Discover the untapped wealth beneath your feet. Unleash the power of land tax auctions and unlock endless possibilities.
Land tax auctions are a little-known investment opportunity that can generate wealth and streams of residual income. Today I’m going to show you how to profit from land purchased mortgage-free for pennies on the dollar.
Land tax auctions offer a chance to purchase land below market value for as little as 10, 20 or 30 cents on the dollar, and a significant portion of real estate listings at these auctions consist of land parcels. The best part? These auctions often fly under the radar, resulting in lower bidding and less competition.
By participating in land tax auctions, you can potentially make substantial profits. However, it’s important to consider factors like seeking expert advice, conducting surveys, assessing access and water availability, and understanding the impact of soil types and location on land value.
So, get ready to unlock the hidden potential of land tax auctions and seize the opportunity to acquire valuable assets at discounted prices.
What is a Land Tax Auction?
Land tax auctions, often referred to as tax deed sales or tax lien sales, are events where properties that have unpaid property taxes are auctioned off to the highest bidder. These auctions arise because local governments rely on property taxes as a primary source of revenue to fund public services. When property owners fail to pay these taxes, the local government may be financially strained.
Here’s a breakdown of the process:
- Delinquency: When a property owner does not pay their owed property taxes by the due date, the property becomes tax delinquent.
- Notice Period: Before an auction takes place, the local government typically gives the property owner a certain period to settle their tax debt. During this time, the owner may be charged penalties and interest on the outstanding amount.
- Tax Lien: If the debt remains unpaid, the government places a tax lien on the property. This lien is a claim against the property ensuring that the tax debt gets settled before the property is sold or refinanced.
- Land Tax Auction Types:
- Tax Lien Auctions: Instead of selling the property, some jurisdictions sell tax lien certificates. Buyers purchase the tax lien, effectively paying the owed taxes for the property owner. In return, the buyer receives a certificate and has the right to collect the debt, plus interest, from the property owner. If the owner doesn’t repay within a specified redemption period, the lien holder can initiate foreclosure proceedings to take ownership of the property.
- Tax Deed Sales: In other jurisdictions, if the property taxes remain unpaid, the local government will sell the property itself, rather than just the tax lien. The highest bidder at the auction receives the property’s title, usually free of any previous mortgages or liens.
Participation in land tax auctions requires thorough research, as the properties are often sold “as is.” You need to be aware of the condition of the property, any additional liens or encumbrances, and local regulations to ensure a sound investment.
Strategies for Maximizing Profits at Back Tax Land Auctions
Maximize your profits at land tax auctions by doing your due diligence and implementing strategic bidding techniques.
Thoroughly research the vacant land you are interested in before the auction. Ask yourself some questions:
- Does the title have liens or encumbrances?
- What size is the land and how is it zoned?
- Does the land have road access? Easements?
- Is it prone to flooding?
- What about utilities? Electricity, water, and sewer?
- What is the market value of the land?
You need to know these things to determine the value of the land and how much to bid. When bidding at the land tax auction, it’s important to set a maximum bid and stick to it. Avoid getting caught up in the excitement and bidding beyond your predetermined limit.
If you know the rules and do your homework, you can unlock untapped opportunities. Land tax auctions offer the chance to purchase land at well below market value, and 25% of the real estate on auction lists consists of land parcels. These land parcels are often overlooked, creating an opportunity for savvy investors to purchase them at lower prices with less competition.
By participating in land tax auctions, you have the potential to secure substantial profits by utilizing Ted Thomas’ buy low, sell low strategy.
Selling Real Estate Purchased at Delinquent Land Tax Auctions
What do you do after you’ve purchased a parcel of land at a land tax auction? How do you sell it?
Assuming that you did your due diligence and bid wisely, you now own a piece of land that you purchased mortgage-free for pennies on the dollar. You have enough of a profit margin to sell it at a sizeable discount and make a substantial profit.
For example, if you purchased a vacant residential lot valued at $75,000 for 10 cents on the dollar or $7,500, you have a profit margin of $67,500. If you sold it for 50 cents on the dollar or $37,500, that’s a $30,000 profit.
Another option is to utilize seller financing and collect years of residual income. You draw up the contract, which you can acquire from a title company, collect a small down payment and monthly installment payments from the buyer. You can read more about seller financing, also called owner financing, here.
To attract buyers advertise your land for sale on sites like Craigslist, eBay, Facebook Marketplace, the MLS, Trulia and Zillow, and let potential buyers know that you’re willing to accept installment payments.
By purchasing land at auctions, you can potentially secure a valuable asset and capitalize on its appreciation over time. However, it is crucial to seek the assistance of a land broker for expertise, conduct surveys to assess the land’s size and boundaries, evaluate road access and water availability, and consider the impact of soil types and location on the land’s value.
Overall, investing in land auctions can be a unique and profitable opportunity for those willing to do their due diligence.
Frequently Asked Questions
What Are Some Common Misconceptions or Myths About Land Tax Auctions and Their Potential as Investment Opportunities?
Some common misconceptions about land tax auctions as investment opportunities include the belief that they have limited potential for profit and that the competition is too high. However, land auctions offer discounted prices and less competition, making them a lucrative investment option.
Are There Any Specific Strategies or Tactics That Experienced Investors Use to Gain an Advantage When Buying Land at Tax Auctions?
Experienced investors gain an advantage at land auctions by conducting thorough research, seeking expert advice, and assessing the potential profitability of a land parcel. These strategies help them make informed decisions and secure profitable purchases.
What Factors Should Investors Consider When Determining the Appropriate Bid Amount for a Land Parcel at an Auction?
Consider the location, soil quality, and availability of utilities when determining your bid amount for a land parcel at an auction. Conduct research and due diligence to make an informed decision.
Conclusion
In conclusion, land tax auctions present a lucrative investment opportunity for those willing to do their research and due diligence. By taking advantage of the hidden potential of these auctions, you can acquire land at significantly discounted prices and potentially earn substantial profits.
However, it is important to approach the land buying process with a sophisticated strategy. Consider seeking the assistance of a land broker and conducting thorough assessments of the land’s attributes. With the right selling approach, you can generate cash flow and streams of passive income.
If you’d like to know more about how to purchase land at tax delinquent property auctions, Ted Thomas provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops, web classes, personal coaching with certified coaches, and an interactive map and auction calendar research tool that allows you to visit each county online to find the details about upcoming auctions. Start your money-making journey by attending Ted’s 7-Hour foundational training.
Want to earn massive income from bargain real estate investing? Would you like to buy mortgage-free properties for pennies on the dollar? Or earn double-digit interest rates secured by real estate? Then get started today with this Free Gift.
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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