Tax Sale Properties

[frani810]

What is the name of your state?What is the name of your state? PA

Hello, I'm seeing an infomercial this morning on buying tax sale properties for ridiculously low prices and reselling them for profitable returns. Is that true? Can you enlighten me on this or direct me to a source?

[seniorjudge]

Originally Posted by frani810

What is the name of your state?What is the name of your state? PA

Hello, I'm seeing an infomercial this morning on buying tax sale properties for ridiculously low prices and reselling them for profitable returns. Is that true? Can you enlighten me on this or direct me to a source?

If you want to buy tax sale properties, you need a survey, title report from a title insurance company, and a lawyer to file a quiet title suit once the redemption period for the prior owner expires.

[frani810]

This is all new to me; however, income investing I feel is becoming a necessity. Please explain further. Redemption period for previous owner? How do you get the title? a survey?

[HomeGuru]

Originally Posted by seniorjudge

If you want to buy tax sale properties, you need a survey, title report from a title insurance company, and a lawyer to file a quiet title suit once the redemption period for the prior owner expires.

**A: what about home, pest and environmental inspections, building permit record search etc**************?

[efflandt]

It is not quite as quick and easy as it sounds, and varies by state and county. The tax and home prices on some of those infomercials seem somewhat dated. If you contact a county or whoever collects the property tax where you are interested, they could tell you want they do about delinquent taxes. The county might have a website.

In some states, like WI, property with delinquent taxes goes to the county, who typically offers it for fair market value.

In IL, my county lists all property with deliquent taxes for the year on their website, and has a tax sale late Oct/early Nov. I think you have to post a bond or have the cash to participate. If you win, you have to go through a 2 yr waiting period, with you making state required notifications to the owner. If they pay tax and penalty within that time, you get back the tax and penalty. If they do not, then you can eventually get title. But I have not researched who pays taxes duing the 2 yr holding period, and if the owner or you does not pay those, would it go to another tax sale? You might end up having to pay taxes for a few years before getting title (deliquent year plus 2 years).

For a PA example see [url]http://www.co.wayne.pa.us/?pageid=39[/url] or Google "delinquent property tax pennsylvania".

[frani810]

Silly infomercials. I don't know the name of the guy who was selling the "kit" for 39.99. But for 39.99, you could get his "system" on buying properties for as low as $500s or $700s and re-selling them for thousands - all profitable income.

[acmb05]

Originally Posted by frani810

Silly infomercials. I don't know the name of the guy who was selling the "kit" for 39.99. But for 39.99, you could get his "system" on buying properties for as low as $500s or $700s and re-selling them for thousands - all profitable income.

You are thinking of Carlton Sheets. He is a scam man, do not buy his programs cause they will then overcharge your credit card for thousands and good luck getting it back.

His system is so far outdated it is not even funny.

Once you purchase a tax certificate you would have to wait 1 to 2 years ( some cases it is 6 months) at that time if the owner has not paid you the back taxes and penalties plus interest you can take ownership of the property. As someone mentioned this is also a long drawn out process.

If the stsate requires you to wait 2 years then you have right of first refusal the following year if owner does not pay again.

This can be a way to get a house fairly cheap but it can also take a few years to do it.

[acmb05]

I will add that this is also a decent way to make a few bucks if you have the extra cash to spend and wait. Most people just forget about or the estate forgets to pay taxes on time. So you buy the tax certificate(some states dont sell them) Some sell them at auction and some you just go to the courthouse and ask to see them.

You pay the taxes owed and when the owner does finally pay you get the money plus Interest that has accumulated. Depending on the state you can charge up to 28% interest.

[frani810]

this sounds like a full time job that costs a lot of time and money before there are any results. thank you to everyone for enlightening me. any other means of income investing out there?

[seniorjudge]

Originally Posted by frani810

this sounds like a full time job that costs a lot of time and money before there are any results. thank you to everyone for enlightening me. any other means of income investing out there?

Q: any other means of income investing out there?

A: Buy shares of blue chip stocks and don't touch them for 20 years (reinvest the dividends). It works.

[acmb05]

Originally Posted by frani810

this sounds like a full time job that costs a lot of time and money before there are any results. thank you to everyone for enlightening me. any other means of income investing out there?

I have several ways of making some money on the internet if you send me a message I will email you a couple.

Mine are all actual items I sell no MLM you cant make any money in MLM on the net unless you have a lot of money up front.

As the poster above said also. Blue chip stocks are a great investment.

