Purchasing Back Tax Property - How To Get It For Cheap, Or Profit Without Owning Property

Purchasing back tax property is not as challenging as you may think

. While it has become considerably more difficult to get tax foreclosure property by bidding at auction, back tax properties are still available all over the place for a bargain - if you know how to go about finding and buying them.

If you attempt to bid at auction, you'll find a few things are true. First, you'll have a lot of competition, and that is likely to get worse in the future. This won't allow you to get a great deal. Second, you'll have to pay for your entire bid, in cash, at the sale. Third, you won't be able to inspect the property beforehand. The only surefire way to go about purchasing back tax property cheaply is to get it directly from the owners, after tax sale.

Towards the end of the redemption period (the year or so after tax sale when the owner can still redeem), there will still be many properties left unredeemed. Purchasing back tax property from the owners of these homes, at this specific point in the process, is a gold mine. These owners are desperate and willing to negotiate a very, very low price for their properties, and sometimes are even happy to sign over the deed to you for nothing, just to be done with the ordeal as soon as possible.

If you're considering purchasing back tax property as an investment but really hate the idea of owning property, there's another very easy way to make a lot of money from tax foreclosure property, without ever having to own anything. When more is bid at tax sale than is owed on back taxes (same for mortgage foreclosure) the overage is held for the owner to come in to claim. Since many of these owners are long gone from the property, or for whatever reason have abandoned the situation, they often don't know about the tens of thousands of dollars they have waiting to be collected. After a while, they lose it permanently to the government.

By finding records of these funds, locating their owners, and connecting the two, you are entitled to a finder's fee. And since these funds aren't governed by state law, there's no limit to the finder's fee you can charge. On a typical $15,000 overages with a 40% finder's fee, you're looking at $6,000 for what amounts, generally, to a few days' work.

by: Maggie Dawson

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