The way to check out Tax liens(NY) - Posted by Mitchell
Posted by Mitchell on March 02, 2002 at 12:49:14:
If you take the time to check out the owners and the properties, you will find many good deals.
You can certainly get a list of properties that are three years behind and due to be auctioned at the upcoming auction. Usually, the lists are printed about a month prior to the auction and this leaves plenty of time to investigate the areas that you are interested in.
Contact the owners, get their story. If they sound like you can work with them, then go see the properties with a contractor. You will almost never buy at that first meeting. If there is an existing mortgage, you can purchase Subject to the existing financing. If free and clear, for the deed, you will give a note for an agreed upon amount for the equity. Do not agree to pay too much. They have not sold the house and the tax auction is around the corner. You can say that you can always buy it at auction without the existing mortgages.
Next, after seeing several properties, go to the county clerks office and do a preliminary review of the title history. Learn to do it yourself. You can certainly make a deal with a title company, asking them to do a preliminary review.
Be prepared to move quickly as the seller will almost certainly call you only one day prior to the tax sale. That is because Uncle Harry did not come through with the $7,000 that he said he would, and the house is lost to them. At that point, reduce the amount that you will give him because you do not have time to throughly check out the property or do a title search and you have several other tax delenquient property owners that have called you and your money is limited. The only out of pocket expense should be the back taxes and perhaps some moving expenses to this desperate seller.
You certainly should do a cleanup. A rehab may not be wise as you could sell the house as a fixer and still make plenty. Avoid rehabs if possible. Consider only doing what is necessary to put the house into sellable condition. You will find plenty of buyers who will have some DP and a desire to fixup themselves, releaving you of that task, expense and trouble. They will be amenable to buying on a land contract. This makes it easier to evict if they do not pay on the wrap around payment that you gave them. You can also sell the land contract to investors for cash if you want.