Tax Lein vs Tax Sale - How To Get The Actual Property?

[Isadore Nelson]

Good morning, Is there a practical difference between a tax lien sale and a general tax sale? Specifically, is there a statistical difference in the likelihood of actually acquiring the physical property versus simply earning interest on the debt as a financial investment? What does the data show about the chances of ending up with the property itself in a tax sale in Connecticut? Thank you!

[Isadore Nelson]

I would like to consider acquiring a property at a tax sale, and do not mind waiting out the 6-month redemption period, assuming the chances are high that I will indeed end up with the actual property at the end of the 6-months, if that makes sense?

[Bruce Lynn]

Yes...some states are what we call tax lien states, some are tax deed states and some states are hybrid.

You can read more about CT tax sales here:  http://cttaxsales.com/
http://cttaxsales.com/wp-content/uploads/2012/10/GENERAL-INF...

[Isadore Nelson]

Quote from @Bruce Lynn:

Yes...some states are what we call tax lien states, some are tax deed states and some states are hybrid.

You can read more about CT tax sales here:  http://cttaxsales.com/
http://cttaxsales.com/wp-content/uploads/2012/10/GENERAL-INF...

Thank you. Is there a different though regarding chances of actually getting the property itself, if the redemption period always exists? It seems like a technician structural different not an inherent one, unless I'm missing something?

[Scott Mac]

Is there enough of a data set of these tax sales In your area, during the recent economy, to come up with a statistical likelihood that is reliable??????

[Bruce Lynn]

Quote from @Isadore Nelson:

Not sure anyone can actually accurately answer your question about redemptions.
As @Scott Mac mentioned, I am not sure that data exists or if it does, that it is easy to find.
I would guess in tax lien states, redemptions are common.
I would guess in tax deed states, redemptions are rare.
I can tell you my experience in Texas is that very few redeem.  Probably less than 1%.  We are a deed state.  So when you buy at the sale, you get the deed.   I've only had two redeem and one call to ask about redemption.  Both were the nicest properties I ever bought, and in both cases they were occupied.  One was a commercial building turned into a residence.  One was a nice home on I think 25 acres and owner's girlfriend was living in it.  Both paid the 25% penalty to me.  One was at their six month time limit...like a day or two before.  The other was day after the sale.
So that's the problem with a lot of the trainings....they'll tell you that you can make these huge % penalties, but they don't tell you that almost no one ever pays that.
Also I'm guessing in lien states, many of the liens are pretty small initially, so have more potential to get paid off.  I would think in deed states, normally takes way more money to play up front.
All this is pretty much just a guess.  I think in many places it is more of a gut game, than a hard core data game.  I could certainly be wrong on all of it.  Every city, county, state is different, even when the laws are often the same.