Today, I’ll be discussing investing in tax deeds, and the topics I’m going to cover are:
- What Is a Tax Deed?
- What Are Tax Deed Sales?
- Consider Location When Buying Tax Deeds
- Does a Tax Deed Wipe Out a Mortgage?
- How Much Do Tax Deeds Cost?
- How to Sell a Tax Deed Property
I’m Ted Thomas, and I’ve been investing in tax deeds for over 30 years. This business is filled with hype and overblown claims from those who usually have little to no experience.
Today, I’m answering your questions about investing in tax deeds, and I’ll provide real examples that show wise investors creating significant profits. They make paydays of $25,000-$50,000 on one deal, and you can copy what they do.
Want to learn how to purchase bargain real estate? Would you like to buy mortgage-free property for pennies on the dollar? Or earn double-digit interest rates secured by real estate? Then take advantage of this FREE Gift.
What Is a Tax Deed?
What is a tax deed? A tax deed is a legal document that grants (transfers) ownership of the property.
For example, if a property owner fails to pay property taxes, that causes the local county to have a shortfall of revenue. The consequence of no revenue is unpaid bills at the county government offices.
In situations like that, the county is authorized by the state legislature to seize the property and sell it at a public auction.
What Are Tax Deed Sales?
In most instances, when they resell the property, the bidding process will start at very close to the delinquent back taxes, which could be as low as 10 to 20 cents on the dollar of the assessed value of the property.
A tax deed sale is really an auction where the county is trying to collect at least the delinquent taxes by selling the property to the highest bidder. The county does not want the property; the county wants the revenue that the property would normally create as property taxes.
The United States has over 3,000 counties, and all of the counties are authorized to sell tax deeds at auction.
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Consider Location When Buying Tax Deeds
From the investor viewpoint, the objective is to purchase a property at a low price, possibly 10, 20, or 30 cents on the dollar and then sell for a profit.
Many would-be investors don’t consider the location of the different counties and where the property is located within the county. This is very important information.
For example, in Fort Lauderdale, Florida, the property values are considered high when they’re compared with Kalamazoo, Michigan, where the property values are considered low.
Here’s another example. 10 cents on the dollar in Los Angeles could easily be $70,000-$100,000 for upscale properties. In New York State, it’s not unusual for the bidding to start at $50,000-$100,000 because the rules are different in a particular county. These are all important considerations.
Does a Tax Deed Wipe Out a Mortgage?
At the auction the local county will transfer the property to the individual that pays the highest price, the highest bidder.
In most instances, the county treasurer, an official of the county government, will take action and clear the mortgage or deed of trust loan from the property at the time of the auction.
The mortgage and deed of trust is extinguished; it’s deleted, and the new owner takes the property free and clear of loans. Most private liens on the property will not survive the tax deed auction.
Full disclosure, I am not an attorney, real estate broker or tax professional. I’m not giving legal opinions or advice. My experience over many years of investing in tax deeds and tax liens reveals you must contact an experienced attorney to know the rules.
How Much Do Tax Deeds Cost?
I have hundreds of successful students investing in tax deeds purchased at auctions in many different locations in the United States.
California surprises investors continuously. For example, numerous students have purchased in California for 6 to 10 cents on the dollar in Los Angeles County with no mortgage or deed of trust on the property.
Newcomers should not expect to buy mansions for pennies. That may work on late night television, however, the auction will be competitive.
Certain states and counties are very appealing to investors that have small amounts of money to get started. These states, like Michigan, have tax defaulted properties for pennies on the dollar, yet when they are cleaned up and resold, investors are earning $25,000-$50,000 profit.
How to Sell a Tax Deed Property
Tax deed auctions require considerable research and time to review and check the condition of the property. One of the more important skills is to develop the ability to sell the property and do it quickly.
The money in the business is made when you buy, however, you receive your profits when you sell.
Underestimating the importance of marketing is possibly the biggest mistake that investors make. You must know who your buyer is and whether your pricing is acceptable.
Sell the property using eBay, Zillow, Trulia, the Multiple Listing System, Craigslist, Facebook Marketplace, and every electronic site possible. Put signs for the front lawn and around the neighborhood. Place ads in newspapers.
Training and financial skills really help the process. The most successful auction buyers are those that work with a coach or a mentor. There is an abundance of real estate available to buyers investing in tax deeds.
Conclusion
We hope you enjoyed Ted’s lesson about investing in tax deeds.
At tax deed auctions, mortgage-free real estate is sold with the bidding starting at the back taxes, and investing in tax deeds is a little-known way to purchase real estate at substantial discounts.
Savvy investors buy properties for 10, 20 or 30 cents on the dollar at tax deed sales, then resell it for 50 or 60 cents of the dollar for a quick sale. It’s not uncommon for tax deed investors to make \$25,000 to \$50,000 from one deal.
If you’d like to know more about tax delinquent property investing, Ted Thomas provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops, web classes, and personal coaching with certified coaches.
Learn how to reap huge rewards from investing in tax deeds and tax liens! Get started today by taking advantage of this Free Gift from Ted. Act now, it costs you nothing and will give you a big head start!
Ted Thomas is America’s Leading Authority on Tax Lien Certificates and Tax Deed Auctions, as well as a publisher and author of more than 30 books. His guidebooks on Real Estate have sold in four corners of the world. He has been teaching people just like you for over 30 years how to buy houses in good neighborhoods for pennies on the dollar. He teaches how to create wealth with minimum risk and easy-to-learn methods.
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