Los Angeles County Tax Deed Sale
Investor · Los Angeles, CA · Member since 2010 · 116 posts · 36 votes
I see there is a LA County tax deed sale coming up in mid October.
There are some pretty nice properties that are being auctioned off for a few thousand or tens of thousands of dollars - should I count on the decent properties (i.e., those that are not plots of land in the desert covered in snakes and weeks) going for near market prices? Or is it possible to get a good deal at the tax auctions?
Has anyone had any experience successfully buying properties at the LA County Tax auctions?
Hello Josh,
It is probably difficult to determine if some of the most desirable properties will go for or near Market Value Price or not---having not attended the sale. Here is a strategy that may work for you:
I attended a Sale in GA with the same question in mind. I also wanted to find out for myself if all of the Properties that were being offered were desirable or not. Well, I discovered that the Heavy Players already had determined which properties they were interested-in or going to bid-on. They were not interested in every property on the list. This sale (for your reference) which just took place this Past Tuesday (1st Tues in Nov). had about 800-1000 properties, subject to a one year redemption.
Furthermore, because I had a courtesy list of properties offered at the Sale I was able to go back home and analyze those properties that were Not-Sold/ which received NB-no bids---and learned that there were soooo many GREAT DEALS left on the Table.
So, in short, I guess a desirable property depends on what you like/want to buy at a sale. Some people want properties with improvements, some want vacant lots, or adjacent vacant lots--some want houses they can live-in, etc...
However, since you mentioned California and lots located in desert-like zones, I would say that those are proberly undesirable ones for you. If I may say: You may also want to check-out other counties in California that may have more properties to your liking (those not in desert-like zones)--or try other Tax Deed States as well, or a Tax Lien State where you can at least earn interest on your money and if it (the property) is not redeemed then because you have a "priority" Tax Lien Certificate on that parcel, you can foreclose on-it--getting the property Free & Clear. If that is not your goal, then try a jurisdiction (city/state) where they just hold Tax-Foreclosure Sales (with a shorter redemption period or no redemption at all)
Just remember: There are plenty of Opportunities in this Business:
Let me know if I can be of further help to you.
As Always, Much Success As You Invest!
Hello Josh,
It is probably difficult to determine if some of the most desirable properties will go for or near Market Value Price or not---having not attended the sale. Here is a strategy that may work for you:
I attended a Sale in GA with the same question in mind. I also wanted to find out for myself if all of the Properties that were being offered were desirable or not. Well, I discovered that the Heavy Players already had determined which properties they were interested-in or going to bid-on. They were not interested in every property on the list. This sale (for your reference) which just took place this Past Tuesday (1st Tues in Nov). had about 800-1000 properties, subject to a one year redemption.
Furthermore, because I had a courtesy list of properties offered at the Sale I was able to go back home and analyze those properties that were Not-Sold/ which received NB-no bids---and learned that there were soooo many GREAT DEALS left on the Table.
So, in short, I guess a desirable property depends on what you like/want to buy at a sale. Some people want properties with improvements, some want vacant lots, or adjacent vacant lots--some want houses they can live-in, etc...
However, since you mentioned California and lots located in desert-like zones, I would say that those are proberly undesirable ones for you. If I may say: You may also want to check-out other counties in California that may have more properties to your liking (those not in desert-like zones)--or try other Tax Deed States as well, or a Tax Lien State where you can at least earn interest on your money and if it (the property) is not redeemed then because you have a "priority" Tax Lien Certificate on that parcel, you can foreclose on-it--getting the property Free & Clear. If that is not your goal, then try a jurisdiction (city/state) where they just hold Tax-Foreclosure Sales (with a shorter redemption period or no redemption at all)
Just remember: There are plenty of Opportunities in this Business:
Let me know if I can be of further help to you.
As Always, Much Success As You Invest!
Clearly I am late to the game on this post, but just wanted to say that your response was incredibly helpful @G.D. Haizlip! I'm going to try to check out some tax deed auctions and put your strategy to use. There have to been some workable deals out there going unclaimed.
