In the current economic climate, tax delinquent property is far and away the best property investment you can make. There’s tons of it, it’s easy to get, and there’s a lot of money to be made from it. If you can find a back taxes property and buy it without attending the auction, you’ll be able to profit as much as you want this year.
What’s the best way to find a back taxes property? This is simple, but usually overlooked by investors. First, don’t buy from the tax sale – there is too much competition, and it’s too risky to buy a property you can’t inspect first. But don’t buy it from the owners yet, either. Wait until after the tax sale, and research the properties that actually sold.
Why? Well, first, you’ll seldom find a back taxes property with a mortgage at this point. This is because banks will step in and pay off taxes, rather than lose their stake in the property. Also, if a property actually sold at tax sale, then that means someone out there thought it was a good enough deal to buy it. Properties with no bids, you can forget about entirely. They’re trash.
Next, find the owners of these properties. They can still legally sell to you during the redemption period after tax sale, and they are highly motivated to do so at this point. You can often get properties for as little as a few hundred dollars during the redemption period.
Then, you can either choose to pay the taxes off yourself, or find a buyer before the end of the redemption period and let them pay the taxes off. This is a great, quick way to make a lump of cash without ever having to put out more than a few hundred dollars yourself.