Tax lien states - how do you bid?

17 Replies

There is about 20 or so tax lien states and another 5 or so that offer both.

I’m fascinated at the different ways the bidding takes place. This is often something that is overlooked or missed when people talk about tax liens and how you bid can play a big part of the process. 

For example in Louisiana we bid down based on % of ownership. If only one person bids on the property they get it for 100%. If multiple people bid, they bid down however they like (90%, 50%, etc) till someone calls out 1%. Who ever says 1% first wins the property. If the property is redeemed the % is irrelevant. 

If your strategy is to make interest on your money and you do not want to acquire property, than you can bid 1% right away. Many hedge funds do this. From the interest they get to make an initial 5% and then 1% a month roi. (First year 17% return). If you bid 1% you want to make sure the property gets redeemed. If you pay the taxes for 3 years and it’s not redeemed you have no one to pay you back what you paid on taxes much less the interest. You can always try to confirm your tax sale and quiet title but you would only be a 1% owner. After legal costs and lawsuits to partition and sell the property (for 1%) it’s not worth it. 

If your strategy is to acquire property then you want to win the property with 100% or as close to that as possible. You are left bidding on properties that are more likely not to be redeemed, the ones not many people want including the hedge funds.  usually vacant land or a run down property. Thankfully some of the few in person tax sales left usually don’t bid down by %. The bidders all raise a number when a property is called out and they randomly call someone. If no one else then screams out a % bid, you get it for 100%. Online auctions, almost all the bids end up at 1%.

In Alabama, they bid down by % or interest you willing to make. It can go all the way down to 0% and everyone who bid 0% goes into a random drawing. If the property is redeemed you just get your money back, you make 0% interest. If you are able to acquire the property you have 100% ownership. Better for people who want to acquire property, you just have to get lucky. 

Wyoming, I believe most if not all are in person. You are given a number. When each property comes up they randomly pull a number. If your number is called you can say yes or no if you want that piece. If you say no they pull another number and so on. The percentage you make from interest and the percentage of ownership you obtain (if not redeemed) is not used in the bidding process. 

Colorado, you pay a premium. This process seems to resemble closer to gambling than investing to me. It is interesting none the less. Each property starts with the amount owed in back taxes. You bid that number up. Who ever bid the highest amount wins. However, if the property is redeemed you only get back the starting amount (taxes owed) and you only make interest on the taxes that were owed. You never get back nor make interest on the additional amount you spent. 

What is the bidding procedure in other tax lien states ? 

SC the auction starts at the taxes and expenses owed. The bidding goes up from there. The interest rate is fixed at 3%, 6%, 9% or 12% depending on what quarter the property is redeemed. The exception to that is the redemption amount is capped at what the defaulting owner owes. So if owner owes 2000 in back taxes the most interest you can make is 2000. If you divide the amount of back taxes owed by 12% you get the max you should pay if you want to max out your interest rate. 

Originally posted by @John Underwood :

SC the auction starts at the taxes and expenses owed. The bidding goes up from there. The interest rate is fixed at 3%, 6%, 9% or 12% depending on what quarter the property is redeemed. The exception to that is the redemption amount is capped at what the defaulting owner owes. So if owner owes 2000 in back taxes the most interest you can make is 2000. If you divide the amount of back taxes owed by 12% you get the max you should pay if you want to max out your interest rate. 

 When you bid over the staring amount, is that a premium and you don’t get that money back, but you make interest on it up to the max amount of interest? 

So if the starting amount is $2,000 and you bid $2,500 and win. If the property is redeemed after one year (you make 12% Interest)....
do you make 12% on the $2,000 or the $2,500? Do you get back just the $2,000 or the $2500 plus the interest? 


Thanks 

Originally posted by @Will Sifert :
Originally posted by @John Underwood:

SC the auction starts at the taxes and expenses owed. The bidding goes up from there. The interest rate is fixed at 3%, 6%, 9% or 12% depending on what quarter the property is redeemed. The exception to that is the redemption amount is capped at what the defaulting owner owes. So if owner owes 2000 in back taxes the most interest you can make is 2000. If you divide the amount of back taxes owed by 12% you get the max you should pay if you want to max out your interest rate. 

