Tax Sale - Focused Investors (Beginner)

[Malayna Johnson]

I'm just beginning the in-depth research of investing in tax sales. My mother and grandmother have done them for years, but I want some other opinions, as they only do tax sales in Indiana. Does anyone invest in tax sales in Georgia, Texas, Florida, or Arizona? These are some places I'm just briefly considering. If so, what are your thoughts? Why did you choose any of these? Have you been having some success? How many properties do you own that you've gotten from the tax sale specifically? What has your general experience been like? Are you flipping them, buy and hold, wholesaling them, etc.? 

[Bruce Lynn]

Right now in Texas we have only a couple of counties doing them online, so if you have to do them in person long distance from IL I think that is very tough.  There are people that do it though.   I really think there is no substitute for seeing the properties in person.  I can't tell you how many properties I've been to, that looked nothing like the google street view picture that is 10 years old.  Been to plenty where the google street view shows a nice house, and you get to the address where the house has burned and there is no evidence of a house and only freshly plowed dirt.   There are redemption periods here, so I think tough to wholesale, as you would also be wholesaling the redemption period.  Some might do it, but it would be tough.  So chances are you will have to hold on to the house or property for 2 years before you sell.

Every state is different, but Texas is a tax deed state, so you are bidding on the property in most cases...that means you need cash at the time of sale....so whatever that is $50,000, $100,000 saw one last month go for nearly $1,000,000 worth about $200,000 in my opinion.  So you have to pay the day of the sale and then likely hold it for 2 years before you can sell.  That limits a lot of buyers.  It limited me on the $1mil sale.  Opening bid was $52,000 or something like that.  I don't have $1mil in cash to wire the same day.   In some places like Dallas county you have to have the cash on you.  As soon as the auction is over for that one property you won, you walk to the front of the courtroom and pull out your cash and put it in the bill counter with the sheriff, no checks, no running to the bank, just pulling cash from your bra, boot, or briefcase right then, right there, right in front of everyone.   Very common to hear $100,000 or more running through that bill counter.

There are opportunities, there are people that do it long distance, but they are few and far between, so you really have to know your stuff and maybe have some boots on the ground in my opinion.