Rental Property Investor · Simcoe, Ontario · Member since 2015 · 17 posts · 18 votes
Does anybody have any experience or knowledge buying tax sale properties in Ontario? The system seems like it is set up as silent auction. All prospective buyers submit their bids in private and once the auction is closed the bids are opened and the high bidder wins. The catch is you basically need to have 20% of your bid submitted in cash (certified check).
This seems like it could potentially tie up a fair bit of capital and would make it difficult to bid on multiple properties simultaneously.
Has anyone been through this process successfully and was it a good investment. Any stories/advise is much appreciated.
I have bid on several properties but have never been successful. Your understanding is correct that it is certified check or money order for 20% of your bid amount. The bid amount has to exceed the minimum bid which is what is owing on the property plus lawyers fees. If there are any outstanding loans from the federal government they will have to be paid prior to ownership. Ontariotaxsales.ca has the background information and the leans against it and will share for a price.
The successful bidders of the few I attended were one of two types. The first was serious people that must do this for a living as they put a bid on everything and had hundreds of thousands tied up in certified checks. The second was neighbors buying it for near market price. There was only one property I kicked myself for since i still think I could have made good money on but the person that bought it put it back up for sale and is still sitting on the property two years later.
If you have or have access to capital I would say go for it but if you can't pay whatever your bid is in cash I don't think you would be able to be successful. The two weeks to come up with the cash after a successful bid I don't think is enough time to get bank financing.
Real Estate Agent · Kitchener-Waterloo-Cambridge, Ontario · Member since 2013 · 408 posts · 90 votes
10y
Be wary of Canadian tax sales our systems here our designed to protect the average consumer so the deals are never really meant to be had to begin with. Also check the type of sale, most sales do not have to accept the highest price unless they want to. Your best way to find a deal would be through a realtor buying some under valued properties in your neighbourhood and then just re selling them after small renovations
Rental Property Investor · Simcoe, Ontario · Member since 2015 · 17 posts · 18 votes
10y
Thank you for your input Samuel and Tom. As I read further into Canadian Tax Sales I felt some uncertainty and both you have confirmed it. I am going to continue to look into the idea but proceed with great caution.
Investor · Toronto, Ontario · Member since 2014 · 148 posts · 34 votes
10y
Had a friend buy one in Niagara Region.
$66K walked into what he thought was GOLD.
It was a duplex that had wires exposed, was beside a bar that had 2 stabbing deaths in 2 years and was a duplex ...... with a HOLE cut in the drywall to accommodate the family of 8 into both sides of the unit. Swear on my life.
Foreclosure Specialist · Toronto, Ontario · Member since 2015 · 10 posts · 2 votes
10y
Ontario tax sales are NOT for average person unless otherwise you know Municipal Act 2001. Canadian real estate investors can pick up properties pennies on a dollar provide you have proper training from Canadian real estate expert.