Can anyone give me some general advice when buying at a tax sale. I’m mostly looking at improved property to resell. There’s a couple nice pieces of land but I don’t know what I’d do with them. I’m looking for pitfalls that anyone can point out to me when buying this way.
They require the greater of 20%/20k down and 30 days to fund the rest or you lose the down payment so there’s one piece of risk which I’m aware of.
Thanks,
Mike
Here in Sacramento if you plan on buying from the county at a tax sale you have to have the funds available at registration for the auction. The auction only happens once a year and you hav to pre-register, like I said, with funds available. I would look at the county’s webpage where you are planning to do business and they should provide all the info needed.
Mike,
I can’t help you with the details of tax sales, however, I can tell you they are BIG down here in the south. My husband and I watched one last month on the courthouse steps where there were at least 50 active participants bidding away (mostly contractors as there was a lot of land in that particular auction, most are never that large where I’ve been going). This was so active that there was one guy who was continuously out-bidding by $50 over anyone’s bid. That made EVERYONE mad and finally an officer of the court stepped in and told the gentleman that if he didn’t have the funds to pay the taxes immediately he would be going to jail. That man is a legend, I went to pay the back taxes on a property I purchased and they were talking about him. He also outbid me on a house that day by a $1 over each of my bids. So I bid him up as high as the cash I was holding just for the fun of it. I took $30K of equity out of his pocket He should have known better. It became very obvious he was relying on my research – he did remember me from other auctions, but he almost paid retail (after repairs)-- silly man.
Tax sales are something we are now interested in as well. There is a woman here who is selling four properties, all acquired by a tax sale. They are choice and she has zero intention of going below her very retail price – I’m not sure how she did it, but she’s done well. I wish you luck and look forward to learning this along with you.