Looking to buy Tax liens in Texas. Best way to do?

[Elliot Fritz]

I would like to learn the best way eo buy Texas tax liens and deeds.

Are there such things as struck off lists?

Thanks

[Stephen Preston]

There are over 250 counties in Texas and each have tax sale auctions. Some of the large counties will have auctions monthly while smaller counties may only have them once a year. Generally the larger the county (population) the more competition.

Harris county (Houston), for example, has a tax sale on the first Tuesday of every month. You can expect a few hundred properties to be sold at each auction. I have been going to these auctions for years - they use to account for about 80% of my deal flow but with competition at an all time high, that has dropped to around 10%.

For a number of counties: you can find the tax sale lists here: http://www.lgbs.com/ (Including resale)

As far as due diligence is concerned here are a few things to consider:

1. These properties are sold as is where is, I have seen TONS of investors lose their shirts because they did not do their proper due diligence.You cant see inside the property. I do not buy vacants, I want to make sure that there are at least people living in the property and that it is habitable. 

2. Have an exit strategy in place before you buy - are you going to wholesale the deal? Fix and flip? fix and hold? 

3. Make sure to have a lien search done on the property (look for IRS liens, Handyman Liens, HOA Liens).

4. Review the tax suit - you need to make sure that all parties that have an interest in the property (mortgage holders, owners etc.) have been notified of the sale. If the owners weren't properly served, for example, you can find yourself in a long legal battle over title. If the homeowners weren't given proper notice, its pretty back and white - you will lose in court.

5. Call the county to determine if the property is classified as homestead or non homestead as this will determine the length of the redemption period (6 months vs. two years).

6. Call the county to make sure there are no additional back taxes owing on the property besides whats in the estimated minimum bid. The last thing you want to do is buy a property and then receive a notice in the mail that you have a tax bill owing for $20,000 as the new owner (congrats!).

Hope this helps! 

Stephen