NEWBIE buying lot at tax sale - Posted by Pete (PA)

Posted by Nate on June 16, 2000 at 22:30:09:

Based on the information you have provided I would probably pass. It is definitely possible for real estate to be worthless, particularly if it’s in a location where the cost of new construction isn’t justified, as you seem to think it’s not.

The value in real estate is in using it, and if you can’t build profitably, that takes away one of the major uses.

As a lark, I might ask the industrial place if they need more parking and get a signed contract before I bought the lot. Otherwise, forget it - you’ll probably end up deeding it back for another tax sale in a few years when you get sick of paying taxes on a useless lot.

NEWBIE buying lot at tax sale - Posted by Pete (PA)

Posted by Pete (PA) on June 16, 2000 at 11:46:43:

My local paper listed properties going up for tax sale in July. I ID’d a few of interest, drove them and narrowed down to one particular vacant lot. The delinquent taxes listed on it are around $1000 and it is owned by an estate. It is an 11,250 sq. ft. level lot with 125 feet of street frontage, located in a small borough with no zoning. It has two row houses adjacent on either side, a rear alley and small industrial property behind it, a municipal park across the street.

Regarding the purchase - I want to get a title search done to make sure it’s clear, and want to go to the town offices and make sure its a buildable lot. Anything else I need to do? Am I missing anything?

Regarding after the sale - I’m not sure what to do with it, either flip it or build apartments. Building doesn’t appear all that feasible…rough number crunching leads me to believe it will cost more to build than they would be worth, even with the cheap land. Then if that’s the case, who would buy the lot from me, unless they build a single-family home on it? Another thought was to drop some gravel on it and lease it to the rear industrial user as additional parking (20 spaces for $500 a month).

Any thoughts would be appreciated. I figure if I can pick it up for next to nothing, there’s got to be a profit somewhere.

Re: NEWBIE buying lot at tax sale - Posted by Ron in MI

Posted by Ron in MI on June 20, 2000 at 14:27:15:

As newcomers to REI we investigated buying vacant land at a tax sale and found that these only come with quit claim deed not warranty deed. In short, it will take legal assistance to convert this land into useable land. Often the legal costs are many times more than the cost of the land. Good luck.

Where are you? - Posted by David Krulac

Posted by David Krulac on June 19, 2000 at 09:20:53:

in Pa. email me if you like. be careful and do your due diligence on title, environmental, and utility issues.
Liens can transfer with the property in Pa. even in judical sales!

Re: NEWBIE buying lot at tax sale - Posted by dew

Posted by dew on June 17, 2000 at 16:00:16:

So what are the taxes–maybe you just keep it for awhile, because, yah just never know…maybe it will be worth developing in a while. But the industrial stuff behind it some how doesn’t sound too good.

Re: NEWBIE buying lot at tax sale - Posted by Julius Levai

Posted by Julius Levai on June 16, 2000 at 23:51:47:

Pete! You might ask either side houses that how much are they willing to pay for some extra backyard space and more privacy. If nothing, than you may find out, how much can you collect monthly for an advertising billboard and if it`s legal to put one up. Have fun with it! Julius Levai

Re: NEWBIE buying lot at tax sale - Posted by george

Posted by george on June 16, 2000 at 18:37:57:

  1. Do such sales wipe out all liens in your area?
  2. Are there any easements?
  3. Is there a toxic liability risk?
  4. Why do you suppose the current owner does not want it?
  5. Is it possible for a piece of real estate to be worthless?

In NYC they auction off bunches of vacant lots, 10% down 90% due in 90 days. Most are ‘sold’ at the auction(someone put 10% down), but after 6 months I have seen few actually change hands(nobody came up with the rest after 90 days).