Tag: properties

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.

Get Tax Lien Properties in Days, Not Years!

Tax Lien Properties Take Time!

Don't Grow Old Waiting to Get Tax Lien Properties!

How to Get Tax Lien Properties NOW

The main disadvantage to trying to acquire tax lien properties is the long wait that goes into a tax lien investment before a deed can be obtained.

Some states have a redemption period as long as 4 years (the time allowed for the owner to pay off the lien).

And, after the redemption period there is often a significant wait time for the deed to actually be issued by the county on tax lien properties. Then a quiet title action must be performed. It’s necessary before you can sell the property with title insurance.

Also, you’ll find that over the course of the redemption period, most tax lien properties will indeed redeem (pay you off). You have a nice interest return no tax lien properties.

I’m about to show you a way to get tax lien properties now, without doing any bidding, waiting, or investing your own funds to buy tax liens.

Several years ago, while attempting to obtain tax lien properties myself, I noticed that 95% of the properties redeemed, and that using all my available cash I could only purchase 10-20 liens each sale. This meant that I only stood to get on property at the most from the sale. In fact, I never got any properties, all my liens paid off.

At the same time, because there were hundreds of liens sold at the sale, indeed there were a couple dozen properties that were lost each year. The problem was, there was simply no way to know which tax lien properties would go all the way to deed, so you just had to get lucky with whatever liens you purchased.

One day I was going over the final results of a tax lien sale that occurred the year before (there was a one-year redemption period which had just ended), and I was looking at all the lucky buyers that had acquired a property or two. There were actually some nice properties on the list that could have been redeemed for less than $10,000 that were worth over $100,000.

It had been several months since the redemption period ended, and I thought to myself “I wish I had been on this owner’s doorstep right before the redemption period so I could have warned them – I could have at least given them some money for the property so they walked away with something!”.

Then it hit me – why don’t I look at all the tax lien properties from this year’s sale, that could still be redeemed for the next few months, and start approaching all the owners who were about to lose their properties!

I did just that. I looked up which liens had sold the year before, and crossed out all the ones that had paid off in the meantime. This gave me a short list of all the owners who were about to lose their property. The original tax lien properties list before the sale was over 10,000 properties. Of those, about 1100 sold at the sale and by the time I got the list 800 of them had paid off. So I had a prime list of 300 properties to really focus on over the next month.

The results shocked me. Here’s what I found:

– Most of the properties were free and clear. I later realized that if a property had a mortgage, it was likely one of the 800 that paid off already because mortgage lenders redeem properties to save their own interest.

– Far fewer of the owners were owner-occupants compared to mortgage foreclosures. Of those who did occupy the property, most had been given the property through an inheritance or other means. To this day I’ve never seen someone who spent 30 years paying off a mortgage and then allowed the property to fall victim to unpaid taxes.
– Many of the property owners were deceased. I soon learned how to get deeds from the heirs and get instant title to the property. Most states have a “small estates” provision that will allow you to get good title to the property without a long, drawn-out probate. Since almost nobody outside the legal profession knows how to do this, you’ll have a tremendous advantage.
– All the properties that “fall through the cracks” end up at a tax sale eventually. Maybe someone was given a property they didn’t want. Maybe someone was sick of paying for repairs and taxes and just gave up being a long-distance landlord. Maybe family members moved into the house and were supposed to pay the taxes but didn’t.

For whatever reason, tax lien properties are the most interesting source of pre-foreclosures you’ll ever find – and the profits can be immense.

Best of all, you can get involved with little risk by either making a token payment for the deed to the property (in the case of someone who tells you they’re letting it go), or by getting the property under contract and flipping to another investor.

Incidentally, investors trying to get their hands on tax lien properties through tax lien auctions are excellent people to assign contracts to – they are proven cash buyers who buy sight unseen, and you can get them a property now with no bidding or waiting, at a bargain price! What could be better?

Tax Lien Foreclosures – The Mortgage Pre-Foreclosure Alternative

Tax sale Foreclosure or Cash?In today’s market, tax lien foreclosures are the new source of high-equity properties going through the foreclosure process.

