Duluth, GA · Member since 2014 · 47 posts · 14 votes
I've been purchasing Alabama Tax deed properties for several months and I am running out of resources. I continue to receive these price quotes from the State of Alabama for approximately $5k - $7k. Good rental property that may require some cosmetics but a good buy and hold property for $5k - $7k. Can I transfer the price quotes to someone else? If so, what is the process.
JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
10y
Make sure you know the redemption rules in Alabama, and don't over-improve. Even with a tax deed, the former owner can still redeem by paying the taxes plus 12% per annum interest. That redemption period runs for three years after the investor takes possession of the property. If the property contains a residential structure, the former must also pay the value of "preservation improvements" made by the investor, but not additions or upgrades. The investor gets to keep any rents collected up until the redemption.
You must also make sure the tax sale was not void. The most likely culprits are death of property owner before tax sale, or sale of property to someone else but failure to assess in the new owner's name. In other words, the wrong person's name was called off at the auction. If the tax sale is void, the former owner (or heirs) can redeem for the taxes plus interest, but do NOT have to pay you for preservation improvements. Also, you will have to disgorge any collected rents.
Duluth, GA · Member since 2014 · 47 posts · 14 votes
9y
I've received 20+ price quotes from the State of Alabama. Pay the taxes get the deed (immediate possession day 1). These quotes are valid til February 9, 2017. Let me know if interested and I will email you a copy of these quotes.
Birmingham, AL · Member since 2016 · 1 post · 0 votes
9y
@Pamela Holmes You seem quite knowledgeable on this subject. I am looking at the Tax Delinquent transcript PDF issued by the state. There is a section that says "amount bid at tax sale." Is this the amount that you actually pay to buy the deed? Or is the price quote a total amount of taxes owed x amount of years not paid+ interest? If that is not the case.. How can I figure out how much the price quote is for without formally submitting an application to buy? I am just starting out and I want to know how much money I need to buy a tax deed. Thank you
JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
9y
@Catrina Kattner it is the total taxes due at time of auction. You must submit a request for quote to find out actual price. You can get close by assuming the taxes remained the same every year, and then doing the arithmetic. That will get you close.
JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
9y
@Jason Gray, @Pamela Holmes, @Ashley G., @Arnie Abramson tax sales trump all liens except local government liens such as nuisance, demolition, sewer, lighting, fire dues and sometimes library dues. Most of the time those charges are rolled into the ad valorem tax bill and are not separate, so not a problem. But, sometimes they are separate. Local government liens can foreclose and take away tax sale property from investor and pay only taxes and interest. They do not have to pay for preservation improvements or insurance premiums or any interest on the overbid. For all other lienholders, including notes and mortgages, judgment, IRS, Alabama Dept of Revenue, Medicaid, etc. they must redeem from the tax sale before they can foreclose and get good title. Redemption includes all same prices taxpayer must pay--taxes, VALUE of preservation improvements and cost of insurance if the property contains a residential structure, VALUE of all newly placed improvements and repairs if the property is in an urban renewal or redevelopment district plus cost of insurance, all at 12% per annum interest. If the tax sale is void (such as taxapayer died before the auction and wrong name called off at auction) then investor gets paid only taxes and nothing else, not even interest.
Alabama has extended redemption rights that result in all properties purchased from the state, even if you get a tax deed, being subject to an additional 3 years of redemption rights. The way to minimize that risk is to make repairs as quickly as possible (but only for properties containing a residential structure) to make redemption too expensive. Or, if they do redeem, you make a large profit and go on to next deal.
It can take many months to get quote from the state. If there are other people in line ahead of you waiting for a quote, it will add about 30 days per person ahead of you.
I am THE tax sale expert in Alabama. If you have questions, send me a PM.
Investor · Birmingham, AL · Member since 2016 · 446 posts · 305 votes
9y
@Denise Evans what if the previous owner pops up/texts/calls about wanting to redeem but never sends written notice? The courthouse told me that a request to redeem must be sent by certified mail. The first time he contacted me was in December. I caught him breaking into my home. I showed him my deed and asked him to leave. He said he wanted it back. I gave him my phone number and told him to get the affidavit from the courthouse to sign and bring it to me along with the $6000. I never heard back from him.
Yesterday, April 26th, he sent me a text message first in broken English asking how much did I spend for the house. Then he called saying that he went to the court house but wanted to know how much I paid to get the house (now if you claim you went to the courthouse you would know this information). At the end of the phone call I told him it would be more than $16k to redeem & I needed to sit down do a calculation on the exact amount. 28 minutes later I texted him my calculation (taxes plus interest + value of repairs plus interest = $20,549.76) and asked for him to provide me with his mailing address so I can send him a formal notice of the cost to redeem by certified mail. He did not respond.
WOW...how were you able to take legal possession in 6 months?
The house was abandoned & vacant. In that scenario you can take legal possession immediately. I take possession within 15 minutes of recording my certificated/deed.
Investor · Birmingham, AL · Member since 2016 · 446 posts · 305 votes
9y
It went up for tax sale in May 2016 (I get May and April confused). No one bid on it so it when to the state. I applied for this house I think around the first of June (I get june & july confused). I didn't get my quote until October so they made be pay 2015 and 2016 taxes.
Monroeville, AL · Member since 2017 · 19 posts · 0 votes
9y
so, I purchased a property today at the tax sale. The property has two homes located on it. One is vacant and the other has tenants. After the five days am I allowed to take possession by changing the locks and making to repairs needed on vacant home and collecting rent on the home with tenants. If so what is the process. If not help me to understand why.
so, I purchased a property today at the tax sale. The property has two homes located on it. One is vacant and the other has tenants. After the five days am I allowed to take possession by changing the locks and making to repairs needed on vacant home and collecting rent on the home with tenants. If so what is the process. If not help me to understand why.
If the home is vacant you change the locks and do repairs on day 1 not day 5.