Category: Tax Sale News

Indiana Commissioners Sales – Part 3b

Indiana Commissioners Tax Sales

Indiana Commissioners Sales Strategies (Continued)

What should we buy at Indiana Commissioners sales, and where do we find it? We answered that in Indiana Commissioners sales Part 3 – be sure to take a look at that if you haven’t seen it yet.

We’re looking for single family homes in at least fair condition, that are currently occupied. We don’t care too much about the neighborhood as long as the subject property itself meets our standards. There are dozens of cities in Indiana where these properties are plentiful on the Indiana Commissioners sale list each year.

Now how do we minimize risks, and what do we actually have to DO to make our investment safe? That’s what today’s installment will cover.

Due Diligence

In most cases you’re going to want to come to town for at least a day or two to investigate the properties on the Indiana Commissioners sales list. However, there are a few strategies that greatly reduce (or can even eliminate) this need.

1. Online Investigation – While you cannot really confirm that a property is “good” from home, you definitely can confirm that a property is “bad” and eliminate it from your list.

In fact, 90-95% of the properties on a typical Indiana Commissioners sales list should not be purchased. This is because they have no practical use, are in terrible condition, or are otherwise worthless.

Unless you have a well thought-out strategy involving land, eliminate it right at the beginning – especially in the areas we’re looking for houses. A notable exception is land with a billboard, cell tower, or other similar improvement – but these can be hard to detect and confirm.

Don't buy an  indiana commissioners sale property like this

No need to do any more research on a property like this - move on.

Try to find a county website that has assessed values, square footages, and/or actual pictures of the properties. You should be able to eliminate a lot of properties that are obviously unsuitable. Look for houses that are too small (less than 750 square feet), assessed for very little, or such bad condition you can see it in the photograph.

2. Send Postcards – You can reduce the size of your “short list” further by sending an inexpensive postcard to each property left on your Indiana Commissioners sales list before coming to town.

You can either put a “we buy houses” message on the postcard (see my post, “Tax Lien Auctions: How to Get 500% More Properties”) or you can even send a blank postcard.

All you’re trying to do is see if the postcard comes back undeliverable, and if so, you should consider eliminating that property from consideration.

The Postcard Technique
Notice that our strategy is completely opposite from regular tax lien sales when we work Indiana Commissioners sales. We want OCCUPIED properties with the commissioners sale because it makes property condition more likely to be good, which is our main unknown. We are not so concerned with the chances of the property redeeming, because the owner would probably have to pay more than the property’s value at this point to redeem.

Contrast this with regular tax lien sales, where there are plenty of good properties but almost 100% of them redeem. There our biggest issue is that the redemption rate is so high, and the property condition is less a problem. So there, we look for VACANT properties because that increases the chance the owner won’t get notices about the tax sale and won’t redeem.

Indiana Commissioner sale home

We purchased the lien on this home for $3093 - and immediately had Section 8 start sending us the checks once we acquired it.

One last thing to check for the remaining properties, is that the actual parcel number listed in the Indiana Commissioners sale list contains the house you want to acquire. See if the county has GIS online, and if so, check each parcel number to make sure the house actually sits on the parcel. Don’t buy any liens on parcels that only contain part of a house.

At this point, it makes sense to take the 1-2% of parcels remaining and a GPS unit, and go drive by each property. Remember, you’re looking for occupied properties in an nice of shape as possible.

An Advanced Strategy For Indiana Commissioners Sales – The “Portfolio Approach”

There is another way to approach these sales, especially if you live out of state. You will still perform the preliminary step of eliminating land and other obviously unsuitable properties. You should even send postcards as mentioned above so you can get down to a good “hot list”.

However you will not necessarily have to spend a lot of time examining properties in person or traveling around if you want to participate in several online sales. We’ll cover that in the final installment of Indiana Commissioners sales – Part 4. We’ll also discuss why RIGHT NOW is the perfect time to get involved in Indiana Commissioners sales.

Tax Deed Sale Bidders (Money Wasters!)

Tax Deed Sale Bidders Kill Each Others Profits

Ha, Ha, I Wasted More Money than You!

Will These Tax Deed Sale Bidders Kill Each Others’ Profit?

At least these tax deed sale bidders can laugh about it!

Apparently, Don Hecht and Jim Dietz of North Dakota have run into each other before at tax deed sales, and helped each other pay more for properties at the sale.

In a recent article in the Grand Forks Herald, several bargain properties were bid up to several times their original starting bid.

A property starting at $6,070 was bid up to $24,000. A house in Manvel, ND started at an amazingly low $1329 and ended up at $8,000.

