Hi,
I live in east Michigan and we are in the same boat as the original poster.
We have gone to county tax auctions in the past and have ready made out well. One word of caution though most of these are total rehabs.
If you can buy it for 4-8 grand put 15,000 into it do you have to flip it? Why not just rent it? Many banks will loan you 80% of arv if you own it out right. And you would because tax auctions are all cash.
We purchased one for 7,800. the as is value was 88,000. the bank told us they would loan us around 50,000. We took only what we needed and borrowed 20,000.
Our payment is 295.00 per month for 10 years. We rent it out for 1200.00 per month (its a two unit).
A word of warning…Tax houses are usually ugly, animal infested, stinky, someytimes moldy, and very very stinky,
did I say stinky?
Do your due diligence and check out any property you want to bid on. The list of addresses will be on their website. Sometimes you can even sneak a peak inside but be sure you take a screw driver (they are boarded up).
Also you can find awsom deals at the land bank of michigan…just do a google search.
Don’t let asking price fool you. They want to get rid of these houses and will take much less then the already low asking price.
Hope this gave you a few more ideas.
Wendy
curious how u get bank loan on properties that u bought @ tax auction ,
How does a bank lend when u dont get clear title w/ tax deeds??? ???
The loan amount we wanted was so low all they wanted was a copy of the tax statement which was in our name, they used the sev’s for the value.
Oh one important fact, the loan officer told us that he could loan us on remodeling but not rehabbing and he was sure that we meant remodel instead of rehab. lol
Yes, I know him but only from a bank relationship and we only had one account through this bank and it was personal.
One very important thing to understand is that his wording for the loan could have disqualified or qualified us.
Get to know your bankers, all of them!!!
Also I’m sure it helped that we were only asking for 20,000 with 60,000. left in equity.
We did have a copy of the deed, quit claim and we also had a sales reciept that we showed him.
I wouldn’t buy anything without recieving a copy of a deed of some sort.
Keep in my the money was not for the purchase of the property. We put that on a charge card.
Wendy
do you buy the tax liens too?
No. I havn’t yet but would like to. I am not very knowledgable in that area.
I found out about tax sales from a cd I ordered in regards to tax lien sales and a small portion of the cd mentioned tax sales, from there I found out about my county auctions and some day hope to invest out of state from these auctions as well.
For now I must keep my full time job as it pays the bills.
However my plan is to pay off all credit cards then save a small stash and break out of this cycle and sell my current business and invest as my means of only income ( outside of my husbands).
Lets face it this job is much more FUN :
i completely understand. i have been full time in this business for many years and this market has changed so i am getting more involved in flippping properties again to balance things out.