We’re not going to purchase liens at tax lien sales. We’re just going to follow the classic mortgage pre-foreclosure strategy with a different source of leads!

Mortgage pre-foreclosure investing has been a popular investing method for several decades now. Using readily available public records, investors approach homeowners who are going through the mortgage foreclosure process.

hey then offer to purchase the property or otherwise profit from the situation, preventing many tax lien foreclosures from ever happening.

This was not a bad strategy when prices were skyrocketing in the mid 2000s. Anyone who had owned their property more than a few years likely had “built-in” equity just from the rapid appreciation.

Therefore it was a simple matter to find properties that had equity and get some deals going with the homeowners.

Even when the market was ripe for this approach, there were still problems:

  • Mortgage pre-foreclosure investing was well-known and the competition was fierce
  • Most property owners were owner-occupants who wanted to save their home and continue living there
  • Even though the property may have had equity, there was still a significant mortgage balance in most cases, and a significant arrearage to cure
  • So even though there were a lot of properties the fit the mold for the strategy, it often cost 5 figures to bail out a property from foreclosure.

    Plus, further monthly payments were required until the property could be disposed. Worst of all, you’d find youself dealing with a reluctant participant (the owner/occupant) who really didn’t want to do the deal anyway.

    Enter Tax Lien Foreclosures!

    It turns out that properties can be foreclosed for non-payment of property taxes as well. In many states, a tax lien is sold against a non-paying property.

    Eventually that lien threatens ownership of the property. For liens not paid within a certain amount of time, tax lien foreclosures begin.

    Now, in the majority of cases, the tax lien is paid by the owner or the mortgage company well before the ownership of the property is threatened. This prevents many tax lien foreclosures from ever taking place.

    By the time the tax lien reaches the late stages of maturity, most of the properties left do not have a mortgage. If they had a mortgage the bank would have likely stepped in and paid the property taxes to save their interest in the property.

    When I discovered this phenomenon and began contacting owners who were about to become victims of tax lien foreclosures, I found the following:

  • Few other investors had picked up on this strategy, and there was a little bit of front-end work required to research which properties were close to becoming tax lien foreclosures. I was the only one contacting these owners
  • Most of these owners had inherited the property, or were deceased (I just contacted the heirs if that was the case). In other cases, the owner just moved on in life and didn’t want to deal with the property and keep making tax payments.

    This explained why the properties were free and clear and still entering the tax lien foreclosure process. Most owners did not live in the properties and were not emotionally attached to the properties.

  • Because the properties were free and clear, all that needed to be done was to make a tax payment and there would be no further payments necessary for a number of years.

    This prevented a lot more cash going out the door while disposed of the property. Also, the amount to pay the taxes was usually much less than the typical amount needed to bail out a mortgage pre-foreclosure.

  • If you want to get involved in a risk-free real estate method with motivated sellers and high-equity properties, this is the only way to go. See which tax lien foreclosures are about to take place by looking at past sales and seeing which liens are still unpaid.

    Get the owners of those properties under contract or even buy them out for a token payment of as little as $50. Grab my free report below, and you may soon be known as “the investor that STOPS tax lien foreclosures” in your area.

    Property Tax Sale Brings $4 Million

    As previously reported, Indiana’s property tax sale offerings are bursting at the seams. The recent trending (revaluing of properties) has caused the cancellation of several years’ worth of sales.

    One county (Clark County, IN) has not had a tax sale since 2007, and predictably enough, the property tax sale held yesterday brought in almost $4 million. According to NewsandTribune.com, the 79 bidders at the sale had 408 parcels to choose from, and purchased liens against 226 of them.Tax sale: Large Tracts, Shopping Centers, Even Condo Complexes

    One is left to wonder, how many properties went unsold at the property tax sale because of several years’ unpaid taxes?

    Offerings at the Property Tax Sale

    Do commercial properties, apartment buildings, and even large tracts of land get offered at a property tax sale? Sure they do!

