Tax Lien Property Burned Down

[Kyle Meyers]

I bought my first tax liens last year with 1 year redemption. I went to look at the properties today to make sure they were in good condition and discovered one had burned down. Has anyone else had a similar experience?

I am wondering if there is a good way to insure against these losses. I contacted my insurance agent several months ago, but he was unsure of how to write a policy for that. I called today after seeing the damage and he said it may be covered under a separate policy I have which includes a provision for newly acquired properties.

I am only in for a couple thousand right now, but the property would be worth at least $15k and the redemption period ends Monday.

Any input is greatly appreciated.

[George P.]

You can't insure the property if you don't own it. The property is not acquired by you until you complete the foreclosure. And only then the property can be insured against fire and other perils.

Your agent (obviously) doesn't know what he is talking about.

On the side note, buying a 2k lien on a 15k property? By the time you foreclose, you gonna be out no less than 10k (other liens, property taxes, attorney costs). Where's the margin?