Tax Delinquent Property Lead!

[Ardie Mansouri]

Hi everyone! I need advice!

Alrighty, I'll cut right to the chase.  I started mailing out letters this week to tax delinquent properties with absentee owners in my area.  To my surprise, I got a call from an owner within the week!  

Going into this, I had a very specific idea for how I wanted to start out my foray into real estate... hopefully acquiring a property on the cheap through marketing tax delinquent absentee owners, updating the property as needed and again HOPEFULLY selling for a profit!  It seemed to work for Seth Williams from podcast 39 anyway.

I'm not sure what I was expecting with an absentee owner though... of course they have tenants! So I get the call from the owner today asking what my offer would be on their place.  To make a long story short

-The property is a 1.5 story 2 bed 1 bath building that seems to be fairly well maintained based on the appearance of the front of the house.  

-The taxes owed are right around $10.5k, property was bought in 1986 for about $55k so it stands to reason that they have significant equity in the property.  

-They do have tenants, I was stupid (and nervous) and didn't even think to ask what they were paying monthly.  

-The properties around it are generally going for about $120k-$150k. 

-The city will not file suit until next july and around here the owners have a full year to pay before the property is auctioned off.  So they basically have a year and a half to pay off whats owed.  It seems to me that this would make them a little standoffish to a low ball offer, but then again I've never done a deal before and I have no idea!  

Any experienced investors out there willing to lend some advice or suggestions?

Thanks everyone!

[Account Closed]

Definitely don't assume anything.  They could have pulled out all the equity in 2007.  Your seller might not be motivated at all. The tax default isn't much a motivation IMO.  There are many people who don't pay until they have to.  They pay the taxes to save it from tax sale and then start the cycle over again.  You do need to know the status of the tenants.  Do they have a lease or are they month-to-month?

Get a title report and find out what you are working with.