I'm evaluating some struck off properties in Texas, and one in particular caught my eye. The county is asking $32,000 as the minimum bid; the judgment was in 2010, and the property was struck off the tax roll in the same year. The assessment at the time (as now) is $180,000. The entity which held the property (vacant land, zoned residential) had a warranty deed as of 2010.
I'm wondering what potential pitfalls there might be to buying the property outright? It seems to be a great deal - the redemption period has passed, and I understand most liens will have been removed by the tax sale (still plan on doing a title search as part of the due diligence). With the judgment occurring in the same year as the strike off, I doubt there's significant post-judgment taxes owed.
This seems like a great deal overall, but it makes me wonder why this property was passed over during the auction? I'm new at this so any feedback would be tremendously helpful.
Ask the tax assessor if there are any issues with the title. I have found them to be very helpful and willing
to provide any information about the property they have. If it is in the city limits make sure zoning requirements have not changed. Maybe the land use restrictions have changed for that piece of property. I live in Texas and have bought tax sale properties both current and struck off. It has been my
experience that a property struck off that long ago with that kind of spread between minimum bid and assessment value has some type of major problem. due diligence, due diligence, due diligence
When you buy it you own it no refunds
I understand - just trying to see what can be done to determine the issue? I can check with the city on zoning and any liens/title issues. I understand it seems a little too good to be true, but if there's no zoning issue, no liens and no insurmountable title issues, is there anything else that could possibly spoil the property's value?
@Ryan Pope Depending on the type of property environmentals could also be an issue.
You might try to contact law firm that handles the tax sales for the county that has the property to verify the full price owed including possible interest accruing on struck off amount . During the conversation ask them if they are aware of any problems with the property. In fact you might ask them why the property has been struck off since 2010 and not sold. You could look on the appraisal tax rolls at the properties surrounding this tract and see what the values are for them and compare . It seems the fact the property has not gone up in value since 2010 combined with such a low bid to value just raises red flags. If you have seen the property go look and walk the property , (Watch out for snakes) maybe there is a dump site on the property , old oil or gas wells. I nearly bought an old garbage dump site from the 30's that was not recorded. Had I not walked the property I would have never known. What about easements on the property ? Or even worse no access to the property (land locked) What is the shape of the property? Is it square , rectangular ,pie shaped . Just different thing to check for.
So I took the plunge and sent out a mailer - I focused on delinquent property owners of vacant lots in the County, and sent out 80 focused letters with blind offers. I attached a post-it note to increase response rates as well (“Hope to hear from you soon!”)
My question is, for the offers, I used a formula to ensure my offer + taxes owed totaled 60% of the assessment value. After seeing others’ comments, it sounds like this might be on the generous side? I wanted to err on offering to high rather than too low, to test response rates and ensure responses came in. Would love to hear feedback.
@Ryan Pope May I asked if you hand wrote the mailers?
I did! Well, in a way - I used a template letter, pulling relevant data from Excel via mail merge (owner name, mailing address, property address, offer amount). I then signed each by hand, self-addressed each by hand, and left a handwritten post-it on each.
Ryan how was the response to your letters?
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