I have a potential wholesale deal. The home is paid for but has a little over $7000 in taxes owed on the property. 3/2 with 2 extra potential rooms in a nice area. The city want to auction off the property if not paid within 2 months. Will this be a good wholesale deal? Need some advice.
It could be a good deal as long as the value of the property is greater than the price tag and the taxes due.
Sounds like you've got a taxlien issue on the property. I've done a handful of these in Florida and I've made out okay on some, not as great on others. My position was as a buyer of the taxlien, then I would foreclose on it. It's expensive to do (my average cost is about $800/ forelclosure) , but the foreclosure action is going to force the actual debtor to either pay the taxes, or I would get the property. Of course I never wanted the property, but when you're paying 10k for a 15k tax lien, and it redeems for 17k, I'd take that over and over. Side-note: Florida has a pretty big secondary taxlien market that moves those liens at a discount to investors - there's money to be made there.
(assuming you're in Florida) Florida has right of redemption, so if it does go to the tax auction and actually gets sold, you (or the owner) can redeem and get the property back by paying the taxes plus the interest - or you can get foreclosed on. I believe there's time limits on the redemption - best bet is for you to speak with a RE attorney in that state that specializes or at least knows how to deal with taxlien foreclosures. Some counties in Florida are as much as 18% interest, so that $7,000 is getting bigger every day.
Kind of got into the weeds on that one - but hopefully this sheds a little light on what can happen with the $7,000 in owed taxes.
Thanks a lot. im going to do a little more research about it to have a clear understanding. I'm in Broward County.
@Lekisha Cole hit me up if you make the deal. Is like to shadow you while you move it. If you don't mind? Good luck!
@Blair Poelman excellent response. Fee like I just got a quick class on that one.
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