Looking for ways to approach homeowners behind on there taxes.

You can view the home owners as potentially motivated sellers and contact them prior to the tax auction. The current owners may be willing to sell, you will need to look at each property for its FMV and whether it would be profitable for you and what may be owed on the property in addition to the delinquent taxes. Sometimes it is better to let the property go through the tax sale which should eliminate the other claims on the property.

Thats exactly what I wanted to know. Makes alot of sense letting it go throught the tax sales auction. In my county there is no redemption period.The owners can redeem up until the auction. Now when I get in contact with a homeowner, I do construct a deal the same as a homeowner in foreclosure, to try to at least help them get something out of the deal rather than lose everything? Also auctions start at the amount of back taxes owed. So I may still got the auction and see what happens. I think its a great way to get property really low to rehabb and/or sell to other investors which is my plan for now. The I would like to tackle some rehabb projects of my own after I build some capital I can work with and live off of, and reinvest. I am just tracking the list and tracking properties I am interested in. Thanks coach.
Kingjuss,

If you are working with them prior to the auction, you are correct, construct a deal that gets you the title and if they require it give them some money to walk away. Be sure your contract specifies that you get good title to the property and have title work done to protect your purchase. I think attending the auction is a good idea, even if you aren't prepared to actually make a purchase this time.

What if you find a property that has already been sold... and you want it? Could you approach the home owner (who can still redeem the property) and work out a deal to deed the property over to you if you pay the back taxes, etc?

I found a condo that is worth 150K and looks like it may owe no more than 10K to redeem the property. (I'll contact the lawyer tomorrow to find out exactly what is owed) Would any of you do it?

So, this is what I am hearing. If a house goes into a tax sale there is no longer a mortgage on the property? If that is the case WOW. I just saw a list yesterday of tons of properties my county was auctioning the liens to, anywhere from a few hundred to a few thousand. This could turn out to be a gold mine if you do your homework. Thanks for the info. Great posts.

Thanks,
Tim

"If you always do what you've always done you will always get what you've always got."

Ps. 34:4 I sought the Lord, and He heard me, And delivered me from all my fears.

You can check to see if the property has a lien/mortgage. Odds are, if it makes it all the way to auction either:

1) There is no mortgage - it is owned outright.
2) The taxes exceed the balance of the mortgage (probably uncommon situation).

First, many mortgages pay the taxes themselves through a mortgage escrow account. The bank keeps taxes current through mortgage payments so the home never goes to the state. Instead, they keep paying taxes and foreclose on it to protect their interest in the mortgage they loaned.

A bank would rather shell out $2,000 for taxes then lose a home that has a $100,000 balance on the mortgage, even if they could only see it for $30,000. The math only makes sense to do so.

I would contact the owners, there is nothing to lose by doing so. If they want to stay but can't pay taxes you could offer a lease back. Generally you would probably have a better shot getting a solid deal with a willing owner prior to tax sale. Tax sales, at least in the areas I have worked, are very competitive and have networks of investors that keep newcomers from invading their turf by bundling together to force people out of good deals. Other areas might be different, I live in a metropolitan, so less populated areas might not have the same competition, but there will likely be some savvy investors willing to fight for good deals.

Also, I recall at least some of the auction required the property paid in full within 24 hours I think - and a pretty solid deposit on the spot. In those it leaves cash buyers or people with sizable lines of instant credit. If your auction has similar rules and you do not have the means to arrange the money then making a deal with the owner is probably the way to go.

To put it in perspective, despite what some commercials say, I have yet to meet anyone or see any house that was bought for $300 or some next to nothing price at auction. The auctions can offer a great discount, but there are no $150,000 homes going for $2,000 or something like that. The deals can sometimes be on par with the ideal discounts of 40-60% below FMV that we try to get with foreclosures. The only way I see sneaking out a crazy deal like buying a decent home for $3,500 is a combination of a small county and pure luck - like the people who normally attend happen to all be out of town on vacation or something.

Not to say it isn't possible, but from all reports I have been able to ascertain it isn't realistic. Maybe someone can relight my interest in tax sales with some exciting, and repeatable reports on deals.

People I don't even go to tax sales anymore! Reason is I Contact The Property owners off the tax sale list.And I do It all by mail or phone! But you have to be careful and not talk them into keeping the property. The people are usually nice and see you as a way out from an unwanted property. I was nervous the first few times but I kept on calling on down the list and got better the more I did it. And you will too!