Another notable property in the sale was a 160-acre tillable farm that sold for $65,000. All to tax deed sale bidders who paid something approaching retail price for these properties.

I think it’s safe to say that if we had gotten in front of any of the former owners of these properties, we would have had a great chance at a decent payday. And this is in North Dakota!

The article went on to mention that the length of time of tax delinquency before tax sale in North Dakota has recently been reduced from 5 years to 3 years, and all properties on this sale were only 3 years delinquent.

In my article “Tax Deed Sales – A Way to Get Good Property?”, I describe the main disadvantage of tax deed sales – competitive bidding. This bidding almost always turns great buys into mediocre or even terrible buys.

This is all thanks to multiple tax deed sale bidders. But bidding at tax deed sales can be very good for us. Tax deed sale bidders creates “overbids” that are often due to the owner who lost the property, when they compete for properties.

We make a very good living locating and collecting those surplus funds for the owners who lost their properties. Most don’t know about the money and wouldn’t have the first clue how to collect it.

Did you think that Tax Deed Sales Create An Unexpected Profit Source, for tax sale bidders? Nope, it creates an opportunity for you.

Unfortunately, North Dakota doesn’t want to share and they do not let the owner get his surplus.

The county forecloses tax delinquent properties completely, without public bid, THEN auctions them off once the county is the owner!

Now why didn’t I think of that?

Get out in front of tax deed sale bidders to buy properties, then collect their overbids in many states. Learn more in 9 minutes than most tax deed sale bidders know, with my “Underground Tax Sale Secrets” report, below.

Tax Deed Sales – A Way to Get Cheap Property? Not Usually

Tax Deed Sales and Cheap Property

Are tax deed sales an effective way to acquire property for bargain prices? The short answer is: hardly ever. Let’s look at a few reasons why purchasing property at tax deed sales can be problematic.

The first obstacle you’ll encounter is that you will have to research each and every property on the tax sale list. In many areas, hundreds or even thousands of properties can be listed on a county’s tax sale list. When there are this many properties listed, it becomes a huge expenditure of time to drive to each property (if you can even find some of them without an address) and assess a value you’d be willing to pay for each one.

Tax Deed Sales - Bidding Ruins the Fun

Bidding Kills Bargains At Most Tax Deed Sales

Also with a large list, there will be mostly garbage properties available that will not even be worth the taxes owed. It’s easy to confuse an adjacent lot, next to a valuable property, with the property you’re looking to bid on, and make a bad purchase.

Now that you’ve spent hours researching the properties, you’ll have to have cash available to purchase the property at the sale. Don’t think that the amount listed in the list is necessarily what you will be able to purchase the property for – – this is just the minimum bid.

At the sale, you’ll be joined at most tax deed sales by several other bidders with deep pockets. They’ll almost always bid the property out of the bargain range and closer to retail value.

The last significant item is that most properties purchased at tax deed sales do not have marketable title at the time you buy them. Though any mortgages or liens are usually wiped out by the tax sale process, title companies want an additional step performed, called a quiet title, which can take 3-4 months and cost an additional $500-$2000 to perform. Many times during the quiet title process, interested parties who were not sufficiently noticed about the sale will come forward and attempt to overturn your deed. This is the whole reason the title companies want the quiet title done successfully – – they have been burned too many times by insuring tax deeds bought at auction.

The only way you will succeed at tax deed sales in buying a cheap property, is if you manage to attend an auction where nobody shows up, or everybody who does show up misses a valuable property on the list and does not bid.

These experiences will be few and far between, and you’ll have to research all tax deed sales in the meantime to be prepared in the event you get lucky.

However, tax deed sales do present a great investing opportunity. You can simply contact the owners of property going to tax deed sales and buy the property directly from them. Much of the time, the reason the property is going to tax deed sale is because the owner doesn’t want it. In these circumstances you can offer the owner as little as $50 for the deed to the property and pay the amount owed in taxes, with no quiet title or bidding necessary.

Tax Sale Properties With No Bidding, Waiting, or Auctions

Tax Sale Properties the SMART Way

Tax Sale Properties A Different Way

At some point, almost all real estate investors look into acquiring tax sale properties as a way to expand their business or branch into a new area of real estate.

There is a lot of misinformation which leads investors to believe that tax sale properties are readily available for pennies on the dollar, free and clear.

Unfortunately, this is simply not true.

The shame is that after attending a few auctions or buying a few liens, most investors are disgruntled to find that they are not acquiring properties with the ease they had expected. Or they’re paying much more than they expected.

