Posted by Heather -Tx on December 17, 2002 at 23:13:51:
Thats a complement and a HALF!~~
Mike: Owner Unknown, Tax Sales, Land? - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on December 16, 2002 at 21:43:57:
I received the following via e-mail. I don’t think that there is any problem with privacy here so post so others can read and, if desired, respond to Mike.
----The E-Mail ------
Hi Ron -
Hope you don’t mind an email. Your latest CRE
beginner post (the punchlist) is outstanding.
You’re one superb dude handing out the benefit of your
experience to any old Joe/Jane at no charge. What a
guy!
I’ve been studying Reed’s “20%” book. His profile of
the “Owner Unknown” technique hooked me and is what
I’m working on. But following Segel’s advice (“Owner
Unknown” author) I am discarding small, unbuildable
landlocked lots as most likely worthless.
However, reading of your escapades in the delinquent
tax auction portion of Reed’s book (and
you did say these are suitable for beginners IIRC), it
sounds like these lots Segel suggests passing on are
just the sorts of crappy little lots that many of
these auction-goers are buying. Is that correct?
So maybe I shouldn’t immediately discard these crappy
little parcels and instead should be pursuing them
(leisurely since it doesn’t sound like there’s a whole
lot of money to make on this kind of junk) to get
interest in them before the auction? And is Reed
accurate when he more or less says that up to 1/3 of
the properties at delinquent tax auctions are owner
unknown?
With the skills I’m learning from Segel’s book I can
use them with the auction properties to buy them ahead
of time. Do you think it’s worth it (using Segel’s
owner unknown techniques to local/buy interests in
owner unknown tax auction candidates before they go to
auction)?
Do you know if there’s a way to force a tax sale more
quickly? I don’t want to get some of these parcels
then have to wait years before they even come up for
sale. It’s not worth it (IMO, but then I’m not the
expert here).
If I let a parcel go to tax auction but then nobody
buys it, what happens? Does the town just take it
from me? I’d want to do like you did - force the sale
by purposely not paying the taxes but can the town sue
me to pay the (back) taxes and collect if no one buys
it at auction?
Two final questions please:
Is your tax auction book still available? I didn’t
get any hits on the title or publisher (except for
Reed’s page) when searching Internet. And do you know
another way to get John Beck’s stuff without having to
go through that scam outfit he seems to be tied up
with? (Ppl overbid his stuff on ebay; it isn’t at my
library; nada on Amazon).
And lastly, I’m working on Segel’s owner unknown, want
to simultaneously pursue delinquent tax auctions, and
plan on also going after out-of-county land owners
(Reed/Stephenson). Out-of-county land looks like a
reasonably low-overheard project; tax auctions are
once or twice a year; and owner unknown isn’t that
time intensive. Do you think it’s a mistake to be
working on three different approaches at the same
time? If your answer is that I should specialize with
one and really learn it well, I’m kind of looking
beyond that. Suppose I did know all three techniques
sufficiently - would it be a bad idea?
Thanks…
Mike
---* Response ----*-**-
Mike--------------
I think that the three technqiues you are describing have enough overlap that it makes some sense to use all three simultaneously.
Here in CA, almost no properties are “owner unknown.” But there are a few. I suppose maybe 1/200 or so at tax sales will have that designation. Similar, I think, in OK, where I have worked the tax resales for the past four auctions.
I don’t know what makes you think that the “owner unknown” technique is not time intensive. I don’t remember the details of the book or Reed’s descripton of it too well, but I would expect that this would be an extremely time-consuming approach. I would suggest that it does not make sense to go after worthless or low-value properties if it does take a lot of effort, as I believe that this approach does.
I have once or twice tried to do some searching back in records for property ownership similar to the work necessary for owner unknown. I gave up, it was just too much work.
Now, buying those junky properties at tax sales can be very little work, perhaps not even driving around to look at them. I’ve got one parcel about 12 1/2 by 112 ft, I think, in Fresno County CA that I bought at the tax sale. I was there to bid on something else and noticed a real low bid, hurried to the assessor’s office, saw what was obviously a small lot on the assessor’s map. I went back and put up my hand when it came up for bid at $275. Nobody bid against me. Became the proud new owner. There is a lesson there–always be prepared to actually buy what you bid on. Then, after the auction, I went and looked at it. Flat land in an area with middle-middle class homes, well kept up. Then went home. Maybe a total of 40 minutes involved in the purchase. I tried to sell it to the guy who owns the house next door for $1200, he didn’t want to pay that much for it. Still have it. Well, I guess I’ll just have to try to sell it soon.
