Category: County Tax Sale

County Tax Sales – How to Get Tax Sale Properties Instantly

County Tax Sales – A New and BETTER Way

The usual method of getting property from county tax sales is to participate in a tax deed auction or a tax lien auction.

Here’s how to get tax sale properties instantly as a result of the county tax sale without waiting or bidding.

First, determine if your area is a tax deed state or a tax lien state. In most tax deed states, properties are sold outright at the tax sale. In most tax lien states, the property itself is not sold, but rather a first-priority lien against the property is sold at the county tax sale.

After waiting a certain amount of time, called the redemption period, this lien can be foreclosed to get title to the property if it’s not paid off by the owner.

Just call the local office that holds the county tax sale in your county, and ask whether they hold a tax deed or tax lien sale. If it’s a tax deed sale, confirm that the property is being sold outright with no redemption period. If it’s a tax lien sale, or redeemable deed sale, ask how long the redemption period is.

If the county tax sales in your state are in a tax deed format, where immediate title to the property is auctioned, simply obtain the next tax deed sale list as soon as it comes out. If your local county isn’t having a tax deed sale soon, inquire at other counties throughout the state to find an upcoming sale.

Then, just contact the owners who are about to lose their property to the tax deed sale. You’ll find that many of them are just “letting the property go” and that you can pick it up for no more than a token payment and quickly flip it.
County tax sales can be prevented
For tax lien states, you’ll take the redemption period (say 2 years), and look up the results of the county tax lien sale held a little less than 2 years ago. You’ll see which liens were sold, and which liens have since paid off. You’ll take the unpaid liens, knowing that these owners’ redemption period is just about over, and approach the owners the same way.

County tax sales that offer tax liens are arguably the best to work this method because they take a little bit of research – you may have to actually build your own list – and you’re almost assured of having little or no competition. Even with tax deed lists that are published everywhere, you’ll usually have minimal to no competition.

Once you contact an owner and strike up a deal, you can move forward in a couple different ways. If the owner is just walking away, I like to simply offer a small amount of cash for their time to sign over the deed. They’re letting the property go anyway, so don’t try to assign a big value to the property – it may indeed be worth little to nothing.

Just pay $50 or so for them to sign over the deed and see what you get.

If the seller wants a lot more cash than this, or you’re really uncertain whether the property has value, just sign a contract with the seller and assign the contract to another investor for a small profit. If you’re unable to assign the contract, you’re not out any money.

To use the assignment technique, it’s important to have a buyer list already established ahead of time. A great way to start building this list is to include bidders from past county tax sales. You can usually get these lists of bidders because most county tax sales require all bidders to register and these records are kept indefinitely.

County Tax Liens: A Good Way to Acquire Cheap Property?

County tax liens help counties recover taxes

County Tax Liens for Acquiring Property?

One of the greatest misconceptions in the real estate investing world is that county tax liens lead to cheap property acquisition. All on an ongoing basis, for pennies on the dollar.

Examples are given on late night TV and other sources of properties worth $30,000 – $200,000, being obtained for as little as a few hundred dollars over and over again. Nothing could be further from the truth.

In the real world, county tax liens on property provide an above-average return on investment. It looks especially good versus traditional guaranteed investments like bank accounts and CD’s. But this is when the investment in the county tax lien is properly managed.

Tax lien gurus often cite that county tax lien investments are “guaranteed by the government”. This is also false. County tax liens are guaranteed by the underlying property only. And only if the tax lien buyer follows proper procedure throughout the process.

In exceedingly rare cases, a county tax lien may go to maturity and lead to acquisition of the underlying property. And in these cases, the underlying property CAN BE worth many times the investment in the lien.

However, the underlying property may actually be worthless, or worth little more than the investment made in the lien itself and subsequent costs.

In order to obtain the underlying property if the taxes are not paid, strict procedures must be followed by the lien buyer.

Therefore, county tax liens are not a passive investment at all. Significant time must be spent prior to the investment, performing due diligence.

Due diligence consists mostly of making sure that any county tax liens purchased are against properties worth at least as much as the investment in the lien and subsequent costs.