I believe this is a great option to explore. It sounds quite interesting. Maybe taking a stroll to the court house might be a good idea. Thanks for the info.

Sandra

Saundra take that stroll. My Dear.

Darrell,
Could you please share with us some information on the calls that you make. How do you open the conversation over the phone?
What questions and information do you required?
What is your approach?
What prep work do you look for prior to making your call?
Thanks,
Mati

This is how my phone call to deliquent property owners starts like this:
Owner:Hello
Me: Yes is this Mr. Crews?
Owner:yes it is who wants to know?
Me: Yes My name is Darrell and I'm a property investor.
Owner: What can I do for you Mr. Darrell?
Me: Mr Crews I am interested in the peice of property that you own In Crenshaw county. And I was wondering what your plans where for the property
Owner: Well there is a story behind that property Blah Blah.
Me: Mr. Crews I bought your property from a tax sale and I was hoping that you would like to sign over the deed to me?
Owner: Yes I would I will sign over the deed for $500?
Me: I'll have the paper work drawn up and see you Sat. with your money! By this time my heart was pounding and I made my 1st deal.Well it was that simple. If you need me to call some of the property owners I will We will work out some kind of deal. Hope I have help you! Good Luck>

hi darrel,

im confused with your response. you said that you bought Mr Crews property from a tax sale and was hoping that he would sign over the deed to you?

Did you buy Mr Crews lien of deed? Assuming the deed, why do you need him to sign anything to you?

well i appreciate all the info. now i'm a new commer with a property to sale.

he did this before the tax auction.he offered him money to sighn over the deed and still make 5oo .he was going to lose it anyway at the auction. and make nothing.

when you buy a property at a tax sale the owners still have an amount of time to pay you what you paid off. It's like six months or a year. But if they don't pay you back in full you get the property. It's like buying something in advance, but you always take the chance because the property owner could just pay it back, you're not out anything you just had to wait a year to get your money back. Some states don't have any grace period, so if you buy a tax sale there you own it right away. Off hand I can't remember which states are which, but from what I have read past due taxes usually trump any other loans on the property.

Also IRS leins always remain with the property that went to tax auction. That IRS lien has to be paid off before anything. They take first position and forever position until paid off. Those IRS liens follow you around like a little puppy dog.
Also after a house has went to auction and someone purchases it...they are guaranteed something like 42% interest by the US Goverment payable by YOU ...if you come back to redeem. Also you will have filing fees to pay plus any kind of liens the city may attach for their efforts in filing paperwork to get the property put on the auction block. It can add up to a lot of cash pretty quickly.
I know a lot of investors who buy these properties simply as a way to have money sitting there collecting big big interest payment. That is a lot better than interest from a bank and it if guaranteed by our goverment. How great is that!?! If you don't come back and get the property the investor will just sell quickly for a good profit.

the amount of time allotted to pay back the highest bidder varies from state to state. Only some of the states grant this delinquent owner the right to redeem.

Deed States:
Alaska
Hawaii
Massachusetts
New Mexico
Oregon
Texas
Wisconsin
Arkansas
Idaho
Michigan
New York
Pennsylvania
Utah
California
Kansas
Minnesota
North Carolina
South Carolina
Virginia
Delaware
Maine
Nevada
North Dakota
Tennessee
Washington

Lien States:
Alabama
Oklahoma
Maryland
New Jersey
Wyoming
Arizona
Illinois
Mississippi
Rhode Island
Colorado
Iowa
Missouri
South Dakota
New Hampshire
Kentucky
Nebraska
West Virginia

Hybrid States:
Conneticut
Ohio
Florida
Vermont
Indiana
Washington DC
Louisianna
Montana

Tax Lien Sales: after a period of time if taxes remain delinquent, then purchaser can foreclose on their lien in hopes of attaining ownership of a property
Tax Deed sale: delinquent property owner has the right of redemption before the sale
Redeemable Deed Sale: delinquent owner has the right of redemption for a specified time amount after the sale.
try these links
http://www.sco.ca.gov/col/taxinfo/tcs/pubauctions/index.htm
http://treasurer.maricopa.gov/
http://www.boonecountyky.org/SO/DelinquentTaxes.aspx
http://www.cosl.org/ according to the book I have Arkansas properties can be obtained for as much as 70% off fmv price, and usually tax value for a delinquent sale is 20-30% fmv price, and tax value is usually lower than fmv. Arkansas has a limited period of redemption, something like 30 days

