Tax Sale Process Questions from a newbie investor

Foreclosures, Short Sales, Tax Foreclosures
1

Hi everyone/anyone!

To sum up my story I have been in property management about 10 years now; I started renting single family units then quickly transitioned to multifamily communities and I absolutely love what I do, but I want to explore other areas of real estate. I have been doing some heavy research as of late and I am as ready as I will ever be to actually attempt my first deal.

I am interested in wholesaling (birdogging to start), probates, an foreclosures/preforclosures/short sales, and tax liens/deeds. I am only interested in residential properties at this time . Most research I find myself doing is on tax liens/deeds. The next sale is Aug 8. I’m going to attend, hopefully invest, but I will feel accomplished if I at least make some worthy RE connections, preferably other investors. However, I do not want to lose money in the process.

I have the list of properties being auctioned and I have all the sources to do my due diligence/research. My question is what info do I use to rule out properties I dont want and how do I determine a fair price for the ones I do? What info do I need to be looking at to determine if it is a good investment or not? I know the “basics”, but I need help with the" nitty gritty details". That is usually the info that sinks or swims people in any business transaction, in any industry.

I live in Georgia and only want to invest in my state right now, until I am comfortable. There are no REI clubs/associations/meetings around my area. Any advice or info is much appreciated. Hopefully someone has the answers or can point me in the direction of someone or sources that do! Thanks in advance!

2

What market are you in?

3

Hi,

 When I was buying at the tax sale auctions we generally went into the area 3 or 4 days prior to the published auction start date. We physically went around and saw every property we were interested in, we were checking for "Red Tags", Condition, area, market, demographics, etc. We want to estimate fair market value and determine how much a remodel will cost us, what our costs are and what we need to profit.

Photo’s you typically see may be 5 or 10 years old, may not represent current condition and may not disclose problems. Nothing like buying a property only to find out it’s “Red Tagged” and your required to demo at your cost in 40 days or the city will come in and demo and file a lien against you and the property.

You can stop a red tag by submitting plans for a permit but that obligates you to remodel at your expense, I have known investors who bought a single family for $1,200 and then turning around because of substandard dwelling and be forced to demo the property for $4,500 because the county wanted double that to demo it themselves (County). It was cheapest and easiest way to get out from under the liability.

Total loss over $6,000 dollars. Be careful, ask the building department for there current red tag list? Power, water, sewer and gas can have strict requirements to restore service which can cost more than you bought the house for, remember asbestos and lead based paint remediation requirements for your area.

Some parts of the country don’t yet require professional remediation and encapsulation, but some do!

                  GR