Many tax lien lists consists of thousands of properties, all of which must be analyzed prior to the sale.

Because several bidders may want the same group of county tax liens at the sale, there is usually a bidding method at the sale. Either the cost of the lien is bid up, or the interest rate is bid down.

In either case, the investment becomes less attractive as the bidding continues. Not all liens you may desire to purchase will be available for the minimum bid or maximum interest rate.

County tax liens are really only worth getting involved in if you have a large sum (well in excess of 6 figures) to invest. You must also be willing to take an active role in the management of the investment.

An investment of less than 6 figures provides only several percentage points’ difference over a federally guaranteed investment. Therefore only a few thousand dollars difference in return is realized. The added risk and due diligence needed to participate in any kind of tax sale is not worth the extra return.

For larger investments, especially in the millions of dollars, it’s more efficient to do the research and the effort can be worth the while.

At every large sale, it’s inevitable that several properties, or even several dozen properties, will be lost by the owners as a result of the sale.

However, to have a chance at acquiring all of these properties by buying tax liens, you would have to buy every single county tax lien offered at the sale.

In order to actually acquire properties for pennies on the dollar, just stay out of the sale and let all of the other investors buy the liens offered.

Let them do the due diligence and determine which liens are worth investing in (many times 50% or more of the county tax liens offered at a sale don’t even sell).

Then, once the redemption period is about to expire, see which liens are still unpaid. Simply approach any property owner with a lien remaining with a last-minute proposal to buy the property or get it under contract before it is lost.

You’ll save 95% of the due diligence time, and you won’t have to invest any money. You won’t have to follow procedures like noticing. You won’t have to get a quiet title on the property.

You can just get involved at the last minute, and buy unwanted properties for a token amount or get them under contract and flip.

Profit from county tax liens like the pros – get my “Underground Tax Sale Secrets” guide now (below).

County Tax Sale Bungled by Local Officials

County Tax Sale Bungled by Local Official

Local Officials Mess Up the County Tax Sale

You’d think that if your only job was to run the county tax sale each year, or several times a year, you’d be able to pull it off without making any major mistakes.

Sure, with thousands of properties going through the county tax sale, there are bound to be little technical mistakes here and there. Let’s look at some unbelievably big mistakes that have been made lately.

As usual, when it comes to government incompetance and inefficiency of any type, Lake County, Indiana is a great place to start your search.

Lake County officials sold over $1.3 million dollars in tax liens at their most recent county tax sale in June 2010 and had to REFUND THE ENTIRE AMOUNT! Why?

Some arcane county tax sale rule?

Not really. According to the Northwest Indiana Times, the county had to “pay those holding worthless tax sale certificates the amount they bid with interest and legal fees incurred…”, because “state law requires the county to advertise notice of a tax sale in two local newspapers. However, ads were published in only one.”

So not only did the county have to refund the entire tax sale, but they had to provide interest and legal fee reimbursement to everyone who bid at that sale.

Legal fees often run higher that the amount of the tax certificate at this type of sale, by the way!

In addition to county officials frequently bungling the county tax sale process, tax sale buyers also often have obligations which are not met properly. This leads to a potential to void their particular purchase(s) from the county tax sale.

The reason I bring up this phenomenon is that a major part of my strategy is to buy properties from tax delinquent owners just prior to the final deadline to pay taxes. This deadline is typically a tax deed sale or the end of the redemption period after a county tax sale.

By realizing that proper noticing has to be done by the county and often the tax sale buyer, I have sometimes audited this noticing and been able to void tax sales against properties I’ve bought.

Look for smaller, first time tax sale buyers (you can review past bidder lists and see who the new kids on the block are), and go through the noticing they submit to the court.

If you can find deficiencies, contact the owners of these properties and offer to pay a small amount for the property and then overturn the sale. Alternatively, “partner up” with these owners and participate in half the eventual sales price of the property if you can overturn the sale.

The county tax sale is filled with hidden opportunities, and you can get acquaited with all of them when you get my report “Underground Tax Sale Strategies” – do it now by putting your email address in form below!