Tax Sale Information - Posted by RE Multifamily

Real Estate Investing Apartments
1

Posted by Bill H on July 03, 2010 at 14:12:58:

You are correct about the overbid. That is precisely the reason I said get the statutes and READ,READ,READ…,Learn what you are doing.

As to going to the property and getting the deed. I know several people locally who do that.

However, as you said it involves doing title work to insure that there are no liens, etc.

I passed that stage long ago. I DO NOT want the property and if it matures to me I sell it for the interest and fees or let it go back.

I LOVE the THREE to FIVE day work week for the ENTIRE year and the balance of the time to travel the world and especially the North American Continent.

I am in it STRICTLY for the interest and penalties.

Another thing you might try. If a property matures to you, go to the previous owner and have it quit claimed to you…can save you lots of legal work. Liens are no longer a problem…they were wiped clean by the tax sale. Some states require you to foreclose or other legal actions after the tax sale…a quit claim…why go to foreclosure on yorself? Just another short-cut.

Good Luck,
Bill H

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Tax Sale Information - Posted by RE Multifamily

Posted by RE Multifamily on June 30, 2010 at 10:07:38:

I was looking to find someone who is actively involved in Tax Sales (preferably
lien but also interested in deed). I have a few specific questions and would
rather talk through email with someone experienced on the topic. For example,
if you are at an auction, and the interest rates get bid down to 2% or 0% from
18%, how are you supposed to be successful. I would like to get educated on the
topic so I can become actively involved. I read through all the old forum posts in
regards to Tax Sales and learned quite a bit but would like to talk someone who
in 2010 is doing tax liens.

Thank you

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Re: Tax Sale Information - Posted by Bill H

Posted by Bill H on July 01, 2010 at 14:21:53:

I do this for a living and consider myself very successful.

I DO NOT answer private email questions. I WILL try to assist you here on the board for yours and anyone else’s interest.

I am not an attorney, do not play one on TV, just a hard working tax lien investor.

What is your specific question?

Briefely …TAX LIENS…you are payng the delnquent taxes for someone. You get NO ownership or property rights whatsoever. Nothing but interest and penalties unless it matures to you. Then you will get a tax deed from the taxing jurisdiction.

TAX DEEDS…Some states like TX actually give you a deed at the sale. The property is yours to do with as you see fit…SUBJECT TO RIGHTS OF REDEMPTION.

Other states like CA give you the deed and it is then yours.

Redemption periods vary from state to state, some relative short and some very long.

BID UP…You bid up the price you are willing to pay for the lien. YOU DO NOT get anything for the overbid…ONLY…the actual lien accrues interest and penaltiies.

BID DOWN…You bid down the interest rate that you are willing to accept for the lien. The state still collects the interest and they keep the overage.

Some states will not allow you to bid it down to zero.

Best way to learn the business…Go to your local courthouse law library…ask the librarian for all info on tax liens/tax deeds…make copies, go home and READ, READ, READ,…learn what you are getting into.

If you post a question ere, please be aware that I am currently traveling and it may take a day or so for me to reach a library in order to respond.

Good Luck,
Bill H

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Re: Tax Sale Information - Posted by IB (NJ)

Posted by IB (NJ) on June 30, 2010 at 11:01:03:

When a bidder bids down to 0%, he/she is looking to implement one of two strategies (that I know of - may be more) to make money:

  1. The holder of the tax lien at 0% has the first rights of refusal to purchase any subsequent liens at 18%. Thus he/she may end up owning 2 liens with an average return of 9% plus penalties subject to state law.

  2. If he/she has ‘inside information’ on the circumstances surrounding the property (i.e. owner deceased with no apparent heirs) then they may be looking to eventually take possession of the property.

Ib

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Re: Tax Sale Information - Posted by DeedGrabber

Posted by DeedGrabber on July 03, 2010 at 10:45:31:

Bill’s answers are good generally, though there are exceptions to what he said above - for example, overbid, you don’t get anything for the overbid. In Indiana for example, you earn 10% APR for the overbid paid on tax liens.

So make sure to know your state’s systems inside and out before proceeding. Also with tax liens you must often perform precise noticing or your investment could be worthless.

For the past 5 years, rather than participating in tax sales which involves bidding, waiting, legal work, etc., I’ve just approached owners of these properties that are about to be lost and have gotten dozens of great bargains.

Many owners don’t want the property and have decided to let it go. You can often give them $50 for their hassle to sign you a deed and the property’s yours.

However, you must make sure it has clear title and you must pay the taxes due to save the property yourself.