Looking for good advice on purchasing Tax Deeds

[DuJuan Paxton]

Hello BP!

Question:  

I am considering purchasing 5 Tax Deeds as a package deal from another investor.  These properties are all vacant lots in very desirable areas in Fulton and DeKalb Counties in Georgia.  Since I've never purchased a Tax Deed, I would appreciate any advice from some of the more experienced investors that have come across deals like this.  What are somethings I need to consider while doing my due diligence?  Thanks for any nuggets you can provide!

[Bruce Lynn]

#1.....when do redemption rights expire, so that you can sell the lots or use them.

#2....what does it cost you to sell them.....can you get title insurance.

#3 ...what is your exit strategy....can you sell them and what will someone pay for them.

#4 ...what is it going to cost you to hold on to them before you sell?

#5...how long will it take you to sell them?

Those are some of the questions I'd be looking at.

Sometimes the lots are very very tough to make money on due to the thin margins.

Sometimes the spreads seem good, but aren't.   

You buy a lot or $500 and you think you can sell in the next 5 years for $10,000.

$500+2500-$3500 for quiet title or title fixing....$200/year in taxes..maybe $100/insurance.

If you are lucky and your realtor/broker doesn't want a stiffer flat fee due to the price and market

Maybe you have $800 closing costs when you sell.

So after five years $4500+800selling costs and you make $4700...you double your money...100% return right?

Except over 5 years...so more like 20% return on your money....still not too bad.

I would really want to know my prospects of selling.  Are builders active in the area.  Are they looking for looking for lots....or are people buying and building themselves on the vacant lots.

#1 thing I see that often doesn't sell at the auctions are lots....so make sure this is what you want.

Close at a title company/no ifs ands or buts......you don't want to inherit a bunch of city mowing liens.