Pre-Foreclosure at Sheriff’s Auction

[Pete Harper]

I’ve attended several Texas Tax Sales. One thing that I’ve noticed is all the better properties are withdrawn at the 11th hour. I’m getting a little frustrated, we do all the due diligence, drive by inspection, research owner, liens and etc. At first I thought it was homeowners scraping together funds to avoid foreclosure. Then on today’s sale I saw three properties all cleared at the last minute. I know it wasn’t a homeowner because they are deceased.

What I think is happening is investors are reaching out to the homeowners in pre-foreclosure and paying the taxes. What if I were to offer to pay the delinquent taxes and give the homeowner $10,000 cash? Anyone try this strategy or something similar?

This would be a win-win, homeowner gets cash for a property they were going to loose anyway, I get a good property at a discount price.