Today I’m going to answer your question, “What are the tax deed states with no redemption period?”
The topics I’m going to cover are:
- Tax Defaulted Property Is a 200-Year-Old Government Program
- Redeemable Deed States Sell Tax Deeds a Bit Differently
- Investing in Redeemable Deeds in Georgia
- Investing in Redeemable Deeds in Texas
- Other Redeemable Deed States
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Tax Defaulted Property Is a 200-Year-Old Government Program
My perspective has been developed over the past 30 years of purchasing tax-defaulted real estate as an investor and guiding and training others on how to earn money with tax liens and tax deeds. This government program has been available for 200 years.
Local county governments confiscate real estate when the property owner has failed to pay property tax. The county will resell that property at public auctions and use the revenue to pay the county employees and other bills.
The number of properties up for auction could be dozens, hundreds, or even thousands depending on the size of the county’s population.
Redeemable Deed States Sell Tax Deeds a Bit Differently
Today’s topic is tax deed states with no redemption period, so let’s talk about redeemable deeds.
What are redeemable tax deeds? From time to time in my classes, I will refer to redeemable tax deed states and counties as “hybrids”. These particular states have auction rules which are unique.
Even though the property has been sold at a public auction to the highest bidder and the bidder has received a deed to the property, it’s a redeemable deed.
What this means is that the state allows the property owner to come forward and redeem the property simply by paying the auction bidder 100% of their capital back plus the required penalty as set by the state.
Of the tax deed states with no redemption period because they’re technically redeemable deed states, Texas and Georgia come to mind, but there are other states that I’ll list in a minute.
Investing in Redeemable Deeds in Georgia
To redeem a deed in Georgia, the defaulted property owner must come forward and pay the capital back plus an additional 20% penalty in the first year.
This is not an interest rate of return. It’s a penalty. What’s the difference? Interest rates are annualized and penalties are not.
Whether the defaulted property owner returned in 29 days or 290 days to redeem the property, they would still pay a 100% return of capital plus 20%. This applies from day 1 to day 365.
In the second year it’s a 30% penalty, the third year 40%, and fourth year 50% until finally the property owner would lose the property.
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Investing in Redeemable Deeds in Texas
Texas has 254 unique county governments and they’re all authorized to sell tax-defaulted properties at public auctions. For example, Harris County, where the county seat is Houston, will conduct an auction on the first Tuesday of the month.
To redeem a deed in Texas, the defaulted property owner has 180 days to pay the capital back plus an additional 25% penalty or lose the property.
What I’m about to show you is the solution to cash flow problems for those who need it.
Let’s assume you’re attending an auction in Harris County, Texas. You would obtain an auction list, look at a property and assess its condition. If you liked what you saw, you would research further for any municipal or federal liens, and you would check the assessed value to see what it’s worth.
Let’s say the property is worth $400,000, and at the auction, you place a winning bid of $100,000. You just purchased a $400,000 property for $100,000, and you congratulate yourself on how smart it was to go on a buying tour with the Ted Thomas group.
3 weeks later an attorney calls and says “My client wants to redeem the deed. He wants his property back. How much does he owe you?” Trust me, the attorney already knows the exact amount but is testing you to see if you know how much you’re owed.
The correct answer to the attorney’s question would be, “$100,000 plus the 25% penalty and any charges the county might have for fees.”
In 3 weeks, your $100,000 has become $125,000!
Other Redeemable Deed States
Redeemable tax deeds are auctioned in:
- Rhode Island
Keep in mind that legislatures change the rules every year, so what we are discussing here about tax deed states with no redemption period could easily change.
We hope you enjoyed Ted’s lesson, “What Are the Tax Deed States With No Redemption Period?”
Tax deed states with no redemption period are called “redeemable deed” states. These states are Connecticut, Georgia, Rhode Island, Tennessee and Texas.
Purchasing in a redeemable state can be very productive, and financial success is realistic if you follow the system Ted has outlined in his course material. However, like every business you get out of it what you put in.
If you’d like to learn how to reap huge rewards from 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.
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.