Realistic Expectations for Tax Deed Auctions

[Account Closed]

I've never done a tax sale before. Can you give me a general idea of what kind of deal I'm going to get at a tax DEED sale? I know all the standard stuff applies here: "Every one is different" and "there are no guarantees," etc. But can you get me at least in the ballpark in terms of expectations so I know if I even have the capital to play this game since it is all cash sales?

Hypothetical. House is worth about 200k just based on location and sq footage. Of course, condition is unknown other looking at it from the outside. Taxes owed (min bid) is 10k. Is this thing going to get bid up to like 180k or is it possible to get it for 100k or 50k?

Again, I know every situation is different, so you can save yourself the trouble of typing that. I'm sure somewhere someone got a 300k house for taxes owed. But I'm asking what is typical and likely. 

[Christopher Gilbert]

We do both tax and foreclosure sales in Austin and surrounding counties. Typically 70% of the houses get pulled before or on the day of the auction and never go up. Some come back within a few months but most get either tied up in legal action or the owner finds a way to pay it off. At tax auctions the ones that make it are the ones that do not have clear ownership or their is no heir for the property. For a $200k house you might be able to get it for $160k if it is in the surrounding area but commutable to Austin proper. Throw in repairs, the two year mandatory holding period on a homestead and sales costs, flipping isn't really an option on tax auction properties. The past few years all of the California money has been coming to the auctions and they have been paying 75-85% ARV on all these houses. Any house that is decent gets bought by these funds and they turn it into a rental since the returns are not there to flip any more.

Land is still doable at tax auctions but 99% of what goes to auction are drainage ditches, floodplain, cliffs or landlocked with no usable easement.

Take a look at the mortgage foreclosure auctions instead as these usually only have 90 day hold periods and no redemption rights. Again, expect to pay 75-85% ARV and you might be able to find a few rental properties out of it but not many flips.