During a casual drive for dollars I came across a house that has some tell tale signs it's abandoned. (out of control lawn, broken awning, looks like nobody has been home).
So I decided to go to look up the property and see who owns the house and if the taxes have been paid. I see 2013 and 2014 have not been paid according to the county website.
The taxes are reasonable to pay to bring current (approx. $6K) but I've never done this before. The houses in the area sell for around $120k. Can someone please direct me as to what steps I need to accomplish in order to do this correctly?
My goal would be to eventually acquire the property, fix it up and sell it. I also know the owner can come back and pay me to get control of their taxes again. If that was to happen how do I establish an interest rate to get paid back and how much time do they have pay me in full?
Your feedback is greatly appreciated!
If you paid the delinquent taxes on a property I owned, I'd show my appreciation by thanking you. Might even send you a Starbucks gift card for a cup of Joe.
Seems like there's a big disconnect here. Why do you think paying a stranger's taxes obligates them to reimburse you, let alone pay you interest?
You need to either buy the asset from the record owner, find their heirs so that a way to pass title to you may be determined, or buy the debt and foreclose.
@rickharmon I guess I'm wondering how a tax lien works. It's my understanding if someone falls behind on their property taxes someone can pay them and now have an interest in the property. Once that happens the current owner is notified the taxes have been purchased. If the money is not paid back, and with interest, the owner can lose the property to the one who took over the delinquent taxes.
My apologies if my initial post left you wondering what I was talking about. I am hoping someone here will clarify this for me.
Tax liens are auctioned by the county. You would have to go through that channel to buy them. A better approach is to look up the owner in the county records and try to buy the property directly from them.
@MikeHartzog thank you very much. I wasn't aware the only way of purchasing the taxes was through a county sale. I thought there was possibly a way around that.
I did find out who the owner is and have sent out a yellow letter. I'm hoping to get a response asap. Thanks again!
@Joe Lopez i know it's a year later, but did you get a response from the yellow letter you sent?
@Armando Cruz no, I sent 3 letters spaced out over 6 weeks. No response.
@Joe Lopez Often in cases like these sending mail is a mute point. Consider that by the distressed nature of the property, the back taxes, etc you can assume that multiple investors are bombarding the seller with mail, and most of that probably goes to the trash.
If you have the owners name, have you searched for them on social media?
If they're too old for SM, try sites like intelius to identify family members, and contact them on SM with your offer to purchase the house.
OR the old fashioned way, ask the neighbors! Our last purchase came after similar circumstances; multiple mailers to the seller with no response, and one day while driving by i saw the neighbor outside and stopped and talked to him, turns out he had been friends with the seller for 40+ years and gave her number right there on the spot! Deal closed a week later.
Our latest idea for houses we KNOW to be abandoned, is to place a bandit sign in the yard with "WE WANT TO BUY THIS HOUSE: If you have contact with the owner please call us XXX-XXXX
@Lloyd Stanton excellent suggestions! Thank you very much!!
Hey @Joe Lopez , you have the owners address, right?? Why not just go knock on his door and ask him if he wants to get some money in his pocket for that old house that nobody lives in before the county sells it and he gets nothing.
Illinois has a two year redemption period at 18% interest. You purchase the tax lien from the county courthouse, or its authorized seller. Joseph Meyers Real Estate Company has agreements with 48 Illinois counties to purchase all liens not sold at their annual auctions. They receive the liens at 18%, take title to all not redeemed, and then hold private real estate auctions throughout the state. Quoted from the 'Wealth Without Risk' tax lien investing book by Saen Higgins. I hope that this helps you find some deals. Good luck in your ventures!
Thank you for the info @Matt Skog !
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