DeedGrabber Mini Course Day 1
“Buying at Tax Sale Doesn’t Work!”
Thanks for subscribing to my “Go Ahead, Be a DeedGrabber!” Mini-Course. You’re about to learn about one of the least known, but most profitable niches in real estate – DeedGrabbing.
Over the next 5 days I’m going to debunk many of the myths about tax sale investing, and show you the “loophole” that allows anyone to profit from tax sale properties, without investing a bunch of money or waiting.
I really get a diverse group of people who subscribe to this email course.
Some of you are just getting started and have heard that tax sales are the best opportunity to get real estate for pennies on the dollar – even free and clear properties for under $1000.
If I’m talking to YOU now, I’m about to save you a lot of time, frustration, and money.
Others of you are modestly successful, own some properties already, and maybe even have done some creative or pre-foreclosure deals. You’re looking for another, more profitable niche to pursue.
And I get people now and then who are experienced tax sale investors. If you’ve invested at a tax sale before, what I’m about to tell you is not news.
Whatever the case is, I’m sure you’d like to make money in the tax sale arena, and you recognize that now is the time to get bargain purchases. And you’re looking for a way to do it.
Here’s the central point I want to make to each and every one of you:
Direct tax sale investing is not a good way to acquire bargain property unless you have hundreds of thousands of dollars to invest, and are willing to wait months and months, or years, to acquire your properties.
This is because you will have to face other bidders at a tax deed auction or buy dozens of tax liens and wait to get one that results in a property acquisition – most tax liens pay you off and leave you with no property…though you do usually earn a nice rate of return.
Tax Sale Basics
A tax sale usually happens in one of two formats – tax lien sale or tax deed sale. If you’re completely new to tax sales you can read my article, “Tax Sale Basics”, to catch up. But here’s a little more information about both:
TAX LIEN SALE – The county allows investors to “purchase” unpaid taxes. An investor pays the taxes owed, on behalf of a delinqent owner, and is given a first-priority lien on the property. The investor earns a high percentage return on his investment if the owner pays him off (quite often, it’s 10-20%+ per year).
A deadline is set for the owner to pay off the lien. If the owner fails to pay this amount by the deadline, in most states the property is deeded to the investor free and clear.
TAX DEED SALE – A sale date is set for all properties with delinquent taxes. Anyone who has not paid by that date has their property sold to the highest bidder.
Each state’s law is different, but your state should be similar to one of the two formats.
On the face of it, it appears that bargains would be everywhere. Simply pay off someone’s taxes, wait a while, then acquire their property for just the tax amount. Or bid on their property at the tax deed sale and get it for the amount of taxes owed.
The Realities of Tax Lien Investing
1. Many states have a bidding system for tax liens as well, so tax liens for valuable properties will be bid far past the minimum amount.
2. If you manage to buy a bargain tax lien, you will be paid off by the owner 95%+ of the time.
3. You will have to wait many months or years to acquire the property and there are legal pitfalls throughout the process.
The Realities of Tax Deed Investing
1. Tax deed auctions are well known, and well attended by investors. They will bid up the price on valuable properties to near retail value, or certainly to 70-90% of value.
2. You need all cash in hand at the sale.
3. Enough said.
Tax lien investing is great for people who want to park large sums of money making double digit returns, and end up with a bargain property once in a while.
In fact, large institutions come in and spend millions of dollars on tax liens at one sale, in my county alone.
“OK, I’m Convinced…What About the Loophole?”
Sorry if I’ve burst your bubble about making money at tax auctions. But here’s the good news: there’s a loophole that gets us around all the downsides of attending tax sales to buy liens or deeds.
We’re going to get $200 properties like those folks on TV (though the properties might not be as pretty as the phony pictures shown on the infomercial).
We’re going to get them now, and use the loophole: we’re going to buy directly from the owner who is about to lose the property.
Tomorrow’s lesson is called:
“The Real Source of Tax Sale Bargains – The At-Risk Owner”
Sincerely,
Rick Dawson
The DeedGrabber
Everything You Need to Know to Profit From
Tax Property Before the Sale -
The DeedGrabber Ebook
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Ebook Digital Download: "Go Ahead, Be a DeedGrabber" in digital format for immediate download. Takes you step-by-step through the process of DeedGrabbing, from getting your list of owners, to contacting the owners, what to say to them, and how to research the property for value and title issues before you buy. Then, how to sell the properties you get for big paydays.
DeedGrabber Study Course: Immediate download of the ebook PLUS the ebook in written format shipped to you free by UPS. Additional materials include Legal Forms CD which itself can save you thousands of dollars developing your paperwork. Also includes seminar DVD, Quick Start CD, and Introduction to DeedGrabbing CD with Jackie Lange of CREWealth.com.
{ 33 comments… read them below or add one }
what if I like what your doin and want to get in on it but have no money I mean Im a father of 5 and I dont have a dime but Im willing to do the foot work to find out about the properties in my area
I’m retured with little money so how did you get started ?
That’s the way I got started too. But you have it even better because now a lot of counties have delinquent lists online for free that you can start with. If you really need to operate on nothing for a while, you could locate the properties reaching the end of the tax sale process, find owner phones online, and start calling them to see if they would be interested in getting something out of the property before the tax auction or foreclosure.
Then you’re 99% of the way there.
where did you get delinquent tax list & the peoples phone numbers you say you called?
You can find a lot of delinquent tax lists online free. Pick a state, google for a list of counties, then start googling each county “county name tax sale list” – many will have them posted online for free with tons of information. For peoples’ phone numbers, try intelius.com and other free searches online.
