One of the ways that I acquire properties to hold for long-term rentals is via tax deed sales. As I was looking for my normal profile rental in February, I came across a nice house on the water in a very desirable part of town. This is a gated community with all the homes built since 2009 and has Italian architecture look and feel. The opening bid was $15k, the amount of delinquent taxes, so I was interested and excited. A 3000 sq ft house, 2 car garage, and walk out basement right near the community dock on the river. As I did my further due diligence, I realized this was a mostly finished home that had never received the occupancy certificate. The current owners had bought it in 2010 for $725k and got a construction loan to have it built, but the builder had never fully completed it. I also soon discovered in doing my title search that the home sat on two lots, lot 59 and lot 60. The next wrinkle was that the original builder/developer had never merged the two lots into one parcel with one tax bill. So the 85% complete house sits on 2 lots with 2 tax bills. Of course lot 60 also had delinquent taxes and was going to go to tax sale right after lot 59. As the day of the sales got closer, I began running multiple strategies through my mind as to how to play this. Of course I knew I needed to buy both sides, or we can say lots 59 & lot 60. I only had $300K available at the time of the sale. I did have a dream about snagging the whole thing for the opening bids of about 30k(15+15)-and that would have been sweet. I estimated that the ARV of this home would be $600k with about $95k of rehab. With these kind of numbers I knew there would be some competition from other buyers, but I hoped they wouldn't see that there was a mostly complete home there as the tax parcel record still showed it as vacant land. Before the sale started, I finalized my strategy of trying for both, but if the first sold for too much I would still make a value play for the 2nd lot. What I didn't want to do was buy the first lot and spend all my money allowing someone else to snag the second lot for a bargain. The bidding started according to my plan, as i was looking to be the high bidder on lot 59 at 100k. Then in the final seconds of the sale the bidding started to raceaway. I followed it all the way up to 192k and then stopped. It sold for 200k. Then the bidding on lot 60 started. Again I was in the lead and there was a lull at 105 k with me in the lead but then this bidder started jumping it by 5K increments. I put in my max bid for 135 k, and ended up winning it at $130,100. So now I owned a lot with half a house on it. I started to play in my mind scenarios as to why someone would buy lot 59 and not even bid on lot 60, as they didn't bid. Do they know something I don't, or do I know something they don't? How would u feel? I have to admit that I started second-guessing my gamble of buying 1/2 a house for $130k and having a "partner" on the other half who didn't know that the house was on these two lots. My rosiest projected outcome was that they would complete the Rehab on the house, list it for sale, and have a buyer ready to close when I would get a call from the title company asking me what I was willing to take to go away and sell lot 60 to clear the major title issue. I figured then I would be in the driver's seat in the negotiations. As it turned out, I got a letter about a week later from the buyer of the other half asking me what my intentions were as we were sort of in this together. He told me that he hadn't even planned on bidding on that property but was just sitting at his computer waiting for another property to come up for sale that he wanted when he sort of saw the bidding take off. He figured it must be something good, and others must have done the research, so he quickly looked it up on the property appraiser and Google Maps and decided to go for it. Well go for it he did and he won not knowing that the next auction was for the other half. With this tough luck story he then offered to buy me out for 10K over what I paid. My dreams of a six-figure payday started to melt away and I started to feel sympathy for his plight. I told him I couldn't go that low comma as I did have a few bills of my own to pay, but I would take 32k over my bid amount and walk away. I just closed yesterday and cleared $29.5 k after closing costs. Can you believe that after we closed he told me that he has already been offered 100k over what he is now into this place for? Who's the real victim here? Nothing like that statement to make a 29 K payday feel insignificant.