 When you bid over the staring amount, is that a premium and you don’t get that money back, but you make interest on it up to the max amount of interest? 

So if the starting amount is $2,000 and you bid $2,500 and win. If the property is redeemed after one year (you make 12% Interest)....
do you make 12% on the $2,000 or the $2,500? Do you get back just the $2,000 or the $2500 plus the interest? 


Thanks 

 No it is not a premium and yes you get that back plus interest. You make interest on you whole bid up to the cap amount I mentioned.

Originally posted by @John Underwood :
Originally posted by @Will Sifert:
Originally posted by @John Underwood:

SC the auction starts at the taxes and expenses owed. The bidding goes up from there. The interest rate is fixed at 3%, 6%, 9% or 12% depending on what quarter the property is redeemed. The exception to that is the redemption amount is capped at what the defaulting owner owes. So if owner owes 2000 in back taxes the most interest you can make is 2000. If you divide the amount of back taxes owed by 12% you get the max you should pay if you want to max out your interest rate. 

 When you bid over the staring amount, is that a premium and you don’t get that money back, but you make interest on it up to the max amount of interest? 

So if the starting amount is $2,000 and you bid $2,500 and win. If the property is redeemed after one year (you make 12% Interest)....
do you make 12% on the $2,000 or the $2,500? Do you get back just the $2,000 or the $2500 plus the interest? 


Thanks 

 No it is not a premium and yes you get that back plus interest. You make interest on you whole bid up to the cap amount I mentioned.

 That is different.  Can you bid over the cap? If not, who ever bids the cap amount first gets it?  What would be the negative of bidding the cap?  


Thanks 

Originally posted by @Will Sifert :
Originally posted by @John Underwood:
Originally posted by @Will Sifert:
Originally posted by @John Underwood:

SC the auction starts at the taxes and expenses owed. The bidding goes up from there. The interest rate is fixed at 3%, 6%, 9% or 12% depending on what quarter the property is redeemed. The exception to that is the redemption amount is capped at what the defaulting owner owes. So if owner owes 2000 in back taxes the most interest you can make is 2000. If you divide the amount of back taxes owed by 12% you get the max you should pay if you want to max out your interest rate. 

 When you bid over the staring amount, is that a premium and you don’t get that money back, but you make interest on it up to the max amount of interest? 

So if the starting amount is $2,000 and you bid $2,500 and win. If the property is redeemed after one year (you make 12% Interest)....
do you make 12% on the $2,000 or the $2,500? Do you get back just the $2,000 or the $2500 plus the interest? 


Thanks 

 No it is not a premium and yes you get that back plus interest. You make interest on you whole bid up to the cap amount I mentioned.

 That is different.  Can you bid over the cap? If not, who ever bids the cap amount first gets it?  What would be the negative of bidding the cap?  

Thanks 

Yes you can bid over the cap with no limit. If you do so you just lower your effective interest rate on your total bid. If I'm using other investors money I try not to go too far below the 12% interest rate, but if I'm using say money in my IRA then I can go as high as I'm willing to pay for the property and not worry about the interest cap.

Originally posted by @John Underwood :
Originally posted by @Will Sifert:
Originally posted by @John Underwood:
Originally posted by @Will Sifert:
Originally posted by @John Underwood:

SC the auction starts at the taxes and expenses owed. The bidding goes up from there. The interest rate is fixed at 3%, 6%, 9% or 12% depending on what quarter the property is redeemed. The exception to that is the redemption amount is capped at what the defaulting owner owes. So if owner owes 2000 in back taxes the most interest you can make is 2000. If you divide the amount of back taxes owed by 12% you get the max you should pay if you want to max out your interest rate. 

