unless you are extremely familiar with the county Treasurers Office, Assessors Office, Recorders Office, know how to find a property from the legal description in and on the plat maps and have an affinity for title searching, TLCs can be one of the most dangerous types of investing out there.
How can I tell you?
Let me count the ways.
I have been to Tax Sales that have sold:
Property on the Super fund list
side of cliff
certified wetlands
former auto paint shop, another chemical site
landlocked property
army bombing range
property at bottom of new man made lake
river bottom with not dry land except maybe in 50 yr drought.
narrow strip of land with active railroad tracks
property 2 feet wide
many other properties where combined side setback exceed property width
property unsuitable for ANY septic system
ground under interstate highway
development detention pond
development dedicated recreation area
abandoned quarry filled with trash, garbage, toxic substances
TV tower on rented land (the land was not for sale)
land but not building, where a Fortune top 20 company had a prepaid 30 year lease.
That’s only the risks that I could think of in a 2 minute drill.
I went to a tax sale yesterday and saw properties offered for sale with big mortgages, that were not wiped out. One 12 acre vacant land had a $440,000 lein which would transfer with the property. Several people bought stuff yestreday with big existing mortgages. Why? Not yesterday, but I few years ago I saw a property sold at tax sale that has $1.5 million IRS lein!
Re: tax liens! how do i buy? what are the pitfalls - Posted by George
Posted by George on December 05, 1999 at 19:45:05:
You have to take a day off from work to attend the auction.
The yields may be high, 18%(in NJ), but the principle amounts are small sometimes only a few hundred dollars.
Real estate guru’s advertize the 18% yields. This yield is the yield at the start of the auction. The yield quickly goes to zero or even negative numbers if there is a good chance of getting the property.
The property may not be worth the back taxes; why else would the owner have abandoned it?
The property may have an associated Toxic liability, which means that you the new owner will regret any association you had with the property.
Stocks known as REIT’s are currently out of favor. Some yield close to 18% (AHR). The best real estate deals may be on wall street.