June 11th, 2008
I Buy Homes and Land
I have been investing in an area of real estate that very little is known about. When I tell people that I sometimes invest in Tax Deed, they give me a blank look followed by an inquisitive stare. Most people have the wrong idea about Tax Deeds. That is one of the reasons I like investing in them and tax delinquent properties. There’s less competition and few people know how lucrative it can be.
There are several ways to make money when it comes to Tax Deeds and tax delinquent properties. One is to buy Tax Certificates which is basically buying a lien on the property. The second method is my favorite and what I’ve been doing for about 4 years and that is buying Tax Deeds or properties delinquent on their taxes.
Some property owners delinquent on their taxes have sold us their property for $50 or less. We later sold those lots for between $4,000-7,000 each. These were buildable lots and not swampland. It’s actually a benefit to the owner to sell their property for the least amount of cash.
There have been times when I bought lots with homes on them for just the back taxes. The houses needed a ton of work. One of the homes had a tenant who was still paying rent to the previous owner for about 2 years after the owner lost the property! So, if the previous owner lost it for taxes, why didn’t the new owner collect the rent? There wasn’t a new owner, the property was in what you might call limbo; this happens to some Tax Deed Properties. We purchased that home over the counter without having to bid for a Tax Deed nor a Certificate.
One of my partners invested $27,000 for a commercial lot. She resold that property for about $103,000 a few months later. Tax Deeds can be lucrative but you have to know what you are doing so you don’t get in trouble.