Buying a $50,000 property for $5,000?

[Giovanni Montesclaros]

Buying a $50,000 property for $5,000... Too good to be true? I have obtained a list of properties and the amount of property taxes that are over due by the homeowners.

These homeowners have not yet lost their property to tax foreclosure but are soon to be, and will be sold at a tax lien auction or tax deed action. So ultimately, the homeowners will be left with with a ridiculous interest rate or empty handed all together.

I'm planning on contacting the homeowners on the delinquent tax list and explain to them; they are about to lose their home to auction within the next couple of months. I will then offer to pay off the property taxes, in exchange for "free and clear" ownership of their property through a warranty deed and I would also offer them a piece of equity after I wholesale the property.

You would think a lot of people in this situation would jump at the opportunity to sell they're home for as low as 10% of the market value right? Because it's much better than losing their home to auction for nothing at all correct?

I'm familiar with the fact that a lot of these homeowners are still hostile at the fact that I would have the audacity to even offer such a low price.

For the investors that are familiar with this strategy, could you share your most successful way of approaching these specific homeowners?

[Jay Hinrichs]

@Giovanni Montesclaros  I have spent a career chasing distressed assets.

obviously my comments were not what you wanted to hear.. you wanted to hear yes that's great of course just show up and tell someone to sign over your house because your going to lose it anyway.

My point is that is NOT reality or even remotely close to reality.

you want to learn here is reality.

1. people procrastinate and its very common for them to pay their tax's literally 2 to 3 days before they lose the property.

2. In many cases its BETTER for them to lose it.. they can then apply for overages because it will probably bid up past whats owed that's better outcome for them than just handing the property to you.

3. Properties that are bought in this manner and for sure it happens but the VAST majority or low value very distressed junkers.. hardly worth 50k and your buying them for 5k.

4. your not the only one with this idea.. there are legions of direct mail companies that sell how to .. for this exact model. your just one of many all doing the same thing.. 

5. for you to actually do this you need to put in a ton of time effort and leg work.. and then find that one in a thousand that will walk away.. it happens but its rare.. and more common is they get some money out of signing over the deed.

its a full time job to make any money at this..