasing Tax Sale Properties?

Question

What Are Tax Sales?

In General, Tax Sales are Actual Sales of Real Estate Properties or the Actual Taxes related, associated, attached, or imposed on a Property - due to unpaid Real Estate Taxes or Delinquent Accounts. The taxes are "due" to the taxing jurisidiction where the property is located and when those taxes are left unpaid the taxing jurisidiction has the authority or right to sell the property or the taxes associated with that property to the general public, banks, investors, etc. in order to restore the accounts or properties back to the active tax roll.

Who Is Authorized to Sell Tax Sale Properties?

In General, Authorized Tax Sale Properties are sold by the Tax Collectors' Office, Collector of Taxes, Board of Commissioners, or the Tax Commissioners Office in the region where the Delinquent Properties are located. Tax Sale Properties are also contracted-out and sold by Auction Companies, Attoneys-at-Law, Law Firms, Private Companies, and/or Sheriffs' Departments throughout the U.S.

Types of Properties Sold/Offered at Delinquent Property Tax Sales

Due to Unpaid Real Estate Property Taxes or Delinquent Accounts, Real Estate Property of All Types is offered For Sale throughout the United States by Taxing Jurisdictions, namely, States, Counties, Cities, Towns, and School Districts that have the right or power to impose property taxes in their respective areas. Types of properties include:

1. Apartment Complexes

2 Commercial Lots

3. Commercial Properties

4. Mineral Rights Properties

5. Mobile Homes/Lots

6. Multi-Family-Dwellings (units)

7. Single Family Homes

8. Store-Front Properties

9. Town Homes

10. Vacant Residential Lots

Earning Interest on Your Money or Acquiring the Property

The Fact is that, unless you are exempt from paying taxes, property taxes must be paid on Real Estate Property in the State(s), Counties, Cities, Towns and/or School Districts where you live. If not, the governing bodies by-law must either Offer the Property for Sale through what is known as a Non-Judicial Tax Sale, Judicial Tax Sale, Tax Deed Sale, Tax Lien Certificate Sale, Tax Title Sale or a Tax Foreclosure Sale. In addition, the general public (Anyone, including Banks, Investors, Companies, etc.) can purchase what is known as Certificates of Purchase, Tax Lien Certificates, Tax Titles, Tax Deeds, etc. and earn a lot of interest on their money. Depending on the State, City, Town or Area, actual Real Estate (Properties) or any of the aforementioned (Certificates, etc.) can be bought for as little as 25.00 - $50 - $100 - $200 on up to $1000s' of Dollars.

In Georgia, for example, if you attend a Tax Sale and are the successful bidder on a Property in which taxes due were $1500.00, you automatically earn 20% on your $1500.00. That is an additional $300.00 you make (subject to the property being redeemed by the owner or anyone who has an invested interest in the property). This simply means anyone, including heirs, who is on the title at the time the property or the taxes were offered at Tax Sale. Often times, including banks on record, the property is not redeem. If this is the case or happens, than you do not Get Your Money-Back (nor do you get the 20% or the $300 that you may have expected. The Good News is, however, that you Actually do, by law, Get the Property that You Bid-on "Free and Clear" of All liens and Mortgages.

Note: If and it is not the case on all properties at all, but if the IRS has a lien against the property than they have about 180 days to exercise their right to do what they do. There are thousands if not millions of properties in the U.S. in which there are no IRS-Liens at all (on properties) that are well worth Investing, Owning, Bidding or Purchasing at Tax Sales. The Deals are amazingly - Endless!

Restoring Properties Back to the Active Tax Roll

Property Taxes is the main income or revenue generator for Governments. These necessary funds may go unpaid by Property Owners for various reasons (Death of Property Owner, Divorce, Relocation, New Jobs, Loss of Income/Wages, etc..). To restore properties back to the active tax-roll and/or to recover the back-taxes, Delinquent Real Estate Property Tax Sales of all types allow our state and local government(s) to continue to operate and perform the necessary activities or actions that are needed to serve all-citizens throughout each State, City, Town, etc.

Much Success As You Invest, MoneyMakers

Ned Carey · Answer

I was small time when I started. Your advantage is you can examine each property more carefully that I can. I used to spend a lot of time checking things to see if I could figure which ones I was likely to foreclose on with my limited funds. Today I drive by and make a snap decision what it is worth in about 10 seconds.

