Wholesaler · Houston, TX · Member since 2012 · 42 posts · 2 votes
Curious:
Can one wholesale a property that is tax delinquent? Good idea? Bad idea? How to do it? What to look for? Can someone direct me to some info about these types of deals?
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
14y
This was just asked last week
Yes you can wholesale a home with delinquent taxes. The taxes simply get paid off at settlement.
Most contracts will say the home is being sold free and clear of all liens. This means that the taxes will be paid out of the sellers proceeds. Another option is to offer the owner a NET price and you pay the taxes on your side.
One caveat is if the property is in an active tax foreclosure, time may be short.
I do deals like this all the time. If fact I seem to specialize in the tough deals. If anyone has a complicated deal in Maryland let me know. I may be able to help.
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
14y
This was just asked last week
Yes you can wholesale a home with delinquent taxes. The taxes simply get paid off at settlement.
Most contracts will say the home is being sold free and clear of all liens. This means that the taxes will be paid out of the sellers proceeds. Another option is to offer the owner a NET price and you pay the taxes on your side.
One caveat is if the property is in an active tax foreclosure, time may be short.
I do deals like this all the time. If fact I seem to specialize in the tough deals. If anyone has a complicated deal in Maryland let me know. I may be able to help.
Wholesaler · Salt Lake City, UT · Member since 2009 · 1k+ posts · 401 votes
14y
Just think of the unpaid taxes as a cheap source of financing. Many properties I took over in my area I just lowered the sales price accordingly and paid them at my my own pace, unless of course there was little time left before the county scheduled a sale. it is not a tax certificate state.
Wholesaler · Salt Lake City, UT · Member since 2009 · 1k+ posts · 401 votes
14y
Ned
I guess it is a state thing. Where I invest the deed is recorded just the same as if a loan is taken sub2. The state doesn't care about a new owner, they will take the property no matter who owns it or when they got it. If you don't pay the taxes you don't keep the property, doesn't matter what name is on the deed.
Are you just referring to lender requirements due to a new loan being placed, or are you telling me a lender foreclosing can't record a trustee sale deed unless he pays the taxes first. Somethings not right, that would be a first in my experience. i can see a lender not funding until taxes are paid, but a county not allowing a simple transfer of ownership? After all the property is the security, it is not the owner, the owner is not chased for property tax purposes which is one reason they are a superior lien.
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
14y
Ned Carey Do you mean you can't get title insurance without paying off property taxes? In CA, property taxes don't need to be current in order to record a deed or lien. Property taxes attach to the property and are superior, but the tax collector and the recorder don't have any arrangement to force tax collection upon transfer.
How does that work in MD when you go to record a deed? Does the recorder look up the taxes and say come back after you paid? Something doesn't sound right about that.
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
14y
K. Marie Poe, and Brian P, Wow I am quite surprised that you can record a deed without paying the taxes. This cannot be done in MD. Part of the settlement process is a "Lien Sheet" needs to be ordered. This "Lien Sheet" lists only municipal tax liens. They must be cleared to record the title.
It seems to me that transfer of the property is a great time to collect taxes. The taxing authority has leverage if the deed can't be recorded and usually there is enough money from the transaction to pay the taxes.