Investor · Richmond, TX · Member since 2016 · 12 posts · 4 votes
I'm curious what investment strategies people have used with Texas tax deed sales that have worked. I've never done it before but I anticipate that property with houses on them are bid on with more fervor and therefore end up closer to their market value. What about raw or developed land for a steep discount that could be used to build on for a rental? If I were to buy a deed for a home that is move in ready, can I move renters in right away? If so, what happens if the owner pays within their allotted timeframe? Does that void the lease or does it stay in effect until it's expiration but need to be turned over to the owner? Any tips on places that are good resources for researching leins and their order of succession? Thanks all!
Nice going.... fast and easy on your part on the purchase..... can you imagine what you might have had to pay and how much time and energy you might have spent trying to buy them before the sale? if that was even possible.
Texas Tax Sales Services · Merit, TX · Member since 2014 · 256 posts · 166 votes
9y
Yes to question one about occupied houses-especially true in the big cities where the presence of hedge funds, private equity firms, etc is evident. Wasn't always like that just the last few years. There are exceptions of course. Raw land is abundant in Texas. When we buy an occupied property or put a new lease on one, we specify that there is a chance the former owner will redeem and will have the right to evict them. One thing about tax sales is Texas-there are no short answers. Feel free to send me a PM and we can connect and answer more fully on the phone.
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
9y
I see you are in WA state, but want to invest in Texas? How do you do that? For now in most if not all counties you have to bid in person. Many check id, but not all. So sometimes you can have a friend bid, but the way I read the law is it says the bidder must be the purchaser. Every county is different though on how the administer this law.
Every auction is different. You see some go over the retail price and you also see bargains and everything in between. Depends on who is bidding. You want the house next door so your mom can live there, you will pay more than an out of stand investor looking for a deal. Right? All depends on who shows up....auctions only work too if there are 2 or more bidders. Show up as the only bidder and you get a better deal. Yesterday there were 60 or so people at the auction I attended in a very small county. People brought food, drinks, and lawn chairs... I've also been the only one at one auction....so you just never know.
My first thought on raw land is why would you do that to then build a rental. Might as well just buy an existing rental. Probably land for most investors should be about 20% or less of the total cost, so even if you save 50% on the land price in the end you're saving what 10% of the overall cost. Probably way too much trouble for that. Maybe it works, but I think that's 1 in 1000...to get the right piece of land in the right location at the right price to then build a rental.
Almost no home you buy at tax auction will likely be move in ready. That's probably 1 in 10000. I'm making up that number...but I expect rare.
You can potentially move renters in right away...if the property is vacant and needs no repairs to make it livable.
If you move renters in and the owner redeems, then you have to move the renters out. That probably means you want to rent on month to month and add a clause in your lease that says if the owner redeems, they'll have to move out.
There are some websites around that can help you do title research or get in relationship with a title company in the county you are targeting and let them do it for you.
Investor · Richmond, TX · Member since 2016 · 12 posts · 4 votes
9y
I live in WA technically. I am down working in Texas on a job and am looking to eventually move my family down from WA and invest down here. I have read that tax deed sales are more favorable in texas than a lot of other states. As far as getting land and building, I was thinking of doing that only in affluent areas where land comprises a larger portion of the total property value. If the home isn't move in ready, you think it's better to take the chance fixing it up to rent, or better to lose potential revenue during the time period the owner has to redeem? Is it very likely they will redeem? If they do redeem after improvements have been made can you write ir off as a loss on taxes at least?
Texas Tax Sales Services · Merit, TX · Member since 2014 · 256 posts · 166 votes
9y
There are ways around the bidding for someone else in every county. We do it every month. You can do fix up as long as you can prove that it is to "maintain, preserve and safekeep" the property. That phrase is right out of the code. If redeemed, you would get that back plus the 25% per year. We do that every month also.
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
9y
@Account Closed That's just not true of tax sales in Texas. Sometimes it is even better to buy after the sale and get even a better deal if they don't sell the 1st time around.
With tax sales it is very very tough to buy before the auction around here and lots more headaches in most cases.
Time is money and it's easier, safer, and much more time efficient to buy at the auction.
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
9y
@Account Closedundefined
Lots of different strategies work...it's great if they can make it happen...but I think those people are very few and far between. Probably 1 in 100....or maybe even 1 in 1000.
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
9y
@Account Closed Have any idea where they are buying or under what name they are buying? I don't see anything in Dallas, Denton, Collin, or Tarrant County owned by any name Gaylord either before or after the sale.
@Account Closed That's just not true of tax sales in Texas. Sometimes it is even better to buy after the sale and get even a better deal if they don't sell the 1st time around.
With tax sales it is very very tough to buy before the auction around here and lots more headaches in most cases.
Time is money and it's easier, safer, and much more time efficient to buy at the auction.
Agreed. We bought 13 side by side lots ten years ago that were struck off for 350 a piece. They are on a canal that leads to Galveston bay. Was offered 5k for each later on. Counties get very motivated to sell when there is no bids. Plus the six months was already expired when we bought them.
Nice going.... fast and easy on your part on the purchase..... can you imagine what you might have had to pay and how much time and energy you might have spent trying to buy them before the sale? if that was even possible.
Nice going.... fast and easy on your part on the purchase..... can you imagine what you might have had to pay and how much time and energy you might have spent trying to buy them before the sale? if that was even possible.
Honestly I wouldn't know where to begin on how to even do that. I'm sure it would take some doing. I had just found out about tax deeds then. I attended an auction and watched two neighbors fight over the lot in between them. They ran it up to 35k on a non buildable lot just so they could mow more grass. I don't know why they didn't just buy at the minimum and split it.
I got discouraged but talked to some of the people there and learned the term struck off. It was a good day after all. We ended up buying about twenty lots that year. Only one was considered wetlands. (Another term I wished I knew beforehand) But after Ike that changed too. The Storm surge deposited sand on it.
Investor · Richmond, TX · Member since 2016 · 12 posts · 4 votes
9y
What percent of market value does every one typically go on their bid? I noticed that most times counties have market value assigned, are those typically accurate or to be taken with a grain of salt?