tax sale investing

i just received a list for my counties tax sale. im curious as to the strategies you guys use of which ones to purchase. i understand there’s a few avenues but im looking more along the lines of investing for real estate (and owning) rather than to gain a high interest rate and be paid off.


some additional questions:

  1. what if a tax certificate was purchased the year prior by someone else…who gets rights to the property?

  2. when collecting interest and pay off amount of a homeowner who pays off the tax certificate you purchased, how is this money taxed?

the county has to completely clear the title before it can offer the property up for auction. (in MI anyway) so check the title work at the county building and see if there are any leins against the property (mortgage, etc) I know some title companies wont insure a tax foreclosure.

Do your due diligence before purchasing at auction such as …
1- how many lots do you need to build
2- dont assume the neighbors are going to want to buy the two useless lots you just bought from auction for some ridiculous price.
3- Is the property a conforming property? has it been condemned and what will it take to pull it out of condemned?
4- are there any easements involved with the property other than utilities?
5- Is it a tear down? If so, will they let you rebuild if taken down to the foundation…etc…
6- just because the county map shows a road, doesnt mean there is one so actually go look at the property. Is it on swamp land? etc… just a few tips. generally it went back to taxes for a pretty good reason that couldnt be resolved by the previous owner (unless they died)

Go to the township where the property is located and ask questions, an a lot of them and make sure to include the building inspector.

What state are you in?

NJ :biggrin