State Held Tax Delinquent Property in Alabama

[Shea Prior]

Just wanted to know if anyone has any experience with this in the Alabama (Mobile) market? 

We have a 3 year right of redemption here, so I can go on our revenue commissioner website and look up parcels and apply to buy the property for an amount they email me, and if the state has owned that property for 3 or more years, they would issue me a tax deed. 

I've done a little research on it and understand that I would have to either take open possession for 3 years, which could be a bit risky, or I could pay around 3k - 5k and file a quietclaim deed through the courts after I receive the tax deed. Then it would be mine I understand.

What am I missing here? This sounds too good to be true? Is this something you have done successfully in Alabama? What have you learned in the process, or what should I watch out for? What kind of attorney should I look for to do the quietclaim deed? Am I skipping steps?

I have all the questions! Insight on this is so appreciated.

Thanks, Shea

[Denise Evans]

@Shea Prior, Thanks for shout out, @Bruce Lynn  

Not too good to be true. Might not have sold in original auction because there was too much inventory going through and the local investors that wanted real estate already bought everything they wanted. It might have been a low-chance of redemption, which made it undesirable to the institutional investors. Sometimes it has gone through two auctions. The original buyer might have been an institutional investor. When nobody redeemed, they just cut their losses and quit paying the taxes and it went through a second auction. When it goes through a second auction, the other institutional investors know not to buy it. But, the local investors are scared because they wonder what was wrong, that the first investor just gave up. So, nobody buys is and it goes on the state inventory.

You MUST take possession within three years after the tax deed or the former owner can get it back and pay you nothing.  You CAN take possession immediately because the statute says you can.  You can take DIY possession if the property is legally abandoned, which is different from "vacant and in bad shape."  You can file an ejectment lawsuit if you can find somebody on whom to serve lawsuit papers.

Even though you have a tax deed, former owner or heirs or lienholders can still redeem. A tax deed and three years of continuous possession lets you file a Quiet Title lawsuit and get a court order that you have free and clear title.  Or, if the former owner is still alive and there were no liens against the property, you can pay them a little bit of  money (less than a QT lawsuit would cost) and just pay them to sign a quitclaim deed. Then you have free and clear title. The liens get wiped out by the tax sale, but they still have redemption rights. If there were liens, just getting a quitclaim from the owner does not solve your problems.

It can get complicated, but there are huge rewards at the end of that muddy rainbow.  You can DM me if you want.