Tag: tax lien

Property Tax Sale – Free Lists Online

Property Tax Sale / Delinquent Property Files Often Found Online – Free!

Property tax sale lists used to be a bit of a pain to get a hold of – you either had to make a public records request and wait for that to be fulfilled, or purchase a property tax sale list from a vendor online.

But now that more and more counties are “going online”, you can often find and download these lists for free.

Why the County’s Property Tax Sale Lists Are Better

Not only are the lists that you can get right from the county usually free, but they have a number of other advantages:

1. The lists are often updated very often, even daily, to reflect properties that have dropped off the list.
2. The lists contain not only property tax sale records, but even properties that are slightly to moderately delinquent but not on a property tax sale list yet.
3. They are in electronic format – easy sorting and filtering using your computer instead of dealing with a paper property tax sale list.

How to Locate Property Tax Sale and Delinquent Lists Online

You’ll have the best luck in the midsized to large counties, as smaller counties don’t seem to have the budget to have good online resources.

All you need to do is start Googling! Use words like “delinquent tax file”, “download delinquent list”, “delinquent property file”, “delinquent tax roll download”, and other terms like that.

Let’s see what happens when we do a search for a property tax sale / delinquent list using the term “download delinquent list”:

Property tax sale search on Google

Results for a propety tax sale / delinquent list search on Google

It looks like each of the first few listings has its own property tax sale list or even complete delinquent roll file for download. Let’s look at the first one:

Property tax sale listing online for a tax lien sale

An online list for a tax lien sale

Now, this list is from the last tax lien sale. So that’s an OK start. But look a bit further down in the results – Milwaukee has posted its entire delinquent file online! Over 25,000 records for you to download, each representing a delinquent parcel on its way to a property tax sale soon.

The list contains everything you’ll need to begin marketing to tax-delinquent owners BEFORE the actual property tax sale list even becomes officially available.

Over the Counter Tax Sales

At nearly all tax sales, there are parcels that do not sell for even the minimum amount of taxes owed.

An interesting thing to note about this phenomenon is that it indicates overassessment of a property to an almost unbelievable degree. The property is being taxed in excess of its true market value over the course of just one or several installments of taxes! This is shown by the fact that nobody is even willing to pay the current taxes owed for the property.

Of course, delays in holding tax sales can result in more installments building up than intended by law, before a sale is held. See my article, “Tax Sales – Essential for Every Community”, for more information on this effect.

Tax Sales - Leftovers

In most states, counties re-offer the properties that do not sell at second-chance tax sales. Let’s look at a few ways we might be able to get involved.

Opportunities at “Second-Chance” Tax Sales

If a county re-auctions properties that did not sell at the original sale, but doesn’t give special terms, bargains will still be elusive.

Even if the bidding starts at 1 cent for leftover parcels, competitive bidding will usually eliminate any opportunity to get a property for less than market value.

However, since the properties offered at these tax sales are more “bottom of the barrel”, these tax sales may attract fewer bidders and bargains may be had.

Other times, counties will sell the properties “over the counter”. It’s possible to make small profits on these properties occasionally. In general though, even minor bargains that are openly available to the public for any significant amount of time will be snapped up.

“Second chance” sales in tax lien states, however, can be one of the rare opportunities to participate directly in tax sales, enjoy low prices, AND eliminate negatives associated with tax liens.

This is because the county can “sweeten the deal” in more ways than one in the second chance tax sale.

Indiana Commissioner’s Sales

One example is an Indiana commissioner’s sale. Commissioners can drastically cut the minimum bid for properties offered in the sale, especially after multiple failed attempts to obtain what is actually owed in previous sales. In addition to this benefit, redemption periods for owners are also cut to a very attractive 120 days. Return on investment remains at 10% flat amount for the 120 days (30%+ APR!)

Because county officials in many Indiana counties seem unable to perform reassessments in a timely manner, delays in the tax sale happen often as mentioned above. So, in a typical example, taxes on a servicable single family home in Gary, Indiana can reach almost $10,000 from one sale to the next.

The market value of a home like this is around $10,000, and redemption rates are not as high as the rest of the county, so few bidders will participate in the sale of a home like this.

