Here is the situation:
1 - I am planning to buy a property at an auction in California
2 - I check the APN on the county records and there is NO IRS lien
3 - However, if I check the records of the current owner of the house, he has an IRS lien.
If I buy the house…will it come with the IRS lien? or the previous owner keeps it with him?
How can I find out whether the IRS lien he has was paid off or not?
Thank you!
Hi,
Always stuck to the person and by law the persons tangible assets!
It is always possible that even though a lien does not show on record the IRS has a all encompassing lien to any and all assets and does not specifically realize that this property belongs to thier debtor, but has rights to recover in all or in part financially from this property!
There is no way you can find out actual payment history or whether debtor has or has not paid his lien as it is not public information with the IRS and there is no service or data base with IRS information on lien holders payments or history in existance other than what’s strictly available to IRS Agents or the Federal Court!
How come out of the 50 states and 1500 plus counties in the US do you insist on going after any property where you know there’s a possibility of an IRS lien, I am just puzzled as I generally don’t go looking for that kind of trouble???
I can take you to auctions all over the country with properties without IRS liens, or any other lien besides the property tax it’s being sold for! You could get as much of an adrenaline rush building a bed and breakfast in Afganistan!
Hell, if your looking for excitement take your wife out shopping!!!
GR
“How come out of the 50 states and 1500 plus counties in the US do you insist on going after any property where you know there’s a possibility of an IRS lien, I am just puzzled as I generally don’t go looking for that kind of trouble???”
Ideally I would like to buy a place where I live so that I can manage it as a landlord. I checked several counties in California for tax deed sales and each time the owner pays just before the auction…or the place as an IRS lien. This is frustrating.
Which site would you recommend for auction? Or do you mean being on-site for an auction?
I am not quite sure how to buy a place without being present and then flip it without ever showing up there. Any recommendation?
Hi,
Being on site for auction as everything is sold, you know who your bidding against and your in control of what you bid on!
Every auction furnishes a list of properties being auctioned and the starting bid amount weeks before an auction. Any auction I attend I get into town a couple of days early and from sun up to sun down we drive from address to address and actually see the property, we will get out, take photo’s, enter the property if we can find a way or if a lock box has been furnished and the auction published the code, and we will see 3 or 4 properties every hour.
In 12 hours we can see 35 to 40 properties, so if I intend to see 40, I have to get into town 1.5 days early. If I want to review 120 properties I have to get into town 3.5 days early. I have a professional construction background so it is easy to assign a budget to repairs and by computer (Internet connection, laptop in vehicle, printer in vehicle, camera and digital recording device it is easy to take quick notes and move from property to property quickly.
I generally take at least one associate to the auction and sometimes 2 or 3, we work the various parts of defining current value, estimating repair (Rehab) cost’s and defining ARV of each property.
When the auction starts I have a list in the same order properties will be auctioned and I have determined what I am willing to spend, I do not go over my defined budget and it is especially easy for a new auction investor to get caught in the heat of the auction and bid up only to have the property dropped on you at the last minute, every unsuspecting uneducated newby investor finds this out the hard way unless they know better! (And are very controlled)
The owner does not necessarily pay before the auction, how come you can’t find out the property owner and contact them directly before there right to redeem it expires!!! (Did you read between the lines there, I just gave you one of the biggest investor auction tricks in the books!!!) did you pay attention to that???
You see probable more than half of all redeemed properties aren’t redeemed by the owner but rather by cash provided in escrow by a buyer cutting a deal with the tax debtor before the auction and the auction redemption period expires!!!
If I don’t have any money, I am about to lose my property for $1000 in back taxes, my property is worth $5k at auction (Or that’s what my bidding maximum would be) then couldn’t I contact the property owner directly and cut a deal to buy the property for $2500 cash and I will pay the escrow cost’s!
Now not all sellers are this easy, some are to proud of there property and to unsmart to make a decision and end up losing there property for $1000 dollars!
Aren’t you in the area around Vacaville? Sacramento and Stockton are prime area’s for great rentals, just take the time to understand neighborhoods as there are some there that are war zones!
If you say lived in Danville you would be bidding on prime property, against everyone and there brother with money, a property with say $25k owed in back taxes could sell for $500k in Danville at auction, and of course be worth close to a $1m dollars! So you have to pick and choose less desireable neighborhoods and houses or go out and buy an REO, you could get one in good condition for 70 cents on the dollar!
I still suspect California home values will not really start firming up for about 2 more years, so I think if I was still buying in California I would be flipping them rather than looking for rentals, and I wait until the financial crisis is changing for the better and signs the economy is changing have occured!
Then in that absolute bottom as markets are firming and hope prices start rising I would then buy rentals!
GR
The properties I was interested in at the Tax Deed Sales got delisted 2 hours before the deadline because the owners paid their property taxes…ahhhh…good for them, but so frustrated for me as I did all the research.
I was interested in Tax Deed Auctions. Are those the one you refer to? If not, which Auction are you referring to? Any advice on which one to go to?
You mention Stockton and Sacramento, but there is no more Tax Deed auction there.
More than likely you won’t end up saddled with an IRS tax debt. But why chance it? I would move on to the next property.
Have you considered over the counter buying of deed? Over the counter deed is when not all the houses or properties sell at the tax deed sale. In this situation all you have to do is walk into the county office and buy the houses.