all states auction off tax lien certificates, and even some
that do still have tax deed sales. At tax
deed sales you are not making an investment in a piece of
paper with the intent to earn back a percentage when the
owner pays off. You are bidding on the actual deed to the
property due to non-payment of taxes by the owner.
good thing about tax deed sales is the reward. You acquire
the whole property! You can then sell it, rent it, live
in it, whatever you want. The downside of course, is that
you need a lot more start up money than with tax
lien certificates. Also, unlike a lien state, a deed
sale may contain a large number of vacant lots and properties
hold on a second! I heard you can buy properties for PENNIES
ON THE DOLLAR! Well, probably not. Most deed sales
average around 50 cents on the dollar for a property, going
higher or lower depending on the property.
a very important note about tax deed sales: When purchasing
a deed, you are NOT getting a warranty deed like you would
get when purchasing a property in the normal way. You will
get a sheriff’s deed, a tax deed, or a constable's
deed. If you want to then sell the property at fair market
value, most title companies will not accept this type of
deed. You will need to file a "quiet title action".
Someone is then allowed to claim rights to the property.
This will mostly likely not happen, but it will still cost
you between $1000-$3000 to have a lawyer do this. Once it
is done you can get a full warranty deed. Definitely not
a deal breaker, but something to be aware of.
good tip is to consider selling the property wholesale to
a retail seller. You can sell the property by way of a quick
claim deed, which gives no warranties. Depending on how
much you purchased the property for, you can still likely
make a high percentage profit. Also, just as with tax lien
certificate auctions, make sure to do your due
diligence before a tax deed sale. Even more so, as your
investment will be greater as well as your risk.
you're interested in programs that can help you get started
in investing in tax liens and tax deeds, ProfessorProfits.com
has a great package for a low price of under $25 for a limited
included in that package and why should I buy it?