[bell345]

My experience with tax deed sales was this: in my area of the country, when there're a tax sale, a lot of people show up. This drives the price up. Most of the good properties are removed (paid up) before the auction starts. Most of the stuff left are marginal properties or just plain junk real estate. If there're something half way decent (and I MEAN HALF WAY decent) it's usually bid up much higher than you would want to pay. Once in a while you can get lucky and get something good, but this is getting to be less and less as more people find out about this. Extremely competitive.

Once I talked to a retired gentleman in Greensburg PA. They were auctioning a lot of old trailers for around $500.00. He said he had 15 of them and didn't know what to do with them and asked if I was interested in buying some. Went to one in Toledo Ohio. Unbuildable lots were bid up 60% of there tax value. Most of the stuff in Detroit was in horrible neightborhoods, you'd be scared to get out of your car. Also in Detroit, a lot of BURNED UP HOUSES. You know why you get a lot of this real estate at auctions? - bad economy, declining areas, poor neightborhoods ect.

I remember I went to a auction in Malone NY, when I went to look at the properties (some looked good in the pictures) I almost threw up, very depressed areas. I remember a apartment went for $100 dollars - I found out why, it was a shell of a building that needed to be demolished to do anything with it. And by the way, you wouldn't want to do anything with it because it was in a poor declining area. One big house I looked at was old but in fair condition, but it was pretty much in the middle of a cemetery! Most of the houses were in very bad condition, ready to be condemed.

Was suprised at Wellsboro PA, some locals were biding up properties way over their tax value. It was next to some property that they already owned. This is where a tax sale can be valuable to you. Many properties were "no bid" and were small parcels that few people could anything with.

I remember a house in Albion MI was on Ebay. We went to go look at it as it was only an hour away. The city told me it was purchased at a tax sale for about 700.00. The guy who purchased it couldn't even sell it!!. Went back about two months later, it said: Free House and it had a number to call. I found out why, $4000.00 demolistion order from City of Albion for a garage on the property that was ready to fall down. The house was condemned and if you figured the cost to demolish the house and the value of the small lot it was on, I figured it be worth (-3000.00). You figured right, it was on the poor side of town. We actually went inside. Was built in 1896, the floor had a big hill in it and lots of water damage. Made me almost throw up because of the mold smell.

In Warren PA went to a sale. I didn't have time to look at any of the properties, so I just went to the auction. A gentleman in back of me was bidding on some properties. He would say (out loud during the auction) that none of the properties he was interested in he was able to buy because they were bid up too high and kept saying that the people were crazy for paying so high for marginal properties.

Some professionals on Ebay are making money at them. Like anything else, a lot of hard work, time, KNOWLEDGE ect. I'm not sure how they get the house so cheap, (bulk purchases, large sums of money I think) but they do it. By the way, I could start a whole new thread on what I learned about some of the Ebay houses that I looked at in my area.

You won't believe this. I know of a person who got a TAX DEED from a small town in Mississippi. No attorney in town would take the case to foreclose on the house. For some strange reason all of them got scared when you wanted to foreclose on a tax deed when the former owner was still in the house. If you ever do this make sure the property is worth at least 75,000 and you have lots of money to spend on an attorney.

I read some stuff how you can make all kinds of money doing this - not in my part of the country - maybe in yours. I think you could make money 20 years ago, I don't think I will go to any more tax deed sales as most of the property was junk or marginal or bid up too high. I never went to the tax certificate sales, so maybe those are better. That was my experience. Not like they tell you in the books and tapes! Not saying you cannot make money, but like most anything else - it won't be easy.

I would be very very wary of ANYTHING finanacial on a infomercial. Food and household stuff is ok. The only place you'll find things easy about a tax sale property is if you get extremely lucky or at the informercial as the sales person is trying to convince you how great and easy their program is. Personnaly, after going to several tax sales, I don't beleive the testimonies of people that purchased nice looking houses at tax sales like you see on TV infomercials for pennies. I think their paid to say these things.

I've read and heard several places, that these low priced courses are just the sucker bait. Once they know you have a credit card they pester you with sales people trying to sell you 2000.00 - 3000.00 "coaching programs" I have to laught because as I type this there're a informercial right now on TV showing these nice looking houses that people suppost to have purchased for pennies on the dollars. I laught because I compare that to what I've experienced and they make out that this is the norm at a tax sale!!!

[bell345]

Originally Posted by seniorjudge

Q: any other means of income investing out there?

A: Buy shares of blue chip stocks and don't touch them for 20 years (reinvest the dividends). It works.

Be careful you stay away from blue chips like PFE MRK AT&T because unless you dollar cost average, you may not break even in your lifetime.

[HomeGuru]

Originally Posted by bell345

Be careful you stay away from blue chips like PFE MRK AT&T because unless you dollar cost average, you may not break even in your lifetime.

**A: Personally, I like those purple chips with a robust salsa.