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Anybody ever participate in a county tax sale? Paging I Love Bama
Posted on 4/10/15 at 9:41 am
Posted on 4/10/15 at 9:41 am
Looking for anyone with experience at a county tax sale.
My basic understanding is:
You buy the "right" to pay the taxes on a tax delinquent property.
Once you do that then the property owner can pay back the back taxes + 12% annually on whatever you paid for the "right" to pay taxes. The county will then (eventually) give you your money back plus 12% return on the money you paid.
Once you pay the taxes for 3 years your name is on the property and you have to get a lawyer to get clear title.
I've done some very preliminary research so feel free to correct anything that is incorrect. Just trying to get some opinions from anyone who has done it.
My basic understanding is:
You buy the "right" to pay the taxes on a tax delinquent property.
Once you do that then the property owner can pay back the back taxes + 12% annually on whatever you paid for the "right" to pay taxes. The county will then (eventually) give you your money back plus 12% return on the money you paid.
Once you pay the taxes for 3 years your name is on the property and you have to get a lawyer to get clear title.
I've done some very preliminary research so feel free to correct anything that is incorrect. Just trying to get some opinions from anyone who has done it.
This post was edited on 4/10/15 at 10:23 am
6
Posted on 4/10/15 at 9:47 am to yellowhammer2098
Have a guy at the office who swears by this. Said he's obtained three properties by doing so, and has never lost a dime.
Seems to good to be true.
Seems to good to be true.
Posted on 4/10/15 at 10:21 am to yellowhammer2098
I Love Bama should have some experience in this. Hopefully he shows up.
Posted on 4/10/15 at 11:03 am to yellowhammer2098
I've been to a sale to watch but I've never bought anything. There are some HEAVY hitters in these things. Guys with well over a million bucks throwing around.
Honestly, I felt a little out of my league.
The interest rate gets bid down so you don't end up with 12%. Each state is different...
I would suggest just going to watch the first few times. You need to know what you are doing.
Honestly, I felt a little out of my league.
The interest rate gets bid down so you don't end up with 12%. Each state is different...
I would suggest just going to watch the first few times. You need to know what you are doing.
This post was edited on 4/10/15 at 11:04 am
Posted on 4/10/15 at 11:08 am to yellowhammer2098
I have some friend and some clients that do these from time to time, usually on a small scale (maybe 1-2 a year).
I also have a client that is part of a partnership that does nothing but these, it's 5 guys and they do about 20 per year.
I've seen two times where they actually ended with property - both times it was residential lots that were only worth a few thousand. By the time they paid the attorney they didn't get too great of a deal and they are having trouble selling the lot.
Most of the time, the property is redeemed a few days before the end of the period. So it's a nice financial gain, but, it is pretty much cash tied up.
I also have a client that is part of a partnership that does nothing but these, it's 5 guys and they do about 20 per year.
I've seen two times where they actually ended with property - both times it was residential lots that were only worth a few thousand. By the time they paid the attorney they didn't get too great of a deal and they are having trouble selling the lot.
Most of the time, the property is redeemed a few days before the end of the period. So it's a nice financial gain, but, it is pretty much cash tied up.
Posted on 4/10/15 at 11:23 am to yellowhammer2098
I've been to a couple of these. I don't know how it is in Alabama but in Mississippi you go and buy the taxes for the properties. You sit in a courthouse room and they go around and ask if you want the property or not. Interest here is 1.5% a month for up to 3 years. What you will profit is the interest paid. So, a tax lien for a year is 18% interest, a $10,000 of tax liens (one property or multiple doesn't matter) for 1 year will net you $1800. Not a bad investment. After three years you can get the property, but don't go into this thinking of it as a good way to get land, very rarely does this happen. This is really a way to invest money.
Posted on 4/11/15 at 11:26 pm to yellowhammer2098
I've done in La for several years now. It is online done by third party now so larger institutional money comes in. In La, you get immediate 5% interest paid on your money if it is redeemed. an addition 1% each month extra so year would be 12% plus the 5% for 17% total. To end up with the property you have to pay taxes 3 years running without it being redeemed and then go through courts etc. I've never ended up with any. I love it when it gets redeemed a week after the auction and I get 5% and all my money right back.
If you can't afford to have your investment tied up for years then stay away. You can't just take your money back out if you need in a couple years if property owners haven't redeemed. And you will be putting more in each year in hopes you can end up with the property.
If you can't afford to have your investment tied up for years then stay away. You can't just take your money back out if you need in a couple years if property owners haven't redeemed. And you will be putting more in each year in hopes you can end up with the property.
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