Delinquent Property Tax Sales

I guess you are talking about tax lien certificates. I have a friend who does it and I am reading a book about the process currently. It's pretty good so far LINK.

I can honestly say I have never bought them but I have been to the auctions a few times. That 12% usually gets bid down to 6% - 8%. There are usually a few 19 year old kids in there that bid on everything and shell out 50k to give to the county. They are backed by some big dogs. I would go to a few first so you can get the feel for it. Hard to follow the action your first trip.

I know enough about it to know that the late-night infomercials and "wealth without risk" books are nothing but hot air.

Like any kind of investment, there are obviously some people who are making money at it, but there's a reason everyone doesn't do it - in this case, it's time-consuming and won't win you any friends where you buy. Basically, you're preying on people's misfortune and throwing them out of their homes.

quote:

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There's a winner and a loser in the stock market, too.

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That isn't really true, at least not in a zero-sum sense.

I have done this for a number of years in Biloxi, where overbidding is discouraged, keeping the annualized rate at 18%. You need to do it for the return, not the chance to pick up properties. The law favors the delinquent taxpayer if he decides to redeem after the fact, and more often than not the notices or some other statute isn't correctly followed.


Out of around 200 tax sale purchases, I have had the chance to pick up three properties over that time. I sold one to a neighbor for a deep discount, forfeited on one which had a huge cleanup assessment attached, and am holding on to the third waiting on water and sewer. Like I said, I would rather they pay after two years than have to deal with the property.