However, the county may cut the minimum bid of a properties like this to $2000 or less, and just as importantly, reduce the redemption period down to 120 days. Because of the volume of properties offered, and the fact that this is not a deed sale, bidding remains subdued in many cases, and bargains can be had.

In a recent sale I was able to acquire 4 homes, 2 of which were rented Section 8, at $450 apiece, for a total of less than $10,000. The two vacant homes required less than $10,000 total to fix up and are now rented at $450 and $600 apeice, for a yearly gross rent of $23,400. At first, the deal sounds unbelievably good with a less than 12 month payback on investment. I was indeed happy with the investment but it’s not nearly as great as it seems.

Work Second Chance Property as a DeedGrabber?
In my experience, it only pays to be involved in second chance sales as a bidder. Typically, if the owner of a “second chance” property wants to redeem (HINT: this is you if you buy it from the current owner), the full amount of taxes must be paid. In the example above, you would have to pay $10,000+ to redeem the property that you observed sell for $2000 at the second-chance 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.

Tax Lien Sales: 5 Deadly Traps Lurking Just Below the Surface

Tax lien sales: 5 traps

Tax Lien Sales: Not for the Novice

Attending tax lien sales seems like a great way to get bargain property – and in rare cases it can be. Tax liens certainly offer a decent return on your money. In many cases, you’ll earn up to 25% APR or more.

On the surface, it seems like a win-win situation. You either get a bargain property, or at worst, get a great return on your money.

As someone who has attended many tax lien sales in the past, however, I can tell you that there are some traps you may not recognize until you jump in:

Make sure the actual return you stand to make will be worth your effort. Over 95% of tax liens redeem before the underlying property can be acquired.

Therefore, you must be satisfied with only the interest you stand to make from your investment. And there is a substantial effort required to investigate all the properties on the tax lien list.

If you’re investing only a small amount of money, like $10,000, you will only earn perhaps $1,000 on your investment if all liens pay off. You may have to invest at least $1,000 worth of your own time investigating properties before the tax lien sale, bringing your real return down to zero.

Don’t forget about legal costs associated with acquiring properties. You may need to spend several thousand dollars with an attorney providing notice to the owner and perfecting your deed to the property. In many cases these costs can be more than you spent on the lien itself!

At many tax lien sales, properties with city code violations will be offered. It’s important to check all properties on which you may buy a lien, at the city building inspector before purchasing the lien.

The property could be demolished by the time you acquire it, and/or you may have to immediately deal with the city upon acquiring the property. You’ll want to avoid this or bid accordingly.

Plan to potentially wait much longer than just the redemption period to get your deeds to properties from tax lien sales. It can take several months to a year to get a court date to request your deed and wait for the county to issue the deed.

Then you will almost always have to perform a quiet title action to get martketable title to your property. Factor this in when bidding!

Don’t forget about other bidders attending the sale. In a few states, the price of the lien is bid up until a winner emerges.

In these cases, make sure to set a maximum price you’re willing to pay. In other states, the interest on the lien is bid down – on good properties the interest rate is often bid to zero.

Still other states have a random system for choosing who gets to buy a particular tax lien if several bidders are interested. No matter what the system, establish what you’re willing to pay for a particular lien, and stick to it. You may not be able to buy the exact liens you want and may need to have some alternates picked.

After being a tax sale investor for over 10 years, I can tell you with certainty that tax lien sales are not for beginners or those with only a small amount of funds to invest.

They are dominated by experts who have hundreds of thousands, or even millions of dollars to invest, and who are able to make a significant return from interest because of the large amount of money they have access to. Property acquisition is a very small part of the allure to investing at tax lien sales.

Most new investors investigate tax lien sales as a way to pick up property for a tiny fraction of its value. They are soon disappointed to find out that all of their liens redeem and they are left with a small amount of interest.

However, tax lien sales create a way for us to acquire cheap properties without even participating in the sales – we can simply let the other tax lien buyers fight over the liens, and then close to the redemption period ending, we will look up which liens remain unpaid.

