Indiana Commissioners Sales – An Advanced Method
You know what to look for, where to find it, and how to make a safe investment at Indiana Commissioners sales. The only problem? Scaling things up! You might want to participate in several sales, but traveling all over Indiana just isn’t part of your game plan. Here’s a way to get around that.
The Portfolio Approach
The portfolio approach is pretty simple – but it’s not for the faint of heart. Why? You’re likely to lose your investment on most of the liens you buy at Indiana Commissioners Sales with this method. But the winners will more than make up for the losers.
You’re going to do the best you can to eliminate obvious losers from your list, then you’re going to set a relatively low maximum that you’re willing to bid for properties on the list – say $1,000. Better yet, participate in several sales and set your limit even lower.
Once Indiana Commissioners sales begin online, buy all the liens you can for less than your limit. Don’t forget to keep some money in reserve for potential legal costs.
Now that you’ve successfully won several liens, NOW do a little more in-depth research. Send someone over to the property to see if it’s indeed occupied. If not, have them take some photos for you through the windows.
Using this method, half or more of the tax liens you’ve won may not have a desirable property behind them. Spend only 44 cents more on each lien – send the owner notice yourself, in hopes that they might redeem.
Otherwise you will do nothing further with these liens – you don’t want to throw more good money after bad.
|Important: Though you’ll look at the liens you won in greater depth, you should not enter the properties or disturb the occupants at this point. However, after the redemption period ends, and a lien hasn’t redeemed, I visit the property immediately and attempt to make contact with the tenants. If I’m somehow 100% sure the property is vacant, I try to get inside to take a look (warning: this may not by strictly legal). If I don’t like what I see, I’ll probably skip the expense of even getting the deed.|
Here’s the upside: if you bought at least 5-10 cheap liens after screening them to the best of your ability, you’re likely to have at least one home run – if not several.
These are properties that you might have bid several thousand for if necessary, having done more in-depth research.
In other words, the winners will have cost you so much less, and be worth so much more than you paid, that they easily make up for the losers.
Other Advanced Strategies to Consider with Indiana Commissioners Sales
-Learn how to do the tax sale noticing yourself for these low-dollar liens
-See if you can sell the liens you don’t want – advertise to the registered bidders list from the sale
-If you keep the home for rental, don’t spend money on a quiet title
Again, these are advanced strategies that you should look into later after you get a feel for things.
Return on Investment – Indiana Commissioners Sales
Return on investment for funds you invest at Indiana Commissioners sales can be breathtaking – even unbelievable.
Here are some examples from our recent past:
-Paid $3260 for an occupied house that was already rented section 8 for $450. Got our money back in less than 8 months and have collected an additional $5000+ with no end in sight
-Paid $3188 for an occupied house and quickly found a renter for $450. Got our money back in less than 8 months and have collected an additional $5000+
-Paid $3093 for an occupied house that was already rented section 8 for $425. Collected $5950 from Section 8, then got a new tenant that pays $695 per month.
-Paid $1057 for a house that needed about $3k in work and has been renting for $595 for almost 2 years.
Until recently, the dirty little secret about rentals in Indiana was that the property tax bills were outrageous and made it challenging to profit even from properties that were free and clear (see this post from last year).
However, a new amendment to Indiana’s constitution now sets maximum tax rates at 2% of assessed value, which is supposed to be aligned with real market value. And market values are REALLY low.
Translation – taxes are now dirt cheap, even for landlords!
Why Get Involved in Indiana Commissioners Sales Right Now
The planets have aligned, and it’s now a great opportunity to invest in Indiana Commissioners sales using the method I outlined. Here’s why.
Past Reassessment Problems Have Created TONS of Discounted Liens
For almost a decade, Indiana counties have been in turmoil as we switched to a market valuation model for assessing taxes. The confusion resulted in many counties skipping one or more tax sales, which allowed high taxes to accumulate on many “borderline” properties.
Therefore, when a tax sale was eventually held, many, many properties went unsold due to years of piled up taxes. Expect to see them on the Indiana Commissioners sales list this spring – the buildup of taxes has caused the list to swell, a good thing for us as buyers. However, we will still pay the discounted bids offered by the commissioners.
Nearly every county is on the same “tax sale cycle” now also – so the commissioners sales should be a lot more predictable.
Taxes Are Now Low and Predictable
As mentioned earlier, a recent Indiana constitutional amendment capped rental property taxes at 2% of value. With values extremely low at this point, tax bills are going to be tiny on these properties for the near future. If and when they do increase, it will be due to an increase in the value of the properties – a great thing for you.
In my county, where taxes are notoriously high, my rentals are now down to around $1000 per year each – somewhat reasonable (though their assessed value is still several TIMES market value). In some counties I have no doubt there are $100-$200 tax bills for these properties.
Number and Quality of Renters Increasing
As more and more people lose their homes, they will need to rent. Increases in average rents have already been seen nationwide. And if you play your cards right, you might even have a renter ready to pay you when you obtain your property – the current occupant.
Also, Indiana is set to gain jobs and population due to its low taxes and lack of debt. This lack of debt will enable Indiana to retain its low taxes instead of having to raise taxes like other states.
The Deals are Crazy!
You can buy a house for as little as $1000 and with a little minor repair, have a solid rental that you own free and clear. Or you can pay a few thousand for a house, and go down to the Section 8 office to have them start immediately sending rental checks to you. Now that’s cool.
Everyone needs somewhere to live – and this is a great chance to “get in at the bottom”, risk very little, and earn great cash flow almost immediately. With a little luck, you’ll even see nice increases in your properties’ values and saleability as time goes by.
Check out some Indiana Commissioners sales online this spring, and start building your free and clear portfolio for peanuts!
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Sites That Link to this Post
- Indiana Commissioners Sales – Part 4 | Kellys blog - | December 23, 2011
- Indiana Commissioners Sales – Part 4 » Lose home | December 23, 2011
- Indiana Commissioners Sales – Element 4 » Pay Your Bills | December 23, 2011
- Overborrowing » Blog Archive » Indiana Commissioners Sales – Area 4 | February 21, 2012
- Indiana Commissioners Sales – Element 4 « Move to apartment | February 22, 2012