Quit attending tax sales.
Surprised? You’ve probably heard that tax deed investing is the next big thing. Millions of dollars are made in the industry each year, and tax foreclosures are absolutely skyrocketing in the current economy. People all over are getting rich buying tax deeds… right?
Hate to be the one to tell you, but if you’re still thinking “tax sale” when you think of tax deed investing, you’re doing it wrong. If you want to get filthy stinking rich investing in real estate, you need to learn how the 1% of seasoned, savvy investors making serious bucks do it– before your competition catches wind of it.
Tax sales suck. There’s too much competition; too many green investors bidding you out of properties you should have had for a great deal. You don’t really know what you’re buying, since you can’t inspect the properties beforehand. You have to pay all cash at the sale, and then wait a year to see if the owners bail out, at which point you’re back to square one. To state it clearly: tax deed investing by attending tax sales is no longer a viable option for investors like you.
If you’re going to compete, you’re going to have to learn and exploit legal loopholes. Your competition doesn’t know these yet, but they will catch on soon enough. In the meantime, with literally thousands of new properties going into tax foreclosure each day, you’ve got a unique window of time to really exploit “the hey” out of this stuff. It’s simple, easy, and will make you money hand over fist– without ever having to waste your time at tax sale ever again.
In most places, during the redemption period after tax sale– the year or so when the delinquent homeowner can still pay off the taxes– it’s still perfectly legal for you to buy that property out from under the tax sale buyer. How? By buying it directly from the owner.
The secret here? If you wait until that window is rapidly closing– say, a month or two prior to the last possible day they can ever pay off their taxes– you’re going to find plenty of owners out there eager to get something, anything, for their property. They’re not always easy to find– by then, many have given up and moved on– but they are almost always very easy to deal with. Sellers don’t get much more desperate than this.
And guess what? The tax sale buyers have already done the hard part for you– researched the properties and decided which ones were worth bidding a lot on. By getting a list of the tax sale results, you can easily figure out which properties you should be going after.
Now for a huge tax deed investing secret: the overages created at the tax sale. Here’s an example. If a bidder at tax sale bids $90,000 for a property, and the taxes owed were only $5,000, there’s now a $85,000 surplus due back to the owner. Owners frequently don’t realize these funds are waiting for them, and they just sit there, uncollected.
The best part is these funds are exempt from money finder laws and limits, if you know when to go after them. Find these funds and you’ll be able make a deal with their owners to collect on their behalf, for just about any reasonable finder’s fee you want.