Hello, I am in Atlanta and am interested in investing in Tax Deeds. I have read one book on the subject and even though I have much more to learn I think I am ready to buy a small deed for learning purposes. I had a couple of questions:
1. How much do I need to buy a tax deed if I go to a county a little further out in the country where I am assuming the property values are lower? I would like buy a couple of liens, hopefully around $500 or so each. Is this possible and would they mostly have to be raw land for that amount?
2. If I decide to keep doing this what would be the best way to get funding? Are there loans for tax lien investing that would be secured by the value of the lien, and what kind of loan would be most appropriate?
Thanks in advance.
1. It completely depends on the property.
2. I don't think you will be able to get a loan for tax deed investing. It will have to be cash.
I recommend that you go to several tax auctions and get familiar with what kind of properties are available and what people are bidding for them. That will answer a lot of your questions. Ultimately, it still depends on the value of the underlying asset. Just because you can get it for pennies on the dollar doesn't mean that it's worth more than pennies on the dollar.
@Benjamin Barry with that kind of budget you might want to think about buying a lot or raw land. There is a resource on Seth Williams site and he has a lot of great information there. With land the prices are cheaper and so is the competition to grab a parcel. Seth is also on BP. Another great resource you might want to look at is the Tax lien lady - Joanne Musa. you can youtube her information and learn a lot about investing remotely. Who says you have to physically goto an auction? Best of luck.
Hey @Benjamin Barry I would recommend going to a couple of the auctions. You will have to purchase everything in cash. That being said, you can borrow against a line of credit (e.g. HELOC) and then use those proceeds to purchase it but you would still likely incur some costs when doing that.
Another thing to note is that in Georgia, you don't actually get possession of the property right away. The owners have up to 12 months to pay the taxes (plus a 20% return to the tax deed purchaser e.g. you) and get their property back. You can read about some of the stipulations here.
You might be searching for quite awhile with that budget. Usually a county is not going to do a tax sale for that little amount although I have seen it for only $1000 or near that in Athens even. The idea of buying developed lots could actually work if the former builders stop paying taxes. Lot taxes woudl be lower, but most of those have all been scooped up. I am not telling you to stop looking, but try and get on the list of every tax commssioner sale advertisement in every county possible and you will likely find a deal. You can also check www.georgiapublicnotice.com for the advertisements ahead of time.
Thanks for the responses. That georgiapublicnotice site is useful for finding all the sales. Does anyone else have any ideas for financing these other than my own cash? It seems like a lender would be willing to finance in theory since there would be something of value behind the loan.
Georgia is a redemption deed state so you are paying for the deed but it acts like a lien with a redemption. The redemption period is 1 year and you can actually allow the property owner more time if you want to by adding an additional year prior to foreclosing on the property and gaining an additional 10% interest. The interest is a penalty and it is 20% so whether it gets paid on the first day or the last day before the year is up it is still 20%. Because of that it is more likely to be at the end of the year than at the first. Most people won't want to lose their property but if they are delinquent enough to take it to the sale then there is a reason. The sales are the first Tuesday of every month providing they are having one and you can usually get the listing on the third Friday the month prior to. There are some stipulations for notifications but they are able to follow and complete in order to get yourself a less expensive property. Redeemable deed states are a good way to get your foot in the door to real estate and property ownership.
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