All Forum Posts by: Sundai S.

Thanks Roy!  That is exactly the sort of things people new to the business need to know!  You're right that I had not found that in any of my previous research.  Thanks again Roy for your sharing your real world experience.  My previous conversation w/ you is the reason I started this post.  

Sundai

Hello all,  I have been researching the tax sale auction process for a few months, researched each propriety on this months list.  I have taken an online class and have access to online GIS, CAD, and county clerk records.   

So now I'm seeking the wisdom that can only come from real world experience.  

Please leave a comment concerning, something you wish you knew, or had to learn 'the hard way' or a bit of advice about clearing title clouds, dealing w/ residents, anything that the folks trying to sell you their book or class don't tell you.  

Thanks in advance!  

Try searching the foreclosure court documents for the MERS # (it's like an acct. # for the foreclosure).  You may be able to quickly find the correct person at Fannie Mac w/ that info.    

Generally speaking they are listed for at least 3 weeks, and auction takes place on 1st Tues of the month, so July 7th.  You may be able to find the listing on the county Sherrif's website, with the details of time/place of auction.  Cash (cashiers check) only and you want to research the properties to make sure there are no 'superior' liens like state or federal liens.  

Texas is a 'redemption state' so if you want to invest locally, tax deeds are what you should research.   Basically when people don't pay their taxes the county can foreclose and then auction their property.  This in a nutshell 'wipes out' liens Like mortgages and 'mechanic liens' (if they didn't pay the roofing company etc.), but does NOT wipe out  'superior' liens like those from the state and/or federal Level (Childsupport, IRS, or EPA liens for example).  This is why you could still be liable for large amounts if you buy a property w/ a superior lien against it.  

There is a lot of research involved in "due diligence" in order to find properties that are worth the investment.  And then unless you take legal action to clear the title, the properties can have hurtles when trying to sell.  And generally spec king you'll need to hold the property for at least 6 mon, until the end of the redemption period to sell.  

I am beginning to invest in tax deeds myself, I believe that if you do careful research, and buy for the right amount, there is substantial profits to be made.  I recommend you watch all of the free youtube videos from 'Thetaxsaleacademy.com".  I recently bought a monthly subscription to his site and have found it very educational. 

Good Luck!  Sundai Segadi

Most liens like mortgage or 'mechanic' liens (if the homeowner did not pay the roofing company), will effectively be wiped out by the tax deed sale.  But other 'superior' liens will not, for example state liens (taxes or child support' etc) or federal liens like the IRS.  During your initial research of the property list you should look for the county civil court records to see if any of the above have been named as defendants in the suit to foreclose, that is quick and can easily be done from home (in my county at least).  That will help weed out a few properties.  Then if they make it through your other filters (like I won't live in that), the tax/value ratio is good, etc., you probably end up with a hand full of properties worth doing the title research on yourself.  Probably a good idea to research how to do that in your county.  Then if you are really serious about a property, and it is a substantial investment, hiring a title company or abstractor to perform the title search. 

Hi Rick, I to am interested in investing in Tax Deed Auctions and wanted to ask if you have started investing and if you have found any particular tool or advice particularly helpful?  I have found (through research) a few cons to Tax Deed properties   For example mortgage's and most liens are 'wiped out' by the auction but the buyer will still be liable for and State or Federal liens, like child support, state tax liens etc.

Thanks Robert!  I'm just doing a but of preliminary title searching, to see if a property/properties that have been foreclosed by the county for auction at a TAX DEED auction, is a good candidate/investment.  My plan (common to tax sale investing) is to do preliminary title search myself and then if I have narrowed down to 1-3 properties, then pay abstractor to title search before bidding/interesting.  

So any tax deed investor's have experience/advice n this topic?  Since in cost $50-100 to have title search and would possible only take me another 10-20 at County to do additional preliminary research.  Want to do all due diligence w/ research, just want to make sure I'm investing time/$ in the right places.  

When researching the title of a prospective tax deed property, how far should you go back?  For example:  The current owners bought the property in 1985, through standard closing with title insurance issued.  Is there a need research chain of title further, or is ok to "ASSUME" that title is clear prior to the 1985 sale, because title insurance was issued?  

Right, I was just wondering if it is feasible business model to sell the Tax deed property with a "cloudy title" to an investor at substantial discount, during the redemption period.  It would be a high risk/reward ratio for buyer and a quick profit for tax deed investor (me).

I have been watching videos from an experienced investor in Florida who uses this as his business model, and just wanted to get feedback as to if it is feasible in Texas.  

I gave the example above of buying tax deed at auction for approx20% market value and then selling to another investor (during redemption period) for approx60% market value.