 When you bid over the staring amount, is that a premium and you don’t get that money back, but you make interest on it up to the max amount of interest? 

So if the starting amount is $2,000 and you bid $2,500 and win. If the property is redeemed after one year (you make 12% Interest)....
do you make 12% on the $2,000 or the $2,500? Do you get back just the $2,000 or the $2500 plus the interest? 


Thanks 

 No it is not a premium and yes you get that back plus interest. You make interest on you whole bid up to the cap amount I mentioned.

 That is different.  Can you bid over the cap? If not, who ever bids the cap amount first gets it?  What would be the negative of bidding the cap?  

Thanks 

Yes you can bid over the cap with no limit. If you do so you just lower your effective interest rate on your total bid. If I'm using other investors money I try not to go too far below the 12% interest rate, but if I'm using say money in my IRA then I can go as high as I'm willing to pay for the property and not worry about the interest cap.

 So if it’s a property you really want and the starting bid is $1000. You could (if you had to) bid $20,000 to win the property. The most interest you could make would be $1000 and if it was redeemed you would get back your 20,000 plus 1000 interest (21,000 total). 

In this case if it is not redeemed then it cost you $20,000 to get it. 

Originally posted by @Will Sifert :
Originally posted by @John Underwood:
Originally posted by @Will Sifert:
Originally posted by @John Underwood:
Originally posted by @Will Sifert:
Originally posted by @John Underwood:

SC the auction starts at the taxes and expenses owed. The bidding goes up from there. The interest rate is fixed at 3%, 6%, 9% or 12% depending on what quarter the property is redeemed. The exception to that is the redemption amount is capped at what the defaulting owner owes. So if owner owes 2000 in back taxes the most interest you can make is 2000. If you divide the amount of back taxes owed by 12% you get the max you should pay if you want to max out your interest rate. 

 When you bid over the staring amount, is that a premium and you don’t get that money back, but you make interest on it up to the max amount of interest? 

So if the starting amount is $2,000 and you bid $2,500 and win. If the property is redeemed after one year (you make 12% Interest)....
do you make 12% on the $2,000 or the $2,500? Do you get back just the $2,000 or the $2500 plus the interest? 


Thanks 

 No it is not a premium and yes you get that back plus interest. You make interest on you whole bid up to the cap amount I mentioned.

 That is different.  Can you bid over the cap? If not, who ever bids the cap amount first gets it?  What would be the negative of bidding the cap?  

Thanks 

Yes you can bid over the cap with no limit. If you do so you just lower your effective interest rate on your total bid. If I'm using other investors money I try not to go too far below the 12% interest rate, but if I'm using say money in my IRA then I can go as high as I'm willing to pay for the property and not worry about the interest cap.

 So if it’s a property you really want and the starting bid is $1000. You could (if you had to) bid $20,000 to win the property. The most interest you could make would be $1000 and if it was redeemed you would get back your 20,000 plus 1000 interest (21,000 total). 

In this case if it is not redeemed then it cost you $20,000 to get it. 

 Exactly correct. 

Originally posted by @John Underwood:
Originally posted by @Will Sifert:
Originally posted by @John Underwood:
Originally posted by @Will Sifert:
Originally posted by @John Underwood:
Originally posted by @Will Sifert:
Originally posted by @John Underwood:

SC the auction starts at the taxes and expenses owed. The bidding goes up from there. The interest rate is fixed at 3%, 6%, 9% or 12% depending on what quarter the property is redeemed. The exception to that is the redemption amount is capped at what the defaulting owner owes. So if owner owes 2000 in back taxes the most interest you can make is 2000. If you divide the amount of back taxes owed by 12% you get the max you should pay if you want to max out your interest rate. 

 When you bid over the staring amount, is that a premium and you don’t get that money back, but you make interest on it up to the max amount of interest? 

So if the starting amount is $2,000 and you bid $2,500 and win. If the property is redeemed after one year (you make 12% Interest)....
do you make 12% on the $2,000 or the $2,500? Do you get back just the $2,000 or the $2500 plus the interest? 


