Hi All - my first post on this forum and about my first lien purchases. I purchased couple of tax lien in Indiana commissioner sale - porter county. The liens were not redeemed. One of the liens had a manufactured home on the lot of 9600 sq foot, no the home is removed and other one has 1950 built house, don't know the condition since someone is living in there. Both are in Locust St, Portage, IN.
the liens including attorney expenditure costed about 2500$ each. Now
- Should I go for the tax deed on the vacant lot - is it worth the headache to get it and sell the land ( The county valuation is 20K)
- On the 2nd lien - thoughts ? how to proceed and what are the next steps that I should be taking related - Is it worth to apply for tax deed and if so any next steps etc.
I would appreciate any insights and if you have experience please post it to me. I am also interested in further investing in tax liens and any tips and guidance will be helpful.
@Jay Marn A couple of things to mention first. 1) Congratulations on taking action and making your first lien investments. Many people get "analysis paralysis" and never take the action.
2) I see you're in Redmond, WA. How did you come about investing in Porter County Indiana? My personal two top rules of lien investing are (A) - Know the laws of the state/county for liens and (B) - Know the area I'm investing in. Are you from the area originally or visit frequently or have contacts there? Just curious as to how that area came into your investing view.
I took a quick look at the SRI auction website that Porter county uses. I see there were 25 parcels listed on Locust in the city of Porter. Had you seen those parcels in person? If you provide me the Parcel numbers I'll take a look at the specific parcels online. I might be able to get out there in the next month as my son goes to college in Valpo and I'll be driving right by there.
Before you worry about foreclosing, what is the redemption period in Indiana for vacant and improved land? I took a quick look at the statues online and it depends:
(a) The period for redemption of real property sold under IC 6-1.1-24 is:
(1) one (1) year after the date of sale;
(2) one hundred twenty (120) days after the date of sale to a purchasing agency qualified under IC 36-7-17; or
(3) one hundred twenty (120) days after the date of sale of real property on the list prepared under IC 6-1.1-24-1(a)(2) or IC 6-1.1-24-1.5.
Do a search of Google "Indiana statutes tax liens" and grab a cup of coffee and get ready to take notes and follow links. There's a lot of information there.
As a rule, you should have an idea of your exit strategy before you purchase a lien. You can easily buy liens on "junk" properties - those that are worth less than the lien amount plus legal fees to foreclose.
Not that it's the best resource, but at least look at Zillow/Trulia for vacant land values for the former mobile home site. You can do the same for the home parcel. Look for recent sale data if possible -that is far better than those website estimates. You can always call a realtor in that area for a better number too.
Get an idea of what a tax lien foreclosure costs. Get that from an attorney who specializes in tax lien foreclosures in that area. Normally I'd give @Ned Carey @Wayne Brooks and my own advice, and tell you to take an attorney to breakfast to discuss (and don't forget, you're buying), but being in WA may make that difficult.
If the lot is truly worth $20k and if foreclosure would cost about $2k-$3k, then you have room to make a profit. You can always liquidate the lot for $10k-$15K, but that could take a while. Should you end up with the lot in the future, you can offer it to the neighbors first. They are your best bet. But I think I know where that lot may be based on the Google street views and a lot in that area I'm thinking of could be a tough sell:
Good luck and let me know the parcel numbers if you want me to look further.
Jerry K made some very good points.
If Jerry is going to swing by there in the future have
him check to see if the vacant lot has septic or municipal
sewage in addition to a well or municipal water as well as
electric. Once you get title to the vacant lot advertise in
Craigs List for that area that you have a mobile home lot
for sale. (with all utilities)
Also call local mobile home dealers and tell them that
you have a lot available if they have customers that are
looking for a lot to put their new mobile home on. Now you
either sell the lot or rent it for whatever moble home lots go
for in that area. If you can get $300 a month lot rent you
will recoup your invetment in a short period of time. Once
you get seasoning on the lot rent you could sell the lot to
a local investor.
There are some other options with greater return yet you are
out of the area and you would be hard pressed to get them
Also call local porpane distributers and ask if they deliver
propane gas to that area. If so tell them you will give a referal
fee if they refer a buyer for the lot. Most mobile homes in rural
areas use propane and the dealers have connections in the local
mobile home community.
Look in CL and see who is advertising mobile homes for sale. Find
someone who is a wholesaler and tell him you have a lot and will
give him a referal fee.
You also might consider buying a used mobil home and placing it on the lot and then selling or renting.
Thanks folks for valuable suggestions.
@Jerry K. I am not from the area. I was reading up on the tax liens for about 6 months now and found that Indiana to be the best place to start with. Specifically porter county - not any good reasons but came across the commissioner sale when I started, which had a redemption period of 120 days. Here are the 2 parcel - 64-05-10-331-006.000-016 and 64-05-10-329-011.000-016 . If you plan to visit the place and give me your insights I would greatly appreciate it.
I'm closer to said parcels and might be of assistance. I'm a newbie but I'd love to help out if I can.
Ashton - I would greatly appreciate if you can visit the properties and provide me your feedback. Let me know if you need additional information.