Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
9mo
1. Read and understand the law and the process. LOTS of online resources about NYC sales and opposition to them.
2. If your sale is live, go in person 2-3 times with your list and see at what prices the liens sell or at what interest rate. Don't bid the first 2-3 times, go to learn.
3. While you are there network with everyone. Ask questions. Learn everything you can. See if it makes sense to invest.
4. Know how you have to pay. Is it cash, same day? Deposits before you bid? or what is the system of payment. Know how redemptions happen. What happens if they don't redeem, how do you get the property?
5. Know what you are responsible for...for example future property taxes, operating expenses, water bills, etc. Seem like in many places for example bidders are responsible for outstanding municipal water bills. So if you have to hang on to a property where people are stealing water and have for many years, you may get stuck with a huge water bill. I'm making up numbers, but heard of a nearly vacant office building in NYC that might sell for $1mil at the normal mortgage foreclosure sale, but has $8mil in operating expenses. Needs full rehab. The lesson is, you may have to pay a lot more in expenses than just for the lien to in the long run get a profitable property.
6. YOU will have a ton of competition. It will not be easy money.
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
9mo
1. Read and understand the law and the process. LOTS of online resources about NYC sales and opposition to them.
2. If your sale is live, go in person 2-3 times with your list and see at what prices the liens sell or at what interest rate. Don't bid the first 2-3 times, go to learn.
3. While you are there network with everyone. Ask questions. Learn everything you can. See if it makes sense to invest.
4. Know how you have to pay. Is it cash, same day? Deposits before you bid? or what is the system of payment. Know how redemptions happen. What happens if they don't redeem, how do you get the property?
5. Know what you are responsible for...for example future property taxes, operating expenses, water bills, etc. Seem like in many places for example bidders are responsible for outstanding municipal water bills. So if you have to hang on to a property where people are stealing water and have for many years, you may get stuck with a huge water bill. I'm making up numbers, but heard of a nearly vacant office building in NYC that might sell for $1mil at the normal mortgage foreclosure sale, but has $8mil in operating expenses. Needs full rehab. The lesson is, you may have to pay a lot more in expenses than just for the lien to in the long run get a profitable property.
6. YOU will have a ton of competition. It will not be easy money.
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
9mo
@Michelle Backer I can't speak directly to NYC tax liens as I invest in Maryland. I can tell you some generalities about tax sale.
Tax sales have become very competitive. As investors bid higher to compete, the risk goes up and the returns go down. In Maryland we bid both; the interest rate down, and the price we will pay for the property if we foreclose up. This last year interest rates were bid to 1-4% and the price of the properties up to and sometimes over 100% of the assessed value. Lots of investors are going to lose their shirts when they find they made almost no money on interest and will lose money if they foreclose and take the property.
If you bid more than the property is worth and no one redeems the taxes, you lose money. Despite Guru ads, there is no government guarantee and you can absolutely lose money in tax sale.
So my advise
1) Know the rules, (See Bruce's post above). What are you bidding on, how does the bidding work, what are the hidden costs. etc.
2) Know what you are bidding on. Sometimes you only get a tax ID or description of the property with no street address. Many properties that are in tax sale are worthless strips of land. You need to know exactly what you are buying.
3) Know the true value of what you are bidding on. The tax assessed value may be no where near what the property is truly worth.
Investor · PA · Member since 2019 · 54 posts · 51 votes
8mo
I am just now getting into Tax Lien /Tax Deed investing and have taken a couple of very expensive classes. DO NOT do this until you understand the specifics of the county in which you plan to invest. There are huge differences in the over 4000 different counties in the USA and everyone does it differently. There is a lot to know and if you make some simple mistakes you can be out your investment. If you get a mentor or take a good course there is money to be made and you can make in small ways or multimillion dollar deals. BUT you need to know how and that takes either a mentor, a good class, or lots of reading and networking. Like anything in Real Estate, there are a variety of ways to do it. Start by checking out youtube.com loads of the good the bad and the ugly. But, you will get a good idea of how complicated it can be.