    The source article at http://newsandtribune.com/local/x537488271/Clark-Co-reaps-nearly-4-million-from-tax-sale gives a good description of how the Indiana property tax sale works.

    But let’s read between the lines and truly get an idea of what these stats can mean for us as tax sale insiders.

    Indiana Property Tax Sale Facts

    Here are a couple quick stats:

    $3.96 million worth of liens were sold at the property tax sale, spread over 226 liens sold. That’s $17,500 per lien on average! There must have been some large overbids at this sale.

    So there are also 226 properties in this county alone, to begin contacting owners about (think there are a couple we could snag right away? I think so!)

    79 bidders registered at the sale – if you’re doing business in this area, get a public records request into Clark County as soon as possible. The list of the bidders at that sale – 79 cash buyers – have already shown they have cash available. And who wouldn’t love to get properties NOW instead of waiting for the property tax sale to take its course!

    Can anybody tell me why they WOULDN’T hop on this county right away to do business? Respond below and let me know! This is but one property tax sale of dozens this year with unreal opportunity!

    Indiana Tax Sale

    Indiana tax sale files bulge with unsold properties

    The Indiana Tax Sale has become a mess from re-assessments and missed sales.

    Indiana Tax Sale Gets ‘Out of Whack’

    It seemed like a good idea back in 2002-2003: Replace the entire property tax system. That has put the Indiana tax sale in limbo right to this day.

    Someday it will likely prove to be best in the long rung. But for now, there’s pain.

    Before the Indiana tax sale system underwent change, taxes were assessed based on replacement value of a property. This was not a realistic figure in most cases.

    Meanwhile most of America was on a true market/resale value system which is much more fair. So, Indiana set out to revalue all properties based on what they would sell for in the current market.

    Every four years the properties would be “trended” to reflect new market values. At the time, values were thought to be only capable of rising further.

    Assessments were ridiculously high on some properties, especially in blighted areas where assessments were sometimes 10-30 times true market value. Plus, the revaluing of properties took much longer than expected in most counties.

    This resulted in delayed tax bills, and thus, delayed tax sales. Indiana tax sale dates were often canceled for several years while the mess sorted itself out.

    In the meantime, properties that were barely worth 1-2 years’ worth of taxes in normal times, and usually sold at the Indiana tax sale, sat unsold.

    They then accumulated 3-4 years worth of taxes during the confusion, making them worthless and completely unappealing to any tax sale buyers at the prices offered.

    This phenomenon also had the unfortunate effect of placing the burden from the uncollected taxes on these properties onto the remaining homeowners and landlords in the area.

    A typical result was that cities like Gary, Indiana had to raise their tax rates. So high in fact, that on many properties rents were barely able to cover the property taxes.

    With annual market rents of $4000 – $5000 per year, taxes rose to in excess of $3000 per year. This made owning even a free-and-clear property in clean rentable condition, hard to profit from. Therefore nearly all properties of this type that were offered at the Indiana tax sale went unsold.

    And, a vicious cycle of increasing abandoned properties and taxes on those properties that remained, continued.

    Now that 2010 is here, trending (an attempt to again revalue properties) was once again completed late. It’s caused many counties to have 2-4 years worth of accumlulated tax-delinquent properties on their sales that formerly sold at the Indiana tax sale.

    This won’t change the fact that many properties on this sale will now be worth less than the minimum amount owed. But consider the opportunity this will afford to us when we contact owners of mid-value properties ($20,000 – $100,000) offering to purchase.

    Redeeming one year’s worth of taxes plus interest is often hard enough for these delinquent owners. The Indiana tax sale is unforgiving – no extensions.

    But it’s even harder now – redeeming 4 years’ worth of taxes and interest will be nearly impossible for most. Required tax redemption amounts of $10,000 – $15,000 will be commonplace. Yet owners will still have some equity above and beyond this amount.

    Smart tax sale investors at Indiana tax sales will be skipping the sale this year, and dealing with owners of properties in the mid-value range.

    These properties will still likely have had tax liens sold against them this year. So get our early and approach the Indiana tax sale from another persective – using what you discover in my free “Underground Tax Sale Strategies” report.