Thanks 

 No it is not a premium and yes you get that back plus interest. You make interest on you whole bid up to the cap amount I mentioned.

 That is different.  Can you bid over the cap? If not, who ever bids the cap amount first gets it?  What would be the negative of bidding the cap?  

Thanks 

Yes you can bid over the cap with no limit. If you do so you just lower your effective interest rate on your total bid. If I'm using other investors money I try not to go too far below the 12% interest rate, but if I'm using say money in my IRA then I can go as high as I'm willing to pay for the property and not worry about the interest cap.

 So if it’s a property you really want and the starting bid is $1000. You could (if you had to) bid $20,000 to win the property. The most interest you could make would be $1000 and if it was redeemed you would get back your 20,000 plus 1000 interest (21,000 total). 

In this case if it is not redeemed then it cost you $20,000 to get it. 

 Exactly correct. 

 Also in SC there is only a 12 month redemption period. If the property is not redeemed you don't have to do anything. A deed will just show up in your mailbox. 

Originally posted by @John Underwood :
Originally posted by @John Underwood:
Originally posted by @Will Sifert:
Originally posted by @John Underwood:
Originally posted by @Will Sifert:
Originally posted by @John Underwood:
Originally posted by @Will Sifert:
Originally posted by @John Underwood:

SC the auction starts at the taxes and expenses owed. The bidding goes up from there. The interest rate is fixed at 3%, 6%, 9% or 12% depending on what quarter the property is redeemed. The exception to that is the redemption amount is capped at what the defaulting owner owes. So if owner owes 2000 in back taxes the most interest you can make is 2000. If you divide the amount of back taxes owed by 12% you get the max you should pay if you want to max out your interest rate. 

 When you bid over the staring amount, is that a premium and you don’t get that money back, but you make interest on it up to the max amount of interest? 

So if the starting amount is $2,000 and you bid $2,500 and win. If the property is redeemed after one year (you make 12% Interest)....
do you make 12% on the $2,000 or the $2,500? Do you get back just the $2,000 or the $2500 plus the interest? 


Thanks 

 No it is not a premium and yes you get that back plus interest. You make interest on you whole bid up to the cap amount I mentioned.

 That is different.  Can you bid over the cap? If not, who ever bids the cap amount first gets it?  What would be the negative of bidding the cap?  

Thanks 

Yes you can bid over the cap with no limit. If you do so you just lower your effective interest rate on your total bid. If I'm using other investors money I try not to go too far below the 12% interest rate, but if I'm using say money in my IRA then I can go as high as I'm willing to pay for the property and not worry about the interest cap.

 So if it’s a property you really want and the starting bid is $1000. You could (if you had to) bid $20,000 to win the property. The most interest you could make would be $1000 and if it was redeemed you would get back your 20,000 plus 1000 interest (21,000 total). 

In this case if it is not redeemed then it cost you $20,000 to get it. 

 Exactly correct. 

 Also in SC there is only a 12 month redemption period. If the property is not redeemed you don't have to do anything. A deed will just show up in your mailbox. 

 That’s awesome. It’s amazing how every state is so different. I assume if you wanted to get title insurance you would need to do some type of suit to satisfy the title insurance company for them to write a policy or is it pretty much impossible to get title insurance no matter what ? 

So to summarize SC bidding process, you bid up from the starting amount. You can bid as high as you like to win, if redeemed you get all of your money back. You make interest on how much you bid, up to a cap, which the interest cap is the same amount as the starting bid. The amount of interest paid is by quarter, 3,6,9,12%.  One year redemption period. 

