Tax Liens Noob Questions (Neptune NJ)

[Steven Steiner]

Hi everyone. This might be a TLDR - but if you have the inclination...

So I have been researching Tax Lien Auctions pretty heavily recently and I had some questions which might be simple questions, but I haven't found on any websites or books yet, so I figured it was worth a shot to throw them out to the smarties at Bigger Pockets and see who could hit a single:

1. To be specific, I have been checking out Neptune NJ. I notice in the results from 2015 - ALL of the high bids except one, from what I can see, were big boys like Investment Firms, etc. I guess some of them, after research might turn out to be the mortgage holder protecting their investment - but in general, are people doing Tax Lien Auctions noticing that big banks, etc. are winning all the auctions? How does this go - do they just keep bidding things up until the "little guys" tire out?

2. I see where a thriving hotel had an unpaid tax bill. That hotel is still in business right now and getting 5 star ratings on Trip Advisor. I see why someone would want this debt - so that they can get paid the penalty - etc. Why would a thriving hotel be in a situation where they wouldn't pay their own tax bill? Are they maybe struggling behind the scenes? Can there really be an oversight this huge?

3. LASTLY... :-) So if there is a listing that has a house attached, and the house looks great, and you can see they have had the same owners since 1996 - why would this be popping up. Like maybe older people just missed their bill in the mail? Fell on hard times? I mean if I see like, for instance, land is worth $100,000 and house is worth $100,000 and there's a $2000 unpaid tax bill....what could be up here? Land is not in flood zone....I mean I just don't get what some of the downsides to some of these could be. I know I am missing something....

Thanks a lot for any help!

Steve

[John Underwood]

Steve, 

Larger counties bring in deep pockets and they buy up the higher dollar properties and all other that I have talked with only want the Interest.

Either go to smaller counties or do what I do and look at properties that have a FMV of under 75k. There are many great looking properties in my area that have made perfect rental properties in this price range. Also I avoid under 20k as this is usually junk.

This gets my list down to around 1000. Then I spend months driving by these house and I rank them from 1 to 10 so I can quickly look at my notes and ranking during the auction.

As to why someone wouldn't pay their taxes. There are so many reasons. Hard times, deceased, in a nursing home, this is not their primary residence and they are focusing on their primary house. Some people pay late every year and you see patterns of the same houses that are on the list. You can look up when each year they have been paying to see if this is normal or a new occurance. Some properties will have multiple years unpaid. These are more likely to not get redeemed.

I have been doing this for over 10 years and I still learn new things to look for.