You’ve probably heard that investing in real estate is one of the best ways to get rich. That’s true, but you really need to know what you’re doing or you’ll find yourself in a crowd of pickles early on. Don’t worry – even Donald Trump didn’t get to where he is without a little help; and he won’t be your competitor when you want to work off your home tax backlog.
If you want to invest in today’s economy, these properties are prime investment property — almost always mortgage-free — meaning they’re brimming with equity and ready to be flipped for a huge profit. You can’t ignore them if you want to be successful in the years to come – there will only be more of them as back taxes on homes catch up with their owners and they lose their properties on tax sales.
First of all, what does “after-tax real estate owed” mean? Well it’s easy. If a homeowner fails to pay their taxes and defaults, their home will default in the county where they live. It varies from county to county, but usually within a few years if owners can. If they don’t come in and pay the taxes owed on their homes, the county will foreclose and liquidate the properties.
Liquidation occurs in two ways – either the title deed is sold or a lien on the property is sold. Sometimes this is done through auction, sometimes through lottery, and other times through round robin. It can happen in any number of ways, even within the same state. It’s a very competitive way to get real estate. Buying tax liens or deeds has become very popular and with the increase in popularity has come a sharp drop in the profits that can be made this way.
You will avoid all of this. If you want to make money from back taxes on real estate, you need to get ahead of the tax sale investors and get the title deed before the auction, no bid, or after the auction, in the time of repayment when the owner can still save their home (usually about a year).
Well, it’s shockingly simple, and yet if you pay attention you’ll find that almost nobody does. Why? Maybe they are antisocial. They may feel guilty about meddling in other people’s businesses when they have “lost their luck.” Maybe they’re just chicken.
What am I referring to? Simply contact the owner and negotiate directly with him.
Let’s say it again: you can get Rich Investing in home taxes, but only if you can be sure that the property will be yours once you’ve paid those taxes. The way to do this is not to bid on the deed or a lien at the auction – the owner can always come back and pay that and take his deed back right under you. The only way to safely invest in these properties is to deal directly with the owners.
It may seem counterintuitive to you, but you might be surprised at how often these owners are happy to hear from you! By the time the tax sale gets underway, these owners are keen to get out of the tax evasion situation and will be primed and ready to sell you for pennies on the dollar. You will also find absentee owners and heirs who have inherited an unwanted property eager to take the burden off their shoulders and sell it to you for a few hundred or a few thousand dollars.