Originally posted by @Will Sifert :
Originally posted by @John Underwood:
Originally posted by @John Underwood:
Originally posted by @Will Sifert:
Originally posted by @John Underwood:
Originally posted by @Will Sifert:
Originally posted by @John Underwood:
Originally posted by @Will Sifert:
Originally posted by @John Underwood:

SC the auction starts at the taxes and expenses owed. The bidding goes up from there. The interest rate is fixed at 3%, 6%, 9% or 12% depending on what quarter the property is redeemed. The exception to that is the redemption amount is capped at what the defaulting owner owes. So if owner owes 2000 in back taxes the most interest you can make is 2000. If you divide the amount of back taxes owed by 12% you get the max you should pay if you want to max out your interest rate. 

 When you bid over the staring amount, is that a premium and you don’t get that money back, but you make interest on it up to the max amount of interest? 

So if the starting amount is $2,000 and you bid $2,500 and win. If the property is redeemed after one year (you make 12% Interest)....
do you make 12% on the $2,000 or the $2,500? Do you get back just the $2,000 or the $2500 plus the interest? 


Thanks 

 No it is not a premium and yes you get that back plus interest. You make interest on you whole bid up to the cap amount I mentioned.

 That is different.  Can you bid over the cap? If not, who ever bids the cap amount first gets it?  What would be the negative of bidding the cap?  

Thanks 

Yes you can bid over the cap with no limit. If you do so you just lower your effective interest rate on your total bid. If I'm using other investors money I try not to go too far below the 12% interest rate, but if I'm using say money in my IRA then I can go as high as I'm willing to pay for the property and not worry about the interest cap.

 So if it’s a property you really want and the starting bid is $1000. You could (if you had to) bid $20,000 to win the property. The most interest you could make would be $1000 and if it was redeemed you would get back your 20,000 plus 1000 interest (21,000 total). 

In this case if it is not redeemed then it cost you $20,000 to get it. 

 Exactly correct. 

 Also in SC there is only a 12 month redemption period. If the property is not redeemed you don't have to do anything. A deed will just show up in your mailbox. 

 That’s awesome. It’s amazing how every state is so different. I assume if you wanted to get title insurance you would need to do some type of suit to satisfy the title insurance company for them to write a policy or is it pretty much impossible to get title insurance no matter what ? 

So to summarize SC bidding process, you bid up from the starting amount. You can bid as high as you like to win, if redeemed you get all of your money back. You make interest on how much you bid, up to a cap, which the interest cap is the same amount as the starting bid. The amount of interest paid is by quarter, 3,6,9,12%.  One year redemption period. 

 You got it. 

I don't worry about title insurance. I just rent them forever.

To get legitimate Title insurance that would be accepted by anyone you have to clear up the title. I've done this myself or hired an attorney to do a Quiet Title.

Here's how it works in Indiana.

Indiana is a tax lien state, Big-up auction style, One year redemption period.  The main tax sale auctions are in the fall August-October.  Bidding starts at the property tax amount owed plus auction fee and various standard penalties.  The minimum bid earns 10% flat penalty return, which changes to 15% if redeems after six month mark.  The overbid amount (the amount bid over minimum) earns 5% interest per annum.  In the past bidding would generally go to 50-70% of market value of property, until lately its gone closer to full market value.  If the property redeems you get your money plus the interest from the county, you just turn in your certificate.  If the property does not redeem in one year you can petition for tax deed with the county.  Buyers should be aware, and add into your math for return, there are certain legal notices ($500-1000) that must be sent out during the redemption period and you will only be reimbursed that amount if there is a redemption.  

Besides the main tax lien sales in the fall, there is a secondary certificate sale called a Commissioners sale usually in the Spring.  This is for all items not sold in the main sale, and usually I just see a lot of junk going for crazy prices.  The commissioners sale has a three month redemption period and similar process as the main sale, the idea being those finish up around the same redemption expiration as liens in the main sale (in the fall).  There is also a tax deed sale in some counties, this is a direct ownership sale and usually is the bottom of the barrel properties imo.

There is still opportunity at these auctions but the lists themselves are diminishing in size each year and the bidding has become ridiculous.  Just because you are at an auction does not mean you are getting a deal (typically you are getting a problem to remedy).  