In Texas properties appraised by the county as aggricultural use the redemption period is 2 years but for other types of properties it's 6 months.I think homesteaded properties fall in the ag category
http://www.hctax.info/ (one county in texas)

In almost all tax certificate states the amount of money the investor paid for the tax certificate must be paid back with interest by the property owner or some other party having legal or equitable interest in the property on behalf of the property owner. The interest rate which must be paid is often very high.
In Deed Tax sale states, the real property itself is sold and the investor gets the deed to the property, however in some states (using the oral bid auction system) the investor gets a deed encumbered by a so-called right of redemption, or right to buy back the property, usually about 6 months and a penalty tax of 25% of the amount the investor paid.
You either get the property or a good return for your investment.
Real Property Tax Lien Foreclosure Sales typically present the opportunities to buy property for a few pennies on the dollar. The opening bids are usually very affordable.
Some tax certificates can be purchased over the counter as well, Oklahoma had some like that.

You just have to check each state or county and see what their guidelines are. I'm not sure if anyone knows this but provinces in Canada operate this way as well.
In some Deed states the tax sale is a public bid auction tax sale but is not a forclosure tax sale.
You can also buy the property at the tax sale and turn around and sell it back to the property owner that had it foreclosed in the first place ( such as getting it in a foreclosure tax sale state like California). Getting these properties for a decently low price means only a few people showing up to these sales. It's a good idea to go and check out a few of them so you can get an idea of how it works, and the amount of bidders who show up, etc.

In some instances you can take posession of the tax lien property you have bought by taking title under adverse possession. A process whereby one person can obtain the ownership of another person's real estate where, presumably, the owner has abandoned the property. This is done in a manner prescribed by law. The law governing adverse possession is local state law.You must look up the law of the state or canadian territory where the real property is located. You should contact a knowledgeable attorney before attempting to do so. Don't just assume that a property is abandoned just because it is vacant.

I think if you purchased a property at a tax sale, and you have to wait 6months or a year to get your money back or the property, and you can get the owner to just sign the deed over for a small price it's worth it because you can be making money on it instead of having your money float in limbo. Remember time is money!

http://www.hctax.info/prop_sales/cover_pages/71791.pdf

min bid 609.61 value 1780, and you pay tax of 46.57
I think it's a lot but you can see there are some cheap properties, this is in texas

Thanks for sharing

So am I correct that Kansas does not have redemtion period, I belive that to be true.

If that person has a mortgage, it is my understanding that they would NOT be able to sign the deed over to you because the bank holds the deed until the mortgage is paid off. Is this true? Or should I start making phone calls in the morning?

I justbought my first tax lien a couple months ago. PLEASE get back to me AS SOON AS POSSIBLE with this info. )

Hey there - if the person's property has been sold at a deed sale/auction, then the mortgage is eliminated. The sample phone call that was posted above was for a deed he purchased in a county that allows the prior owner time to still come in and pay what they owed. Many counties do not allow this grace period after the deed was auctioned off. So it's a county by county deal.

I just purchased a list of deeds up for tax sale in October. When it arrives, I plan on reviewing the list in attempts of finding out if there are mortgages due, and if NOT, I've got to come up with a strategy to create a win-win. I think this could mean finding the name of an investor that would buy the home for back taxes, allow the family to remain in the house, and just give me a finders fee. Any thoughts or experiences in doing such?

Thanks to the coach for all the info, you are darned skippy about it,

If, I'm not mistaken, there's a company that sale list of "State Tax Lien Sales" per state. You pay for this list based on which state you want, to include the requirements from those states. The IRS use to have a hotline number where you could call, requesting sale information on property, seized my them. Normally, property; Real Estate, Personal or Business Property is advertised by the Revenue Officer conducting the sale (forced sell value) but there will be a redemption period, normally six months for real estate and they required full many at time of sale. There's a lot of knowledge on this site! This is how "We The People" should be.

Norman

Sorry, but I'm a newbie at this too. I'm just curious. I would think if property taxes aren't being paid, probably mortgage isn't either. If you go to the property owner before the sale and he agrees with your offer but has a mortgage, where is the benefit? And if there is a mortgage, the property owner can't just sign it over to you, can he/she? Doesn't the bank hold the deed on it until purchased?

Lori

Thanks for sharing.Tax liens would be great if those savy investors would step aside, and give the new ones a chance.But still can be checked out.

is there a law that states you can'nt contact the owner of the property?