Then, we’ll contact the owners of those properties directly and get the property under contract! Most properties in this situation are free and clear, and are unwanted by the owners. Some will sell for as little as $50 just to get the property out of their name.

Now, we don’t have to worry about investing our own money, legal costs, or code violations (we’ll just pass if we find any, or deal with them).

We don’t have to wait for a redemption period to end, since we’re looking up past tax liens that were already sold. We don’t have to compete with other bidders, or do a quiet title action on the property. Much better.

Get my guide to working tax lien sales a smarter way (below) – “Underground Tax Sale Secrets”.

Tax Lien Auctions: How to Get 500% More Properties

Going blindly into tax lien auctions and expecting to obtain cheap properties is not something you can expect to happen. The fact is, 93-98% of all tax liens purchased at a tax lien auction will eventually pay off, leaving the investor with only interest and no property.

However, there is a 3-step approach to tax lien auctions that will easily increase the number of properties you obtain by 500% or more.

Step 1: Pre-Sale Intelligence and Marketing

If the tax lien auctions you’re pursuing have a large number of liens offered, make sure to get the list on a spreadsheet along with assessed value of each property. Eliminate those properties that have a very low assessed value – it’s unlikely you’ll be able to make much of a profit from these even if you can get them for free or nearly free.

This will significantly reduce your list size and make it more manageable.

Next, send a postcard to each owner remaining on the list, with a simple “We Buy Property” message. Most investors never think to send marketing to this group of owners, even though they’re some of the most motivated or indifferent owners out there.

When you get calls from this postcard, determine whether the owner is letting the property go, wants to sell, or is trying to keep the property. If the owner says they’re just letting the property go, offer a token payment for the deed and resell the property. Use the buyer’s purchase funds to redeem the taxes and get your profit.

If the owner wishes to sell the property, but at a more significant price, get the property under contract and flip the contract to a cash investor. You’ll find cash investors investing at the tax lien auctions by the way – get the registration lists the county requires from past sales to obtain their names.

The most important part of Step 1 is to save the returned mail you get from your postcard campaign. Make sure you mail the postcards with a proper return address and with a postage level that allows for returned mail (no third class mailers!)

Step 2: Buy the Right Liens at the Sale

In your hands right now are the sellers least likely to redeem their properties from the upcoming auction. You’ve mailed to postcard to the address on file with the county, and that’s the same address the county has been using to try to send the owner tax bills and notices about the tax delinquency. It’s also likely the address to which the tax lien buyer will have to send notices about the tax lien auction.

Since you have a postcard sent back “returned” in your hand, you know that the owner likely does not know about the tax delinquency and will not be able to receive any further correspondence about tax lien auctions involving the property. This dramatically increases the chances that the property will not redeem and that you’ll someday obtain a deed to it if you buy the lien at the upcoming auction.

In our experience redemptions rates for liens with bad mailing addresses are only about 50% likely to redeem.

Another quick check you can do is to run each owner’s name through the social security death index (just google it to find it). Properties still titled in a deceased owner’s name also have only about a 50% chance of redeeming from tax lien auctions in our experience, down from 93-98% overall.

If you don’t have a lot of capital, you can skip the tax lien auctions and go to step 3. But if you do have capital that you’d like to earn 10-20% interest on, and have a great chance of actually getting properties, do everything you can to buy the liens with deceased owners or bad mailing addresses.

Step 3: Buy Properties Sold at Previous Tax Liens Sales From the Owners

Get 5 Times the Houses Using this Technique

Get 5 Times the Houses Using this Technique

Go around to nearby counties and get the sales results from past tax lien auctions. Find out which liens actually sold, and cross off the liens that have paid off in the meantime. This will leave you with a list of active tax liens. When the deadline to redeem is within 1-2 months, aggressively contact the owners left on the list, using skiptracing methods like Intelius if necessary, and get an offer into their hands. Motivation should be high with most sellers to get something out of their property before it’s lost completely.

Using this 3-step method, you should be able to obtain many properties from tax lien auctions, either directly from the auction or indirectly by purchasing from the owner. This is only one of 12 ways to profit from tax deed and tax lien auctions creatively.