Here’s what they often find:

-Tax sale properties are offered with a competitive bidding system, and the prices are bid to near market value. Good tax sale properties sell for much, much more than the minimum bid and far from “pennies on the dollar”.

-They cannot inspect tax sale properties, as they are usually still property of the owner until the sale takes place (and sometimes even after)

-Tax liens take months and months, or even years, to lead to a property acquisition. Most tax liens pay off, leaving the investor with a relatively small amount of interest compared to the effort he put into participating in the sale.

-Tax liens require attorneys at several different stages, which adds a significant expense to the equation.

So, attending a public sale to get tax sale properties is not the way to go.

It turns out however, that with a small shift in your thinking, you’ll see that there is actually an unending source of tax sale properties that are free and clear. These too are available for pennies on the dollar, and require no legal work. Go straight to the source: the owner who is about to lose the property.

Get an upcoming tax deed sale list, or request a list of liens that were sold in the past and are nearing their redemption period. Then you can contact those owners who are right on the cusp of losing their property.

You’ll find that many of these owners have inherited the property, or simply don’t want it. That’s why they haven’t paid the taxes.

You’ll also find that most of these properties are free and clear. Lenders usually redeem properties that are nearing a tax sale so they don’t lose their mortgage interest.

The properties that remain are usually there because there is nobody but the uncaring owner to redeem.

You care though. You know you can pick these properties up all the time for a token payment to the owner (or get them under contract and flip them to an investor), and make thousands or even tens of thousands per transaction.

Get my free guide (below) now! With tax sale properties nearing deed sale or the end of their redemption period almost every day, the source of properties for you to pursue is almost endless.

Tax Deed Sales Create an Unexpected Profit Source

Tax Deed Sales Lead to Another Profit Opportunity

If you’ve ever attended tax deed sales hoping to get bargain property, you’ve probably experienced some disappointment as those low opening minimum bids shot up to near market value. While a $100,000 house for $4,000 is a great deal, there are many other bidders who feel the same way, and they’ll bid that property up to $75,000, $85,000 or even full market value in some cases.

When I first got started with tax deed sales, I felt the same frustration as, time and time again, properties were bid out of reach. In the meantime, however, I’ve learned how to stop fighting this bidding and use it to my advantage. There are two ways to do this.

Let Properties with Title Problems go to the Tax Deed Sale

In my investing activities, I often run into properties that have title problems which would prevent me from reselling easily. Since these properties have many liens or other title problems I can usually get a deed to the property for very little money.

When I get a property like this, I do not pay the property taxes (hold the property in a junk corporation or LLC). Eventually the property ends up at a tax deed sale. The minimum bid for the property is roughly the amount of taxes owed on the property.

Even though I can’t resell the property because it has title problems, tax deed sales almost always wipe out liens or title problems, and the property will receive a near-market value bid at the sale.

So let’s say I have a property with $90,000 worth of liens on it that would have a market value of $100,000. I cannot resell the property because of the liens. However, when the property goes to the tax deed sale the liens are wiped out and the property may get a bid of $75,000 – $100,000. If the property taxes owed were only $5,000, this would leave a surplus of $70,000 – $95,000. As the owner who lost the property, I’m eligible to claim the surplus from the county.

If you’re going to use this strategy, make sure that your state allows former owners to claim surpluses from tax deed sales, and that the owner can receive the surplus even if the property had liens.

Help Other Owners Get Their Surplus Funds

Tax Deed Sales and Unclaimed Funds - Unexpected Profit Source

Tax Sale Unclaimed Funds - Unexpected Profits

Now you’ve seen how surplus funds are created. At most tax deed sales, surplus funds are created for other owners also whose properties went through the sales process.

A little secret that most counties have is that they get to keep the surplus funds generated at their tax deed sales if the owner does not claim them within a certain period of time (usually a couple years). So, the county often puts forward little effort to track down, or even notify the owner of their funds.

This creates a business for us. Through public records requests we’ll find out all of the surplus funds currently being held by the county, and who is entitled to these funds.

Using resources available on the internet (often free), we’ll track down these owners and offer to retrieve their funds for a 40-50% finder fee. Because the counties almost never publish these lists of funds online, the owner will likely be unable to find the funds on their own, and will agree to let us retrieve them.

The best thing about this business is that you can do it anywhere in the country, from anywhere in the country. You do not have to attend tax deed sales to see when surpluses are created. All records and documents go through the mail or email, so you don’t have to travel to obtain information about the past tax deed sales or to sign up claimants for your service.