Real Estate Investing Forums

Real Estate Investing => Foreclosures, Short Sales, Tax Foreclosures => Topic started by: Cherished on March 22, 2016, 12:31:15 pm

Title: Strategy for selling my tax deed
Post by: Cherished on March 22, 2016, 12:31:15 pm
Hello, I am hoping to receive some guidance on how I can go about selling my interest in a tax deed to an investor.

I recently purchased my first tax deed in the state of Alabama.  I've done all my research and there are no liens outstanding with code enforcement, IRS, city sewage, etc.  The mortgage was never released and when the property went into tax default the mortgage holder did not proceed with foreclosure.  I have made several attempts to do skip tracing to locate the previous owners to no avail; but in AL I would need to wait after the redemption period of 3 years prior to starting the quiet title process.  So at this point, I am highly considering selling my interest in the tax deed to another investor in the area but need some guidance on how I should go about selling my interest to another investor in the area and strategies in determining a fair price?

Thank you, I appreciate your responses.
Title: Re: Strategy for selling my tax deed
Post by: Bill H on March 24, 2016, 03:09:44 pm
A very common problem with tax lien/deed investing/

What do you have of value that is worth someone purchasing?

An uncleared title problem...what is the value?

Possible lack of due process....what is the value?

Piece of property that is very risky to improve...what is the value?

Not being facetious or derogatory but these are some of the risks in tax lein/deed investing.

The main reason I invest SOLELY for the interest/penalties, etc.

My experience, since 1988, has shown that about 95 percent of the tax lien/deed propertys are worth just that...the taxes.

Do not know how much you have invested.   

I acquire similar things every year. 

I contact the adjacent landowners and see if they will purchase it for what I have invested plus a very small profit for my time and energy.

That way at least it is not a total loss.

Results vary from year to year...most of the time I just write it off as a tax loss and move on.

THere is NO facet of real estate investing that I know of that is WITHOUT some risk.
Title: Re: Strategy for selling my tax deed
Post by: earlvandorn on December 30, 2016, 09:32:10 am
Bill H has given very good advice. Investment in tax properties should be solely for the interest. Every once in a while you will end up getting a property, but even then you have a long slog to making it worthwhile. A tax deed is virtually worthless until it has been confirmed by the court. If Alabama requires a three-year waiting period to begin that process, then you will have a very difficult time getting more than the redemption amount for your deed. Right now all the OP has is a free slot machine pull: if the defaulting owners redeem, he is out nothing; if they don't, he gets free land.

I have been to tax sales where inexperienced bidders were bidding huge amounts, clearly thinking they would get the land. They get their money back when the taxes are paid, but essentially earn no interest because their bid was so large. I've also been at sales where greedy people made massive overbids thinking they would get the land in a state where overbids are not returned. These people got an expensive lesson.
Title: Re: Strategy for selling my tax deed
Post by: Gold River on December 31, 2016, 12:22:34 am
Hi,

     I do not bid on or buy tax coupon sales, I have never looked to earn interest on my money!
I only buy at property tax sale auctions where I own that property at the end of that day!

Even at 30% interest a $1,000 dollar investment returns $300 per year or possible $900 over 3 years, while a property tax sale auction
provides instant gratification as a $1,000 dollar property may be worth $3,500 the next day for an investor seeking a fix and flip, or
a fix and hold property.

Normally a tax coupon is bidding down interest rate as the city get's the spread, it may start at 30% but is usually bid down to a much lower
rate of return.

In a tax coupon a quiet title action is required to recover legal title, in a property tax sale auction title is granted by the county that day!

If you have a lot of cash and just seek returns on cash capital a tax coupon affords a return, but it takes time and usually the owner
will redeem the coupon before you can foreclose by quiet title.

If you wanted to sell a $1,000 dollar coupon to me as an investor I would require a discount on that tax coupon to justify buying it.
I get the impression you think you can take a $1,000 dollar tax coupon and add a premium and sell it for say $1,300 dollars.

Factoring never favors an unseasoned investment, your always going to have to discount a coupon to sell it, the coupon by it's self
is not an investment or sellable for a profit. The property tax sale auction provides instant value and an instant return as your buying
real property and selling real property for a profit.

Kansas Cities tax sale auction is in September, Detroit's tax sale auction is in April, you should look for real property tax auctions. Every county has either coupon sales or property tax sales every year.


                       GR
 
Title: Re: Strategy for selling my tax deed
Post by: marksmith on April 09, 2017, 09:26:56 am
Hi,
Know your investment strategy ahead of going to the tax sale. This will help you layout your plans prior to, during and after an auction.
Thanks!!
Title: Re: Strategy for selling my tax deed
Post by: Bill H on April 09, 2017, 06:48:05 pm
GR...... I do not bid on or buy tax coupon sales, I have never looked to earn interest on my money!
I only buy at property tax sale auctions where I own that property at the end of that day!

Goodle and read Jones vs Flowers SCOTUS decision.

Unfortunately we, in the tax deed/lien business DO NOT have immediate clear title ownership anymore.
Title: Re: Strategy for selling my tax deed
Post by: caroline on May 15, 2017, 04:21:40 am
Selling a tax deed property is not always the easiest process to actually sell the property. Before selling a property, you must understand the different types of deeds that you can convey to your buyer.

Quitclaim Deed: - It conveys the sellerís interest in the property to the buyer.It allows one party to transfer property rights and claims to another party.
Bargain and Sale Deed: - This deed transfers ownership of a property from the seller to the buyer.
General Warranty Deed: - This is the most common type of deed in normal, residential sales.  When you bought your personal home, this is most likely the deed that you received.
Special Warranty Deed: - This type of deed issued when you do have clear title to a property
Thanks!!
Title: Re: Strategy for selling my tax deed
Post by: Bill H on May 29, 2017, 03:02:31 pm
Carol9ne....PLEASE DO NOT give  inaccurate information.

Special Warranty deed.....says ONLY that NO INCUMBRANCES SINCE YOU OWNED the property....IT DOES NOT give clear title.


It is VIRTUALLY the same as a QUIT CLAIM deed.
Title: Re: Strategy for selling my tax deed
Post by: Dmccright on June 20, 2017, 09:36:29 am
Carol9ne....PLEASE DO NOT give  inaccurate information.

Special Warranty deed.....says ONLY that NO INCUMBRANCES SINCE YOU OWNED the property....IT DOES NOT give clear title.


It is VIRTUALLY the same as a QUIT CLAIM deed.

Special warranty in my state allows you to get title insurance so it's not the same as a quit claim/bargain deed. Imo with regards to tax leins/deeds if you end up with the property you invested wrong. A true deed auction usually gets over bid and you have to find the gold nuggets in tax liens in my state because it's bit up. Sometimes I sit there and just network because banks buy up everything worth anything.