South Carolina Tax Sales….Big Potential
Posted by Courtney Lane on Wed, Nov 16, 2011
The possibility of a 36% return on your investment is why South Carolina is such a great Tax Sale for investors. The state also offers one of the shorter redemption periods in the country. The Tax Lien Sales are coming up in the fall, so now is the time to start preparing.
Why We Like South Carolina Tax Sales:
South Carolina is a Tax Lien state which holds their sales annually in the fall. They offer a one year redemption periods. It is a popular state for tax lien buyers for several reasons.
One is the rate. Although not one of the highest rates, it’s nature is such that it should usually provide a return on investment greater than 12% and could return as much as a 36% ROI if the lien redeems in the first month. The return for redemption at the end of each month of the one year redemption period is as follows:
- Month one 36.00%
- Month two 18.00%
- Month three 12.00%
- Month four 18.00%
- Month five 14.40%
- Month six 12.00%
- Month seven 15.39%
- Month eight 13.50%
- Month nine 12.00%
- Month ten 14.40%
- Month eleven 13.08%
- Month twelve 12.00%
Another nice aspect of South Carolina is that the County does most of the work for you in that they do the noticing. You will find a large number of mobile homes on the South Carolina tax sales. You are entitled to collect rent from the owners of mobile homes in addition to interest. Just remember that first word, “mobile”. They can and do disappear.
South Carolina Bidding Methods: The bidding method is the highest and best bid, meaning that the lien is sold to the individual willing to pay the most for the property. The full interest is earned on the full amount of the bid, including surplus or overbid, and the surplus or overbid is returned to the lien buyer upon redemption. There is an exception to this in that the interest you earn cannot exceed the amount the Forfeited Land Commission would bid for the property. This means that you can bid 8.33 times the amount of taxes and make the full return on your investment. Any bid above that amount will reduce your return.
Importance of Due Diligence: As in all states, I cannot over emphasize the need for good due diligence. 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 of the cities, 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 manual you should avoid most mistakes.
If you would like more information about the upcoming South Carolina Tax Sales, click here and download our whitepaper on South Carolina.