Anyway, the third technique you mention, letters to out of area owners or vacant land seems like a potentially fine way to go, to me. Same would be true of soliciting people whose properties were in tax default. You could work those two techniques with the same forms, letters, etc. Or very minor revisions for one compared to the other.
When you ask what will happen in terms of tax sales and taxing entities, there can be no answer. Every state has different laws. Different tax collectors have different approaches, some very hard-nosed, some who will never have a tax sale unless it is absolutely required by law, and even then they may avoid doing it. If you work the delinquent property tax parcels in a state you should study the delinquent property tax collection laws and procedures for that state, I feel. Understand that in some states the owner of a property does not get the overage resulting from properties going to tax sale being bid up to more than the taxes owed. In some states they can make a claim for the excess proceeds.
If you buy properties with the owner unknown approach you would probably be doing a quiet title lawsuit to get a marketable title. Or a partition lawsuit if you have gotten some partial ownership interest from an owner or presumptive heirs.
You want to turn over the properties rapidly for quick profits. Whether that can be done buying owner unknown properties or not, I don’t know. I would guess that the only way to force a quick sale is to buy properties which are already delinquent and then ride them through the foreclosure/sale process. Now, here in CA, it is possible to request the tax collector to sell properties which languish on the taxrolls for years without being sold and with no taxes ever being paid on them. Here in Alameda County, where I live I think there are hundreds of these parcels–mostly little unusuable parcels with little or no value. I looked up a dozen or so on the assessors parcel maps a few years ago. Some were “deeded to the state”–ripe for tax auction–over 80 years ago. I was not impressed with those that I researched and did not follow up to study any more.
These days the interest in tax sales properties in CA is very strong. Trying to buy this way is not as good as it used to be. Too many people bidding properties up to very high prices. I haven’t bought a house on CA tax sales in a couple of years.
Good InvestingRon Starr***
Re: Mike: Owner Unknown, Tax Sales, Land? - Posted by mike
Posted by mike on December 16, 2002 at 23:12:45:
Thanks for the answers Ron. Especially about prodding the assessor to sell stuff (great tip) and that the owner unk. ratio at auction appears far lower than what Reed writes. That helps me.
Since the owner unks are likely to end up as tax-takings, that’s why I thought it might be good to apply the research to buy interests prior to the auction for the dogs that aren’t as valuable outright. It’s not that I wanted to buy them at auction, I wanted to own them before the auction (the excess proceeds). But I may have gotten the wrong impression from Reed. It seems a shame to let land just sit because everybody thinks it’s “worthless.” You’re helping by answering my questions because I’d like to make my own assessment before I just agree with everybody that yes indeed, it is worthless. I’m going to do more homework, possibly try it out then let you know what happened.
What I meant by owner unk. not being time-intensive is that it’s spikey. These things are not abundant therefore there’s no continous stream of parcels to research. You find something good, then yeah, you’re busy researching. The rest of the time you’re schlepping around for another good one. That’s what I mean by not being time-intensive and since schlepping is the easy part, it’s why I hoped you’d think the three could be dovetailed.
Reed writes that in one instance Segel found three parcels and identified the owners in one day. Of course he has a lot of experience but if he can do it so can somebody else. I don’t think these are necessarily a time-sink by default.
Thanks!
Mike
Re: Mike: Owner Unknown, Tax Sales, Land? - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on December 17, 2002 at 13:51:14:
Mike---------
Ok, I understand you now. Yes, the owner unknowns could be done on a flexible schedule. There are probably no other investor working on those properties, so there is unlikely to be any time pressure. Not like the foreclosures, where you have to get your research done very quickly before a deadline.
Good InvestingRon Starr**
Today’s top creative idea, I think - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on December 17, 2002 at 21:08:54:
Mark–(WV)----------
Hmmm. Thanks for the idea.
Seems like you are the creative real estate investor of the day. At least in my estimation.
Good Investing and Good SuggestingRon Starr
Re: Mike: Owner Unknown, Tax Sales, Land? - Posted by Mark-WV
Posted by Mark-WV on December 17, 2002 at 20:54:01:
Ron, I once owned a property like yours, guy accross road laughed when I tried to sell it to him. I waited a couple of years then went over and started marking it off in parcels. He came over and said "whats up " I said “oh not much just looking to set a couple of hud mobiles here” I didn’t get my coat off at the house when the phone rang. Sold the lot for three times what I offered it to him before !!
Best wishs and Merry Christmas
Mark R.