Do I still get all the bonus stuff if I sign up now from this site.
Yes
Also what forms are included with the E-book Do I have everything to do my first deal.
I would also like more info about doing a 50/50 deal with you. lets face it i have looked on m counties web site and there are many properties to buy but all are still expensive.
There is a copy of a quitclaim deed and several purchase agreements. Realistically you will need a title company or attorney from the local area to get you going with your closing paperwork but the purchase agreement should get you started anywhere. Once you have a deal verbally agreed to, or signed up, contact us with the details.
This is fairly new to me what is the cost for your study course? I am retired with fixed income and not much left at the end of the month. Some times there is none left often I am in the red. Enough of my whining. I would really like to get started with your Deed Grabber course! Am studying the mini course online now. WHERE is the best place to find legal document’s at no or low cost? I Am a member of (PPL.) Prepaid Legal so can get some paper work free of charge. Can you give more detail for finding property’s WITH ONLINE SEARCH. Thank you James
You can get the ebook, which gives you everything you need to get started, at http://deedgrabber.com/ebook
It has purchase agreements and sample deeds. To get all the paperwork I typically use, plus the ebook in written format and 3 audio/DVD’s, plus over 10 hours of no-fluff conference calls, grab the customer appreciation pak after your ebook purchase (you’ll be offered it).
Is Quit Claim Deed the only option? I believe the best deed to get is Grant Deed or Warranty Deed. Besides, after training through your e-book, could I expect some concrete results (I mean decent money) say in about 90 days.. Thanks.
No, warranty deed is an option too. But quitclaim and warranty deed give you the exact same ownership in the property.
A warranty deed was also include a warranty from the seller that title is clear. We’re not asking them to do that when we only pay them $100-$200 for the deed.
When you pay a significant amount for a property, yes, get a warranty deed and it will make sense that the seller warrants that the property is clear. Of course get a title report too.
Is this a technique that I can use to purchase a home for us to live in? We want to move to NJ but the homes there are very expensive. Please advise.
It possibly could…but many of the properties we obtain need to be sold off to a rehabber because they are in poor condition.
If you’re willing to fix a place up while you live in it, it’s a possibility. I’ve encountered many houses that would have been OK to live in but they’re the minority.
What is there is somthing wrong with the title should you still get the quitclam deed?
And if yes why?
Sure, if you can fix that problem and end up with good title. Sometimes you can buy a property very cheap because something is wrong with the title, and then you fix it relatively easily and resell with good title. You also might want to get a deed to it if it’s headed to an auction where bidding occurs. As owner you might be entitled to any excess bid above the minimum.
Thank you for your very quick response . I have one more question let’s say I have a quick claim deed to the property and the property goes to a tax deed sale auction and a over bid did occur. As the holder of that quick claim deed I am entitled to what ever overage there is from that auction right?
And if so am I responsible for any liens or in judgment against this property. Even though it was sold at the tax deed sale?
thanks for information.
very fast thank you
My question is the same as Vincent’s question of October 1st. If you are the owner of the property at the time of the tax sale, then wouldn’t you be entitled to any overages that occurred from the sale? The property would have been “free and clear” when it sold, right? So there should be no judgments, liens, etc. on the property for you to be concerned with, correct?
If you are the owner of the property at the time of the tax sale you MAY be entitled to any overages that occurred from the sale. Here are reasons you MAY NOT be entitled to those overages:
1. If you just acquired the property before the sale, the state may have a law that says you needed to be the property owner at the time it became delinquent in order to collect
2. The state may keep the overages
3. If there were lienholders of any kind, they usually CAN collect ahead of you. The liens were wiped out against the property for the new owner. They still make the lienholder an “interested party” to the surplus funds and courts have consistently awareded them the surplus ahead of the owner.
This is, nevertheless, a great strategy. You just have to make sure you’re working in the right state, making numbers 1 and 2 no problem, and then you just have to be aware the lienholders might come forward to claim. This almost never happens though in my experience.
Thank you for your quick response. I live in CA. Is this the “right state” to do this with?
I was wondering have you or any other of your students had any success with the strategies that you are telling us about in new york city?
I had ever attempted to work in NYC. Until recently, students had issues with getting public records there.
However some have gotten past that – see the post on New York tax sale records
How is Florida as a tax-sale location? Thanks. Larry
It’s one of the very best:
1. Frequent sales
2. Almost all information electronic and available over the internet
3. Active resale market (must price the property LOW)
4. Lots of properties and population.
Give it a shot!
How is Connecticuit as a Tax Sale location to work with.
I don’t have any direct experience there – but I don’t know of a state that isn’t potentially good to work. Connecticut has pretty decent property values, I know that – not a lot of areas with worthless properties, if any. Work some of the more working-class towns.
How can you find out if a property has an IRS lien on it? Thank you.
There is no uniform way of doing this that I’m aware of. In my county, there is a computer terminal you can use to check, but only in person. Also, I believe many times the liens are recorded with the county, so you can just look up the seller’s name and see if any IRS liens have been filed.
IRS liens are one of the items that I don’t feel comfortable researching myself in a new territory, and one of the reasons I would get a title report before investing much in a property.
Any helpful hints or sites for the state of Michigan? thanks
Yes, in Michigan the properties are ALREADY lost to the tax sale by the time the sale occurs – so the tax deed sale list isn’t useful.
Here’s a short conference call we did about Michigan a while back: http://www.deedgrabber.com/michigan-tax-sale-teleconference
There is a very good chart you can look at here that outlines the entire process: http://www.waynecounty.com/documents/taxRevisionChart.pdf