My most profitable lien made $28K last year. You only had to bid $1.00 more than me and that could have been your $28K

Account Closed · Answer

IRS lien redemption period is 120 days

You might mention some of the negatives of tax sales

Looking through your past posts I'm inclined to think your just posting to drum up business

Ned Carey · Answer

This doesn't sound right but all states are different and perhaps they are simply using different terminology. If you have a tax lien you must foreclose on it before you have any ownership. (some states sell tax deeds and you are buying the house outright) Then you may also need to do a quiet tile action. Perhaps what is being called the quiet tile, is actually the foreclosure.

In my area the attorneys charge about $1500 for the legal work and there are about another $1000 in miscellaneous costs for the foreclosure. Examples of other costs private service, Advertising in the newspaper, sheriff fees, Certified mail, title search, etc.. If the owner is deceased we may have to open an estate, just to have someone to serve notice to. That can cost an additional $1200.

Then we have to pay the "Subsequent taxes" In other words we have to catch up any taxes and bills that have come due since the original tax sale in order to record out deed.

Here are the actual numbers of that deal

• $1,547.20 lien amount - I bought this as a leftover lien as face value.
• $3,012.04 legal fees
• $2,211.04 Subsequent Taxes
• $6,770.30 Total Cost

$45,000.00 Sale Price

$1,928.89 Misc. sale costs

$36,300.81 Total Profit

Total time 2 years 1 month

Here is a view of the rear of the house. You an see it was boarded up when I bought the lien.

Ned Carey · Answer

@Andy Gross I started today for the auction end of May in Baltimore. Yes most I look at will be removed from the list, but there is no way to look at as many properties as I need to unless I start early. Of the properties that I look at about 1/2 to as much as 2/3 will be removed from the list by the time of the sale.

I look at 5-6000 props to generate 2000~ bids

Ned Carey · Answer

@Greg Gaskill Generally (this varies by state) when you buy a tax lien, when the owner pays off the taxes you get interest on your lien investment. Interest rates vary and often are bid down in the auctions but I have bought many liens where I earned 18% interest until the owner redeemed. IE: buy a lien for $1000, the owner pays off in exactly 1 year. I get my $1000 back and $180 interest.

If they don't redeem you can foreclose on the property. My very first tax lien was a $1600 lien. I was able to foreclose - total cost about $9000. I sold that property for $45K without doing anything to it. Total profit $36K That deal was the exception - I haven't done one that good since but it can be profitable if done right.

Of course you didn't ask about the losers.

Christina R. · Answer

The first time I saw this in action I couldn't believe it. I think it was actually more like 5 seconds to determine value. Of course, that's after years of experience Ned acquired by driving the city and now knowing it like the back of his hand.

Andy Gross · Answer

@Ned Carey

There are several revisions done to the Tax Sale list before the final list is out. When you do begin your research on target properties? It would seem that you might end up doing a lot of driving around only to have a property taken off the list before auction.

Stacy Petty · Answer

@Greg Gaskill

My husband and I invest in AL. We have 3 tax deed quotes that we will gladly reassign for a fee. You don't own the property outright, but you do get access to the home (possession) which entitles you to take possession and put a renter in it. Send me a message if you are interested.

Ned Carey · Answer

@Jonathan Frausto That will depend on your county. Some counties may offer a list a properties that are behind in their taxes. But just because someone is behind in their taxes does not mean you can buy the lien or tax deed. It think it is unlikely you would be able to get such a list but it could be a good marketing list.

You should be able to get a list of properties that are actually going into the tax sale. Although that list may only come out once a year before an annual tax sale. You can then bid on those properties in the tax sale or again use the list as a marketing list. Each state and often each county has different rules and procedures so it make take a bit of hunting to find the info.

Jonathan Frausto · Answer

@Ned Carey

When I go to my county clerk or court house. Can I just walk in and say I'm an investor and would like a long list of properties with unpaid property taxes for the quarter? (or whatever time frame)

I'm trying to buy and flip houses before they hit MLS because housing prices are starting to go up.

Any advice on the matter or subject or just your opinion would be greatly appreciated.

Thank you for your time in advance

Are You Interested In Purchasing Tax Sale Properties?

Are You Interested In Purchasing Tax Sale Properties?

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