I am a Georgia-based investor and am interested in purchasing tax deeds in our state. I recently read about a strategy where an investor could purchase a quitclaim deed from a homeowner facing a tax sale and then collect the excess funds from the sale of the home at the auction.
This sounds great, except I don't see a reason for the homeowner to sell to me. What am I missing here? What motivation would a seller have to convey their interest in a financially distressed property to me prior to a tax sale?
A lump sum payment now vs a "maybe" later. Basically taking advantage of an ignorant party. I knew a guy that use to buy debts from the people who were about to lose a property and tap into the excess funds that way.
They don't make strong enough soap for me to invest in such a way.
Be careful, you can get REALLY burned on tax sales in SOOOO many ways! Not sure who came up with this strategy, but it seems High Risk / Low Reward with the complicated time lines and legalities of tax sales. If you happen to purchase a property facing a tax sale, you better pay the back taxes ASAP or you could be paying a PREMIUM to the investor that purchases your tax deed at the auction to clear up your title.
A better strategy is to find people who have lost their properties to tax sale and are owed excess funds. Then tell them that you'll help them get those funds if they give you a percentage. You run the risk of them going around you once they know they're entitled to the money, but many times they'll be happy to fork over a chunk of cash to you in return for their not having to do anything.
Keep in mind that different states/counties have different laws around excess funds, so what I wrote above may not work where you live. But, I do know people doing in certain parts of the country.
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