Tag: Send Postcards

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.

Indiana Commissioners Sales – Part 3a

Indiana Commissioners Sales

Indiana Commissioners Sales Strategies

We covered the big upsides of Indiana Commissioners sales in Part 1 – and then looked at the downsides that we’ll need to manage in Indiana Commissioners Sales Part 2.

Now, it’s time to get into the nitty-gritty specifics – strategies you can actually use when investing at Indiana Commissioners Sales. I’m actually going to have to split this one in half – too much good stuff to leave out.

Property Characteristics

In my experience, there is one, and only one, specific type of property you should target at Indiana Commissioners sales.

You should look for single family houses that are occupied and in fair condition or better.

Occasionally you will run across a vacant house that is obviously in great shape. In this rare case, you may want to make an exception to the rule. For instance, once I bought a lien on a vacant property that was listed with a Realtor. I went online to view the interior pictures and it turned out the inside was just as nice as the outside.

Indiana Commissioners Sale Property

I confirmed this vacant house was as nice inside as it was outside, before buying.

Also notice in the property description that I didn’t say “in a good neighborhood”. Good neighborhoods are obviously a bonus and you can sometimes acquire properties that have everything going for them. But if the property is occupied and in good condition, I’ve found the neighborhood is never a reason not to buy. You’ll see why later.

What Cities Have Properties Like This That You Can Find at Indiana Commissioners Sales?

Many cities, and indeed entire counties, will not have properties in the Indiana Commissioners sale that meet the above criteria. You’ll simply have to invest in another county if this is the case.

There are a lot of “rust belt” towns in Indiana that are full of these properties, however. And surprisingly, there are decent renters for these properties if you charge a low rent (which you can afford to do because you will have ‘stolen’ the property!). Here are some that come to mind (not a complete list by any means):

    Evansville (Vanderburgh)
    Muncie (Delaware)
    Marion (Grant)
    Gary/East Chicago (Lake)
    Fort Wayne (Allen)
    Indianapolis (Marion)
    Kokomo (Howard)
    Anderson (Madison)
    Richmond (Wayne)

In case you haven’t heard, Indiana also is one of the few financially healthy states in the country right now. I believe this will attract a lot more business and jobs to the state over the next few years because other states will have to continually raise taxes to survive. Indiana just had a $1.7 billion dollar SURPLUS for the year.

Appreciation really is not an important part of our strategy here. But it sure is nice to have property that can really only go up in value since it’s near bottom now – along with conditions that would allow these towns to make a comeback.

Avoid Certain Occupied Properties at Indiana Commissioners Sales

You’ll also find occupied properties in totally nasty condition. I used to think that condition didn’t matter if the property was occupied, as the occupant would surely pay me something to stay. I was wrong.

I found that most of these occupants are looking for an excuse to get out of their filthy conditions, and asking them for even $100-$200 monthly rent was enough to motivate them to take action (move). Soon you’re stuck with the kind of property you were trying to avoid owning in the first place.

Don’t Get Sucked Into Buying Questionable Properties at Indiana Commissioners Sales (Without an Advanced Strategy)

As you look at properties, it is tempting to buy liens on property in bad condition because the minimum bid is so low – as little as $150 to buy the lien. You may figure that you could sell the property for at least a couple thousand as long as it is still standing.

With the real estate market bad right now, there is almost no demand for this kind of property in an urban area. This is because even properties in rentable condition are worth nearly nothing on the resale market. Therefore it’s impossible to come out ahead by fixing a decrepit property.

Eventually, you’d likely succeed in reselling the property for a few thousand to someone in the neighborhood with some lofty dreams. However, that sale price may not even cover your legal fees and closing costs. Junk properties in these areas are really just a waste of time and very stressful to own and try to sell.

Your goal should be to acquire properties that are already occupied with a renter – or close to being rentable – and to step in to collect the rent as soon as you get your deed. If you don’t want to be a landlord, you could also resell the properties for a small profit, but compared with the rent you can collect, I think it’s foolish to sell rented properties you get from Indiana Commissioners sales.

Why Rentable Properties Can be Purchased for Almost Nothing at Indiana Commissioners Sales

We’ve covered many reasons why decent rentable properties can be purchased for as little as $1000 in certain cities at Indiana Commissioners Sales:

No institutional competition
-Bad resale market
High minimum bids are now slashed
-County wants to get property on tax rolls
Real or perceived bad neighborhoods

Now you know exactly what you’re looking for and where to find it in Indiana. In the second part of Indiana commissioners sales Part 3, we’ll go over additional critical strategies to make your Indiana Commissioners sales successful.