How to buy tax sale real estate foreclosures


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The purpose of this guide is to introduce the field of of tax sale investing and how to go about finding properties to buy and re-sell or invest in property liens that offer an interest rate return.


People often ask me. what is a tax sale? In its basic sense. a tax sale is a sale of either liens or properties.Different states have different statues and regulations regarding the disposition of tax delinquent real property.Which is to say. some states sell liens that give an interest rate return to the investor. some states sell the property itself to satisfy the back taxes the previous owner(s) failed to pay.In other words. there are Deed sale states and states that only have Lien sales and even a few states that sell both liens and deeds.


Tax sales have a period of time for the current or previous owner(s) called a right of redemption period.This period can be as short as 6 months to as long as 4 years.It is important to note that only lien sales have an owners right of redemption after a tax sale has been completed.The owner(s) must redeem before the sale if the property is located in a Deed sale state,except in Texas,Georgia or Tennessee where the sales are a Deed with a right of redemption.


In Deed sale states when the property is sold,the previous owner loses any right to further pursue the property.However, in some

smaller counties and localities (in deed sale states)deed sales may occur every 2-5 years.Larger metropolitan areas may have sales every month.Liens are sold mainly once a year and sometimes throughout the year in some areas.The county tax collector, treasurer or sheriff usually holds these sales at the county courthouse.Most lien investors are interested in a better than market rate of return on their money,while Deed sale investors are more interested in making a quick return often in a re-sell or renting of the property to another buyer.More often than not. lien sale investing can result in a bigger payoff especially if the property is not redeemed.This is because liens are much cheaper to buy than at a deed sale where the property itself is being sold.


Getting started in tax sales is easy if you follow these simple guidelines (in no particular order)

First. decide what your goals are.If your goal is to build a real estate empire,then get to a deed sale.Two points to remember though. deed sales in smaller counties and areas may offer a better opportunity to get a property at a better price and deed sales in general usually require more cash to get started.If your goal is to get an interest rate return on your hard earned money,then lien sales are the way to go.One point about Lien sales is that attending higher interest lien sale states like Georgia. Texas. Florida. Iowa or Maryland can offer outstanding returns on your money.Do keep in mind that liens arent always redeemed either.


Category: Taxes

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