Buy Real Estate on Tax Deed Sales
With a bit of knowledge and a bit of prior research, it is quite possible to buy tax lien homes for as little as 10-50 cents on the dollar.
In certain states, tax lien holders can force foreclosure on the lien property. These properties are then auctioned off at tax deed sales. Typically, a savvy investor can acquire properties at these sales at prices much lower than traditional real estate auctions, where prices often exceed 60 cents on the dollar.
These statements are called tax deed statements. In dead state:
* The investor actually acquires title to the property
* There is no interest rate or redemption period since the investor received the property itself.
So what types of properties end up in these sales? Surely they must be run-down places in bad neighborhoods, right?
Mistaken. Certainly, of the many houses with outstanding liens, there will be some undesirable examples in tough parts of town, but there will also be plenty of perfectly nice livable properties that are for sale.
Don’t assume it’s only poor households where people allow their property taxes to lapse and enter foreclosure. You’d be surprised at some of the people and places that end up losing their homes this way and there are many extremely valuable lots being sold at tax deed sales in every state.
My best guess is that most of these people simply miss the payment deadline. I have known of famous and wealthy people who have been repossessed. Often these people have no experience in the financial world and use a financial company to manage their affairs. Perhaps the management company did not receive an invoice or never received one in the first place?
In the case of developers and real estate companies, they will sometimes intentionally delay paying your property taxes so that they become the buyer’s responsibility at closing. They see it as a kind of short-term loan. This tactic can go very wrong if a distracted secretary loses an invoice!
Obviously, the nicer the property, the higher the price it will fetch at auction, but even with a relatively small budget it is possible to buy real estate at tax deed sales.
* All properties (other than Native American Reservations) include property taxes. These pay for local and municipal services such as Police, Fire, Libraries and Roads.
* Tax links can be found on a wide variety of properties. From small houses to luxury houses, condominiums and vacant lots. Commercial lots to warehouses and even entire shopping centers. At any tax deed sale, you’ll find real estate that was once owned by well-known businesses, celebrities, and even federal organizations.
* Link amounts range from $100 to over $1 million.