I am new to real estate investment. Glad to have found the BP site and now reading articles, threads and watching webinars to learn real estate investment. Tax sale seems pretty interesting to me so I'm looking forward to this year's L.A. tax sale that's coming up in October. Once the list is out, I'm going to do my research to narrow down to a handful of properties, then drive to the physical locations to have a looksy since I live in L.A. It would be awesome for me to win just one single bid.
If anyone has done a L.A. tax sale I would love to hear your stories as well as what are some of the do's and don'ts, tips, strategies, what to watch for, to guide this newbie to win a bid.
Rick
There is actually one coming up in Los Angeles on August 5th. http://ttc.lacounty.gov/proptax/auction_generalInfo.htm
So here's the deal on the L.A. Tax Deed Sale. I've been to this before.
There are many properties offered in the original listing of properties to be bid on. However, the property owners do have time to pay their taxes (a couple of days?) before the auction takes place. The actual properties that will go up for auction will be less than the original posted list of properties for auction. Some of these owners pay their taxes late because it's lucrative for them to have the cash on hand until they are at the last straw. Others can't pay their taxes and don't want to lose their property. Savvy investors work out deals with those property owners before the deed goes to the auction block. For instance, if I see xyz property that I like and I do some research and find out who the owner is and how to contact that owner, I might be able to work out a deal with the property owner to pay off their taxes and then buy the property from them at potentially a discounted price. I've never done this but others have told me about this approach.
Do your research before hand. It's a lot of work. Set a bid max for yourself. You don't need to win any bids if the price goes over your threshold. There are so many people competing to try to get the same quality property that the bidding can go higher than your threshold.
Beware of plots of land that are on hillsides. Unless you intend to get a contractor to build on the hillside, you're not necessarily going to find buyers.
Make sure you have a money order in the amount of what your max bidding will be + extra.
Overall, in L.A. County, your competition will be commensurate with the # of properties up for auction.
Has anyone here purchased property via the LA County Tax Auction? Other than the IRS and weed abatement liens, are there any other liabilities that do NOT get discharged from the property bought at the Auction?
Also, other than the IRS tax lien, are there any items that would not come up doing a deed search done at the LA County Recorder office?
I have about 10 properties I want to bid on, but don't want to pay for title searches on all 10 when I don't know if all 10 will be available on the auction date.
Thank you for any help in advance
@Jae C. In CA there is a litigation period of 1 year. For example, supposed you as a tax payer pay your taxes but they cross in the mail from the date the auction was last updated and sold to the recording of the payment. This would be considered an erroneous sale. You as a purchaser should wait out that litigation period as it is a time frame for the property owner to contest in court if the sale of the property was erroneous. After one year there is nothing that can be done about it if you sell or rehab the property even if it was an erroneous sale. This is something to pay attention to and be aware of. The next thing is that you will need to have a 5K deposit which is refundable or will go towards a winning bid. I say the rule of thumb for those that are up for sale is half of the assessed value unless you have inside info about something happening in the area like a new Wal Mart going up or a new Strip Mall making the property more valuable. These are things you can talk to the zoning department or the planning and development to find out about. Next thing is stick to the set ceiling you have on a property if it is up for sale. Even with half of the properties no longer available you will still have plenty to choose from. Some of the years the property listing was the size of a phone book. Keep in mind that all encumbrances such as weed abatement, water and sewer, boarding up, all things from the City, County or State that need to be done to keep a property up does not go away. An IRS lien is not the end of the line either. Take some time to see what the amount is, weigh the odds and then see if it's worth it or not. I know of one house that sold for 57K with the IRS lien included. The house still went for 120K? Now that LA has some of their auctions on ************** for many of the properties in LA County you will see less of the heat at the auction. The one that is live is very heated. Good luck and let us know if you participate in one and how it goes.
Thanks, Josh! It seems from my online search, paying for a title search is the only way to go to be sure about a property and even then, it can take 72 hours. I guess it's the cost of doing business, but since some of these properties may be pulled, it seems like there should be a better way.
Also, some of the properties I plan to bid on are commercial properties with what looks like to be ongoing businesses on the property. What protections do new owners have from tenants who can falsely say that they prepaid 20 years of leases upfront?
Are aware of the redemption period for the tax sale?