Re: tax deeds - Posted by Bill H
Posted by Bill H on July 18, 2003 at 13:20:27:
Like Ron said, it all depends on where you are? I have been buying for some time now in MS. The state has a 2 year redemption period. The state collects the money and as it is collected you are paid on a monthly basis. They send you a detailed printout showing the parcel, amount paid, interest accrued, overbid (if any) and amount due to you. You DO NOT get the overbid back and NO INTEREST on it…that is your donation to the state. It is done on a monthly basis so if the delinquent taxpayer pays on the first day or last day of the month it costs them the same. NO stopped up toilets, no bad checks, no deadbeat tenants…just a good check…‘In the mail.’
MY suggestions for books is that you go to your local courthouse and ask the law librarian for assistance. Get a copy of the statutes and read them, relax, have a cool one and read them again. In most cases it is not difficult “Lawyerese” reading. It will explain exactly how the state does it.
If you are looking to “get rich quick” forget it. If you are looking to get a $189,500 house for $3,500 forget it. It simply does not happen that way. Does it happen, yes, your odds are about as good as winning the powerball lottery. You will make much better interest return on your investment than you can get at the bank or S&L. Do you get a “good property?” Occasionally, yes you do. I got a 3/4 acre lake front lot for $81.25 and sold it for$18,500…not tooo bad. It does not happen that often though…Invest for the interest and penalties and anything else is gravy on the top.
Are there risks, YES. As a result of the infomercials and late night TV Gurus it is now intensly and fiercely competetive. We have people from all over the USA bidding, finance people, lenders, etc. Some companies have a bidder in each of the counties. You will wind up with property that us useless. Contaminated vacant lots, swamp land, etc., This I just let go and write off as a cost of doing business
Why don’t you go see what you are bidding on? Well, they sell about 3 million dollars worth each year and it is about 20 pages of classified newsprint pages, takes a full week to sell, and lots and lots of legals to check out (No simple street addresses, etc.,) not worth the time and effort to me. Have you ever been in the heat and humidity of MS in August? In some of the smaller sales areas, yes you should investigate before you invest. However, time and experience has proven that 98 to 99 percent will redeem anyhow so why waste the time, effort, energy? Others think differently…I just accept the losses, when they occur, as a cost of doing business.
Also, there are two classes of tax “Lien/deed” investing. One is the prepayment of the taxes to the state(like I do) and the other is after the sale when no one buys the taxes and it has defaulted to the state, “the leftovers.” The state then sells it for whatever they can get for it. With the latter you are actually buying the property…Investigate BEFORE you invest. When the man says, “SOLD”, guess what it is YOURS, warts and all.
Another easy way to get the information is to do a search on the state in which you live and then search their state statutes and then the tax sales and download, print and read. Not expensive, time saving, convenient and you can always go back and check again.