Buying Tax Deed Property

[Patrick Garrett]

Are there any investors buying tax deed properties? If so, what are some of the risks to avoid?

[Bruce Lynn]

Sure there are all kinds of risks....

Here are some:

1.  Most often you can't see inside the property....so you don't really know the condition when you buy.

2.  Lawsuit notifications can be faulty, so perhaps a year or two down the line the suit gets tossed if challenged and you get your money back, but no interest.

3.  Difficulty of obtaining title insurance.

4.  Depending on where you are, the cost of filing quiet title lawsuit if needed.

5.  Redemption periods depending on where you are.

6.  If there is a redemption period, then you may have to rent month-to-month and that might be risky.

7.  There could be liens on the property that don't get wiped out.

8.  There could be a cost to removing the liens that should be wiped out by the suit.

9.  You may have costs for properties you don't buy.....like title searches that show info that make you not want to buy.

10.  If you leave the property vacant during the redemption period if you have one can create issues.

11.  Cost of evicting the current resident....and damages if they don't want to go.