Is anyone into Buying Tax Sale Properties?

[HillbillyPapa]

I just started buying tax sale properties a little while back. I think I done pretty good,,,, but will have to wait for 18 months to get the properties completely over into my name for resale. That is,,, if the people which owed the back taxes on the different properties don't come through with- their back taxes/interest/red tape fees,,, and my interest for 18 months.
I got one 10 acre tract of land with them,,,, and I think I can make some pretty nice bucks on it,,,,, if it goes completely through for me!
Anyone else into doing this type stuff,,,, and investing in this manner?

[candy]

I do that hill billy papa .

One piece of advice don't count your chickens before they hatch.

Its always amazing to me that people will step in at the last moment to pay off the debt .

When they could have saved themselves a lot of money and just paid our relatively cheap WV real estate tax's to begin with.

[HillbillyPapa]

How long have you been doing that,, and what got you into that type of investments>? If you don't mind me asking?

[desdawg]

I used to work tax sale properties. There are techniques for contacting the owners before the state or county foreclosure on the back tax bills. Every state has different rules and regualations. A good source for information is http//www.taxsales.com. Roy Stubblefield has published a manual for each of the states. I purchased the AZ manual quite a few years ago and it was relatively inexpensive. I currently own 58 properties here in AZ, many of which were acquired using those techniques.
Since the dot.com stocks crashed many people got into real estate investing so the competition for purchasing inexpensive properties has gotten pretty fierce. I haven't tested the waters lately to see how fierce. I was doing it before that happened but it was a different world then. Most of the undeveloped property you see listed on e-bay was acquired in that fashion so some people are still at it. I tend to buy and hold rather than buy and sell. There is so much growth here in AZ that I believe every area will have it's season. I'm waiting for the right season.

[HillbillyPapa]

Sounds like you are doing pretty good so far desdawg!
I will most likely being doing some more of these properties in 2007, but in our area it only happens in November. I am not really interested in going out of my area for properties. I plan on selling most of the properties that I purchase for a quick turnaround when everything clears up on them. I have already had offers on 2 of them at a pretty nice profit, and plan on most likely letting them go. The worst case would be this---- if these people which are loosing their properties come accross with the money within 15-18 months I think= they can get their properties back from the county! The good part even in that situation will be, that I will get a 21 % return on Interest on what I have paid for them. So, I guess it's just like money in the bank earning interest (I hope), ehhh? My properties are all local to where I live= within 3 miles or so. I may go into it in full swing next November! If I do,, I will be going for about 25 properties at that time. I will think it over long and hard between now and then I guess!
Haven't you sold any of your properties yet,, and how long have you been holding onto them? If you don't mind me asking?

[desdawg]

I have sold some. I traded one to a painter for a paint job. I was able to 5X my money on that one. Some of them weren't worth much when I got them so I am just holding on. Taxes are cheap, about $15 a year so I am just keeping them waiting for their time in the limelite. I have had those for about 5 years. The quick flip qualifies you for a big capital gains tax hit which is another thing to consider. Here in AZ when a property is foreclosed andsold for taxes there is no more redemption period. None of this 15-18 months to come back for another go at it. I have purchased tax lien certificates and collected 16% interest. Almost always those people redeemed their property. In AZ when I purchase a certificate it is then up to me to get an attorney to foreclose to get title. Another difference between state laws. So there are many ways to go at it. A favorite is to do a bulk mailing to the delinquent people and ask them to sell to you before they lose it. Success rate is about one property per 100 letters sent out. I have gotten quite a few properties that way. I paid $40/lot for some. Then I paid the taxes after getting title. Lots of options.

[MYellowRose]

There was a letter in the real estate section of yesterdays paper, in one of those columns, where a man mentioned that after the sale, I believe it was a foreclosure sale, not a tax sale, he contacted the real estate company that owned the home he wanted and bought it directly from them. He got them to pay for a couple of major items and still got the property for something like $19,000 less than he would have paid at the auction. I suggest you guys check into this type of purchase also.

[desdawg]

In my meanderings around the web I ran across this webpage which offers some good free information regarding tax sale properties. The article seems pretty "right on" when describing the process in various states.
http://www.sanco-bg.com/taxsales.htm

[Rafael]

It's not as easy as a lot of outfits make it out to be. I've done it for years and lately the competition is making it difficult to get a good return. You also have to watch out for properties with major problems. And dont let anyone tell you that IRS liens are erased by a tax sale, that is a lie, in the past it was true in certain cases. I get a title report on every property that I will bid on. It is expensive but it will save you money in the long run.
The best way to learn is to buy a cheap property or two in order to understand the process well. THere is no experience like experience.

[anarchy99]

Isn't that kind of messed up taking advantage of someone else's misery? I could see if it was a foreclosure or something. But tax is theft and seems like those buying are aiding the man.

[freedomluver]

Words of caution on this type of income. I personally have seen the real negative side of this issue with neighbors. Hit a financial speed bump and could not pay back the taxes that were due. Long law suits and the neighbors take a negative view when a tax scavenger comes into the neighborhood. there have been acts of violence against them too. The term tax scavenger is used in the Iowa Code and not one I used by the way.
One of these tax certificate purchasers actually bragged to me that he got a house for about $1000 in back taxes. He kicked the disabled 75 yr old couple out (rather than leasing it or renting their home of 50 years back to them) and sold it for $40,000. How can this guy sleep at night? There is always a reason that people do not or can not pay. I'm betting that if the purchasers of these certificates would learn why these properties would come up for sale, they might not be so eager to get into this line of work. If you think about it, only the county really fills their coffers no matter WHO pays the taxes and leaves the guilt trip and legal suits to someone else. Do we own our property outright? who gave the county the authority to tax what they do not own. I do not pay a mortgage....why do I then have to pay the county a rental fee for existing? Lots of questions that I have first hand knowledge of fighting against. I do not believe in them, but that is me. You have to decide how you butter your own bread. Do what you choose. After all, we live in a free society....I think.