I'm pretty sure it is a Bad Deal..

[Annetta Barnes]

So I just want to make sure I understand correctly. I am new, just getting started and it seems like I keep finding deals but they are not good deals. I just spoke to someone interested in a JV. Not sure what it is under contract for, but they are asking $5K for the property which is a 3bd 1ba SFH ARV $40K. $13K back taxes. Estimated repairs $10K-15K. Comps: 3bd 1ba 1053sqft Sold $38,500, 3bd 1ba 925sqft Sold $28,000 and 3bd 1ba 925sqft Sold $27,500. I was asking how this would work when they buyer would not be making a profit at all with the numbers I came up with. The person I was speaking with said sometimes a buyer will set up payments on the taxes, (even though I was under the impression it had to be pad at closing), but even with that method, the buyer is still not making much of a profit or am I not understanding something??

[Kevin Sobilo]

@Annetta Barnes, with $13k of back taxes on a low value property I would assume that is multiple years of back taxes.

I recommend you investigate how properties are sold for unpaid taxes in your state. It may already be listed in an upcoming tax auction. Perhaps you can buy it through that avenue. In some tax auctions, the property taxes are wiped clean. In my state that auction is called the Judicial Sale or Free & Clear Sale.

Normally tax auction properties are not available for bidders to walk through and evaluate. So, if you are able to do that now with the property you could have an advantage in bidding because you know the condition.

First, investigate how the tax sales work in your state. If you don't know the rules, you can't move forward with confidence.