I am preparing to go to my first tax auction at the country courthouse in a couple of weeks and purchase my first investment property. I’ve been doing a lot of research and the more I read, the more confused I get and I am hoping that someone here can simplify the whole process.
First of all, I live in Missouri. I understand that this is a tax lien certificate state and so the at the auction I will be purchasing a tax lien certificate. What I do not understand, is what exactly does that mean? I think I understand it to mean that I will pay the taxes on the property and the owner will then be liable to pay me with interest and if they do not in a certain period of time, I will own the property. Is this correct? I also read something about a first, second, and third auctions on the same property and there are different redemption periods each time. What is that about?
I cannot seem to figure out how long the redemption period is here in Missouri - I’ve read 6 months to year and then I’ve read 90 days. I have read the RSMO-Chapter 140, but I am still clueless. What I want to know is this, if I win the bid at the auction, do I own the property? If I own the property, when can I take possession of the property?
Finally, what can I expect when I go to the auction? Will there be an auctioneer and a bidding war going on or will it be a silent auction with sealed bids?
I know these probably seem like stupid questions, but like I said I’m very new at this. What I really need is a person, book, or something to just explain the Missouri tax lien laws in layman terms. Just really make simple - talk to me like I’m a first grader, that would be really great! ;D
Adding to TMCG’s response – if you don’t understand the investment yet, don’t make the investment! You should understand every nuance of every RE investment that you make…otherwise, you’re courting disaster!
The reason why I wanted to go to this auction and start bidding is because two properties that I have been interested in for a while are actually on the auction block and this just happens to coincide with me coming into a nice little chunk of money.
Normally, I would not dream of jumping into anything without having researched it and felt comfortable with my knowledge base, but I just really, really want both or one of these properties.
Just wanted to clarify. I didn’t want you guys to think I was going off half-cocked so to speak.
I will definitely check out the book by Larry Loftis and it might be that this upcoming auction may simply be a learning experience for me and I won’t end up with the property, but either way I hope to learn a lot!
Know your limits and know your price before you go to the auction. The last thing you want to do is get caught up in a frenzy.
You also mention that you really want “these” properties…what is your goal for this? With any property you never want any emotional attachment. A property is a property and a deal is a deal. If the numbers work out it shouldn’t matter what type of property it is.
With any property you never want any emotional attachment. A property is a property and a deal is a deal. If the numbers work out it shouldn't matter what type of property it is.
i think that’s a great point. it works both ways too - you don’t want it to be an emotional decision that says, “no” - for example - if it’s a mobile home unit or units - i used to think “no way” when it came to certain investments, but after you really look at them without emotion and base decisions on due diligence - it’s like seeing the world in a different way. things make sense - rationally.
what is is about these properties - specifically that you makes you go “googoogaga” over?