Anything related to Indiana tax sales feel free to ask as I have been attending tax lien sales in Indiana since 2007.

Best,
Joe D

if the tax due is $2000, you over bid say $2500(in bid war)...so you will get back $2000+ interest on $2000 if redeemed.

Property owner doesn't care how much over bid you did, he will get his property back by paying due tax ($2000) and interest.

Originally posted by @John Underwood :
Originally posted by @Will Sifert:
Originally posted by @John Underwood:
Originally posted by @John Underwood:
Originally posted by @Will Sifert:
Originally posted by @John Underwood:
Originally posted by @Will Sifert:
Originally posted by @John Underwood:
Originally posted by @Will Sifert:
Originally posted by @John Underwood:

SC the auction starts at the taxes and expenses owed. The bidding goes up from there. The interest rate is fixed at 3%, 6%, 9% or 12% depending on what quarter the property is redeemed. The exception to that is the redemption amount is capped at what the defaulting owner owes. So if owner owes 2000 in back taxes the most interest you can make is 2000. If you divide the amount of back taxes owed by 12% you get the max you should pay if you want to max out your interest rate. 

 When you bid over the staring amount, is that a premium and you don’t get that money back, but you make interest on it up to the max amount of interest? 

So if the starting amount is $2,000 and you bid $2,500 and win. If the property is redeemed after one year (you make 12% Interest)....
do you make 12% on the $2,000 or the $2,500? Do you get back just the $2,000 or the $2500 plus the interest? 


Thanks 

 No it is not a premium and yes you get that back plus interest. You make interest on you whole bid up to the cap amount I mentioned.

 That is different.  Can you bid over the cap? If not, who ever bids the cap amount first gets it?  What would be the negative of bidding the cap?  

Thanks 

Yes you can bid over the cap with no limit. If you do so you just lower your effective interest rate on your total bid. If I'm using other investors money I try not to go too far below the 12% interest rate, but if I'm using say money in my IRA then I can go as high as I'm willing to pay for the property and not worry about the interest cap.

 So if it’s a property you really want and the starting bid is $1000. You could (if you had to) bid $20,000 to win the property. The most interest you could make would be $1000 and if it was redeemed you would get back your 20,000 plus 1000 interest (21,000 total). 

In this case if it is not redeemed then it cost you $20,000 to get it. 

 Exactly correct. 

 Also in SC there is only a 12 month redemption period. If the property is not redeemed you don't have to do anything. A deed will just show up in your mailbox. 

 That’s awesome. It’s amazing how every state is so different. I assume if you wanted to get title insurance you would need to do some type of suit to satisfy the title insurance company for them to write a policy or is it pretty much impossible to get title insurance no matter what ? 

So to summarize SC bidding process, you bid up from the starting amount. You can bid as high as you like to win, if redeemed you get all of your money back. You make interest on how much you bid, up to a cap, which the interest cap is the same amount as the starting bid. The amount of interest paid is by quarter, 3,6,9,12%.  One year redemption period. 

 You got it. 

I don't worry about title insurance. I just rent them forever.

To get legitimate Title insurance that would be accepted by anyone you have to clear up the title. I've done this myself or hired an attorney to do a Quiet Title.

Here in Louisiana we have good faith  acquisitive prescription after 10 years (30 years bad faith). Being acquired through tax sale would be good faith. I've haven't had the opportunity to try this, but after speaking with a few title insurance companies it could be an option as well. I know the time period for acquisitive prescription varies from state to state though.

 

An investor who has already has an abundance of properties, a lot of time and doesn't care whether he wins or loses a little may want to dabble with tax lien sales and tax auctions. At every tax auction I went to in California the properties were going for far higher prices than what good quality properties were selling for. The fact that you can't inspect the properties prior to purchasing and the redemption period makes the business risky and time-consuming.

There is an abundance of serious fools who bid on tax lien properties. Many of them listed before an auction show pictures of beautiful homes and when we drive to view the property there is often only a concrete floor and no house. It is really difficult to believe that investors bid on these houses when they don't even exist.

