If you’ve caught on to the fact that tax property is one of the best ways to make money in real estate (especially in this economy), you’re a step ahead of most new real estate investors. Here are 2 ways to make massive profit buying tax delinquent properties.
1. Buy the property without attending the auction. Most investors don’t exercise this legal way to get tax property – why, is anyone’s guess. The tax sale is not remotely close to the best way to get tax property. You can’t inspect the properties beforehand, and you have to bid against scores of other bidders. You’ll rarely see a nice property sold at tax sale for less than retail value or very close to it.
Buying delinquent tax properties is easiest if you buy directly from the owners – but only after tax sale, during the redemption period. This has given the owner plenty of time to try to pay the taxes off. Now he knows he can’t, and is desperate to sell – or just no longer cares and is ready to let the property go. Either way, this is the time for you to get in and make an offer. Find an owner that no longer cares, and you can pick up deeds for less than $1,000.
Also, by waiting until after tax sale, you’ve weeded out most properties with mortgages, as mortgage companies will bail out the delinquent taxes in order to avoid having the property be sold at tax sale.
2. Go after the huge overages created by tax sale. This is a big one, and it applies to mortgage foreclosures as well. When a bidder bids more at tax sale than was owed, that overage amount is often due back to the owner. But due to owner ignorance and government laziness, the owner often never connects with the overage and moves on. As you might guess, if it sits there long enough the government can seize it.
If you can find these owners and records of their missing funds and act as a liaison between the two, due to a legal loophole almost no one knows about (even those actively working delinquent tax properties!), you can legally charge the owner up to 50% for your service. On overages reaching into the tens of thousands of dollars routinely, especially with the current foreclosure rate, there is a lot of money to be made from these overages. And you can do it all from your home office, anywhere in the world.