Tax Deed in Atlanta question

Tax Liens & Mortgage Notes
12yFollow

Tax Deed in Atlanta question

Rick Baggenstoss
Developer · Decatur, GA · Member since 2011 · 1k+ posts · 1k+ votes

I'm looking into purchasing a Tax Deed(s) in metro Atlanta, Georgia.  Tuesday I'll go to bid on a couple of them.  

My questions are:

- When a property is in pre-foreclosure, would you expect the bank to redeem?  Early or last minute?

- Since you're acquiring the Tax Deed, does the premium apply to the amount paid or the amount of taxes, penalties, etc.?

- I'd like to own some of these houses.  It seems safe to say the properties with lengthy periods of tax non-payment are most likely to be houses the high bidder could foreclose upon.  Is this a fair assumption?  

Thanks for your thoughts.

Rick

2Reply
134 views

Most Popular Reply

Tom Yung
Investor · Winnipeg, Manitoba · Member since 2013 · 303 posts · 321 votes
12y

@Rick Baggenstoss

This is just based on my limited experience.

1) when a property is in per-foreclosure, I will expect the bank to redeem. Most asset manager is so slow on their moves. I will say after you acquire the tax deed.

2) In GA, you are getting 20% penalty for the amount of the winning bid.

Let's say outstanding tax & interest & service fee are $1000.

You won the bid for $30K. You will get 20% penalty on day 1 & additional 10% over 1 year.

3) My experience with GA tax deed redemption rate is under 40%, Usually are the closing agent goof up on the closing without paying the tax.

Hope this helps  a little

4Reply
See this reply in the discussion

32 Replies

Jump to latestLatest
  • Jessie Griffin
    Rental Property Investor · Saint Petersburg, FL · Member since 2015 · 33 posts · 18 votes
    8y

    @Yanling Wu, the Hedge Funds have more money than they know what to do with so they try to just house their funds in anything with a guaranteed return, even if it's only 0.25%. Since they can always file for the tax deed and get their money back plus interest, it is a no brainer for them and it's much more legal than laundering their money. I work in a bank and see first hand how they filter their earnings through the system in creatively various ways. They do indeed have a system that cannot be beat. They set up hundreds of thousands of different LLCs in order to do massive group bidding and get more chances of winning. For example, one HF could have 250,000 LLCs set up (not an exaggeration) and therefore can have 250,000 bids in the pot for 0.25%. If there are 50,000 other investors bidding 0.25%, who do you think will win? When one of these LLCs wins, they simply transfer the certificate to the main HF holdings. Most of the FL counties will actually show you how many bids were on each property after the auction. It's quite interesting. You can see when an HF has bid on it because one property will have 200 bids and the other will have 275,000 bids. Example from Pinellas County's 2017 auction below. The bids Submitted were 449k on the first and only 213 on the second. 

    My ListAdv No.BatchParcel No.Face AmountTax YearBidsSubmittedAction
    139 101/27/15/27072/010/0210$254.54 2016 449,507Not Submitted
    140 101/27/15/27072/010/0220$290.89 2016 213Not Submitted

    In regards to your Tax Deed question, it really all depends on the property and county. Orange and Broward counties in FL have so many bidders, they usually go well above the assessed value. If you look more towards smaller, more rural areas like St Lucie and Escambia, then you can get fairly cheap. Just do your research and don't bid more than your original bottom line. Remember also if you plan to sell the property within 4 years, you'll need to clear the title which is about $2,800 with a title clearing service and expect that to take anywhere between 30-60 days.

    0Reply
  • Yanling Wu
    Atlanta, GA · Member since 2017 · 6 posts · 0 votes
    8y

    @Jessie Griffin Thanks for the detailed explanation, Jessie. If the stock market keeps rising like this January, maybe HF will be more interested in funneling their money back to the stock market, lol

    0Reply
  • Ronke Adetoba
    Member since 2020 · 5 posts · 0 votes
    5y

    Tom Yung

    @Rick Baggenstoss

    What can be done with unbuildable lots purchased in GA tax sale? Or property classified as HOA rec area?

    Thanks


    0Reply
  • Rick Baggenstoss
    OP
    Developer · Decatur, GA · Member since 2011 · 1k+ posts · 1k+ votes
    5y

    Community farms, public land trusts, tiny house, ... requires a lot of creativity and isn't what should be purchased at tax sale until you're sure.

    0Reply
  • Yixiong Pan
    Member since 2024 · 33 posts · 10 votes
    1y
    Quote from @Tom Yung:

    @Rick Baggenstoss 

    Yes, i have seem some quality property bid up almost to retail. and it is always the same 5-6 bidders that you see dominating the winning bid. I think few of them has their own brokerage firm.

    I just have a property redeemed by an asset manager before they put it into foreclosure auction. The shortest time I experienced is between 3-90 days when they are in per-foreclosure. It can be a very good passive income even if I have to figure in my traveling cost against the 20%. In you case, it is much cheaper, be there early, so you got a spot at the front. Sometimes it's hard to hear.

    Actually I see more & more people in the last couple auctions than before. So competition is high. Good luck on your bidding.

    although this post was 10 years, i figured it's still very useful. thank you for whoever contributed to this topic.  looks i'm in the similar situation as a remote investor. Since the potential properties can be removed from the list in last min,  my major concern is when i fly in, the properties i'd liketo bid on could be already invalid from the list at auction.  how do you handle such risk ? i'm looking at Chatham County's upcoming tax sale, couple single families look decent, but not sure how much it will be bid up, and whether they will be still available.   

    @Tom Yung

    0Reply
  • Tom Yung
    Investor · Winnipeg, Manitoba · Member since 2013 · 303 posts · 321 votes
    1y

    @Yixiong Pan Chantham county is where Savannah locates. Expect the properties bid up close to retail(70- 80%). Also with the population growing due to foreign plants opening shop there. competition can be very fierce & properties left for auction is minimal. Most will paid off before auction.

    1Reply
  • Yixiong Pan
    Member since 2024 · 33 posts · 10 votes
    1y
    Quote from @Tom Yung:

    @Yixiong Pan Chantham county is where Savannah locates. Expect the properties bid up close to retail(70- 80%). Also with the population growing due to foreign plants opening shop there. competition can be very fierce & properties left for auction is minimal. Most will paid off before auction.

    Thanks for the insight !seems not worth to fly in then 
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free