I purchased more than 28 homes at auction.com between 2008, 2010, got homes for 30 cents on the dollar and never had one problem. Every home was move-in ready. Stay away from every online auction because you can get burned seriously. Look up the pros and cons of online auctions before you get into serious problems.

We knocked on doors and tried to buy properties a few days before tax auctions and the property owners laughed at us because they knew they were going to get more money for the house than if they sold it the conventional way and they didn't have to show the house or make any repairs. Just two years ago, we met such a homeowner in San Bernardino California. We estimated the house was worth about $180k in its horrible condition with no guarantees and the house sold at the auction for $260k. I think the major problem for the homeowner who lost his house to the auction is it takes about 1 year for him to get the overage back, or whatever you call it.

I still go to auction.com's live auctions and to auctions on the courthouse steps (so-to-speak). I find the most-profitable homes to purchase is when the price you pay at the auction is a little more than $1 million and the properties need only a small amount of rehabbing and they sell for $1.8 to $2 million. We walk away with no less than $500k to $600k after all expenses and then deduct income taxes. When we purchase properties in the $600k to less than $1 million we usually end up with a profit of about $50k to $100k. I think the reason for the difference in profit is because when a property sells at the auctions for more than $1 million I am often the only bidder left at that price and sometimes there is only 1 other bidder hanging in, but I never can figure out why the other bidders give up so early when there is a huge profit waiting to be grabbed up.

The truth! I haven't seen one property worth bidding since the COVID started in March 2020. It looks like the courts are giving the homeowners losing their properties many more opportunities to get their properties cancelled from the auction.

Originally posted by @Jack Orthman :

An investor who has already has an abundance of properties, a lot of time and doesn't care whether he wins or loses a little may want to dabble with tax lien sales and tax auctions. At every tax auction I went to in California the properties were going for far higher prices than what good quality properties were selling for. The fact that you can't inspect the properties prior to purchasing and the redemption period makes the business risky and time-consuming.

There is an abundance of serious fools who bid on tax lien properties. Many of them listed before an auction show pictures of beautiful homes and when we drive to view the property there is often only a concrete floor and no house. It is really difficult to believe that investors bid on these houses when they don't even exist.

I purchased more than 28 homes at auction.com between 2008, 2010, got homes for 30 cents on the dollar and never had one problem. Every home was move-in ready. Stay away from every online auction because you can get burned seriously. Look up the pros and cons of online auctions before you get into serious problems.

We knocked on doors and tried to buy properties a few days before tax auctions and the property owners laughed at us because they knew they were going to get more money for the house than if they sold it the conventional way and they didn't have to show the house or make any repairs. Just two years ago, we met such a homeowner in San Bernardino California. We estimated the house was worth about $180k in its horrible condition with no guarantees and the house sold at the auction for $260k. I think the major problem for the homeowner who lost his house to the auction is it takes about 1 year for him to get the overage back, or whatever you call it.

I still go to auction.com's live auctions and to auctions on the courthouse steps (so-to-speak). I find the most-profitable homes to purchase is when the price you pay at the auction is a little more than $1 million and the properties need only a small amount of rehabbing and they sell for $1.8 to $2 million. We walk away with no less than $500k to $600k after all expenses and then deduct income taxes. When we purchase properties in the $600k to less than $1 million we usually end up with a profit of about $50k to $100k. I think the reason for the difference in profit is because when a property sells at the auctions for more than $1 million I am often the only bidder left at that price and sometimes there is only 1 other bidder hanging in, but I never can figure out why the other bidders give up so early when there is a huge profit waiting to be grabbed up.

The truth! I haven't seen one property worth bidding since the COVID started in March 2020. It looks like the courts are giving the homeowners losing their properties many more opportunities to get their properties cancelled from the auction.

 California is a tax deed state, not a tax lien state.  There is a huge difference between buying tax liens and tax deeds and every state is very different.