Posted by Courtney Lane on Mon, Aug 16, 2010 @ 05:12 PM
You know the saying….”don’t mess with Texas.” Well, when it comes to Tax Sales in Texas, we highly recommend messing with Texas, since as they say “everything is bigger in Texas.”
Texas is a redeemable deed state and jurisdictions hold their Tax Sales on the first Tuesday of every month. Texas also offers one of the highest returns available in the country from tax sales, making it a favorite of mine.
Why We Like Texas Tax Sales:
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Texas is what we call a redeemable deed state, meaning that the sale is a deed sale but the title given by the deed is subject to a right of redemption.
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This right of redemption varies from 6 months to two years depending on the type of property sold.
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As we mentioned earlier, Texas offers one of the highest returns available from tax sales, being a 25% penalty on the amount bid for redemption during any part of the first year after sale and an additional 25% penalty for any portion of the second year of the redemption period, assuming that the property qualifies for a second year. This means that a property with an outstanding tax liability of $2,000.00 and a market value of $100,000 may sell for $50,000.00 and the redemption amount received by the deed purchaser would be $62,500.00 for any redemption during the first twelve months and $75,000.00 for redemption during the second year, if applicable.
Texas Bidding Methods:
The bidding method is the “highest and best bid” wins method, meaning that the individual who is willing to pay the most for the property is the winner. The winning bid must exceed the judgment amount that is recorded or the market value of the property that the court has set, whichever is less.
Importance of Due Diligence:
Because of the likelihood of ending up with the property we strongly recommend that any potential investor does their due diligence. If you are familiar with TaxSaleLists.com, we are always emphasizing the importance of due diligence. With that said, Texas is one state where you better make sure you are following proper due diligence procedures since there is a very low redemption rate, meaning you have a very good chance of ending up with any properties you are the highest bidder on. We strongly suggest that you attempt to look at as many properties as you can. If you follow the due diligence process that we suggest in our training manual you will avoid most mistakes.
Lists:
The lists published by the most of the counties have no physical addresses for the properties, so it is necessary to get the situs addresses and determine location of the properties. Each city, like all cities, have undesirable areas that you may want to avoid. The reason I say may, is that I have found that good properties in bad areas are not necessarily a bad investment.
www.TaxSaleLists.com does offer “data enhanced” lists for a large number of Texas counties, this means that we can provide the assessor information for these counties.
If you would like more information about the Texas Tax Sales, click here and download our whitepaper on Texas.
Posted by Courtney Lane on Wed, Jun 30, 2010 @ 04:57 PM
If you are looking for a way to invest in Tax Sales this summer, we recommend you consider Georgia for a great opportunity to make money.
Georgia sales are held year round on the first Tuesday of the month unless that day is a holiday and they will then be held on the next day. Most jurisdictions do not hold a sale each month, however there are typically sales happening each month
Why We Like Georgia Tax Sales: Georgia is what we call a redeemable deed state. What that means is that Georgia sells a tax deed that has a one year and 45 day redemption period. What we like best, is that it offers one of the highest returns available from tax sales, being a 20% penalty on the amount bid (including any surplus or over bid) for redemption during any part of the first year after sale and an additional 10% penalty upon filing the Notice of Foreclosure of Right of Redemption (which can be filed one year and one day after the sale).
What that means for investors? It means that a property with an outstanding tax liability of $2,000.00 and a market value of $100,000 may sell for $50,000.00 and the redemption amount received by the deed purchaser would be $60,000.00 for any redemption during the first twelve months and $65,000.00 for redemption after the Notice of Foreclosure of Right of Redemption has been filed. If the buyer files all notices in a timely manner they will either get the property within a 14 month period or make an annualized return on their investment of over 26%.
Simply, this is exactly
why we like the Georgia Tax Sales.
Georgia Bidding Methods: Georgia Tax Sales bidding method is simple. The “highest and best bid” wins, meaning that the individual who is willing to pay the most for the property is the winner. This means that there is usually a substantial surplus or overbid that occurs. This surplus is not returned to the buyer by the taxing authority; rather, it is part of the amount that the property owner must pay to redeem the property. The significance of this is substantial, since it makes the property owner pay an amount that is substantially greater than the tax obligation owed. In the example given above, the property owner would have to come up with $60,000.00 to pay a $2,000.00 tax delinquency.
Importance of Due Diligence: If you know anything about us, you know how important we think the due diligence process is for every Tax Sale. With that said, we believe it might be is even more important for Georgia. Why? Due to the bidding method used, and the likelihood of substantial surplus/overbids that occur, we believe investors have a very good chance of being the next property owner. The lists published by the most of the counties have no physical addresses for the properties, so it is necessary to get the situs addresses and determine location of the properties.
Each city, like all cities, have undesirable areas that you may want to avoid. The reason I say may, is that I have found that good properties in bad areas are not necessarily a bad investment. Again, I strongly suggest that you attempt to look at as many properties as you can. If you follow the due diligence process that we suggest in our training program you will avoid most mistakes.
If you would like more information about how the Georgia tax lien sales work, click here and download our white paper on Georgia.