tax sale strategies - 2

The other main group of investors is mainly interested with getting a property at the least expense that they can.

This investor will go after most any "distressed" property in hopes that they will actually be able to get the property deed after redemption period is complete. They will not bid up the beginning bid much, as their intent is to fix up the property and sell it. They need to keep the purchase price down because they understand that it will take quite a chunck in repairs to get this property to sellable condition.

One way to accomplish this is in the due diligence period of usually 2 weeks to 1 month at most prior to sale. They will look at the tax assessors information about every property, locate them, and do a driveby to view the property. If they can determine by that driveby that the property has been abandoned they may choose to actually find a way inside to get a look at what fix up costs will be involved.

With this total cost knowledge in mind they will attend the sale with a maximum purchase price in mind for the property. They are looking to find a "gem in the rough" that they can polish up and make shine for the end buyer who will feel like they are getting a great deal because the property is usually priced below market value because of the cheap purchase price, even including repairs.

Their other option that they use to get the property at the least possible price is to locate one for which there is no liens on (except the taxes, of course), then locate the owner and offer to pay off those taxes for them prior to the sale and give them an additional little sum for the deed immediately. This avoids having to wait for the end of the redemption period and allows them to start the fixing up process right away. If they feel that many other investors will bid up the property too high for them to obtain a profit, they will use this process to eliminate the bidding and secure a sure cost. It is very effective, but if they miss any liens in their search then they must pay off those liens in order to get a clear title (oouch).