Tax Auction in Texas

[Felipe Lois Affini]

Hi everyone,

I’m planning to participate in the next (March 6th) tax sale auction in Texas and I would like to have your thoughts about my strategy. I would also like to find anyone that would be planning to participate in any of these counties (mentioned below) auctions, so we could share ideas, experiences, strategies and so on.

I don’t have much experience (I have been to two auctions: in Dekalb County-GA last June, and December in Harris County-TX). For a few reasons (that I could explain in detail anytime) I didn’t buy a property in both auctions.

The counties that I´m interested in are Tarrant, Denton, Colin, Travis, and Bexar.

I still couldn’t leverage the amount of money necessary to invest in bigger properties, so I would participate with 30k.

My first plan would be to buy a small single-family property, fix, rent (i´m thinking for somewhere between 3 to 5 months) sell and reinvest (using 1031).

My idea is to (if I buy any property at the auction) partner with someone that could fund the repairs and manage the work, or I would get (with some local small investor in my area) the money and pay for the fix (although I think it would take longer to complete the process).

Anyway, I’ll need the assistance of a Realtor, Contractor, Property Manager through this path as I won't be there to personally manage all the work related to the property.

As a newbie, any help and considerations would be great.

Thank you

[Richard D.]

@Felipe Lois Affini 30K may or may not get you what you want, depending on turn out and bidding. I know in Tarrant County, most homes that are the type you are looking for get close to market value at auction, largely caused by investors who do not understand what they are buying or who they are bidding against. Attending Harris County auction is a whole different experience than any other county in Texas. Typically, Harris County sells three to four times the number of properties then the next closest counties, Dallas and Tarrant. In Harris County, there are as many as eight different sales going on at one time (one for each precinct). This isn't the case in Tarrant county, where they hold one sale; which you must register and sign in before 10am or they do not allow you to participate. This is also different from Collin county which holds the sales on the courthouse steps at the precinct courthouse. This is different from Dallas, that does not hold the sale in the same location every time depending on the issues within the county building the sale is held.

$30K can get you a property in a C or D area most certainly, but for a B or A area you will want to triple your auction money. Looking at the current list, there are a lot of C neighborhoods available, Hunter's Creek in south Fort Worth is in a solid B borderline A area ( I expect this one to get pulled from the sale). If this property does make the sale, you can expect it to sell for about $70,000+

Yet you can bid and get some great deals too. You must first do your homework on the properties that you are going to bid on to have the best chance.  I have written several blog post here on BP about the topic, best of luck and maybe I will see you on the 6th.