subject: Homes Lost To Taxes - How To Get Them For Super Cheap [print this page] If you want to invest in real estate but are on a shoestring budget, you'll have to learn to get homes lost to taxes outside the tax sale. Bidding on properties at tax sale won't get you any good deals these days - too many investors have flooded the market, and most good properties get bid up close to retail value at the auction.
That's okay - you don't need the tax sale. Besides paying too much for homes lost to taxes there, you also won't be able to inspect the property beforehand. Inspection is really a necessity. You never know what you'll be walking into if the extent of your inspection has been a drive-by.
The best way to get homes lost to taxes doesn't require tax sale, and is actual the cheapest way as well - by buying directly from owners. Now contacting owners during the delinquency period may not net you the results you're hoping for, but if you wait until after tax sale, you'll find a treasure trove of properties the owners are now faced with losing permanently if they don't act. Also, the fact that their home has been "sold" (even though they have a year to redeem in most cases) induces an important psychological "must sell" shift that will work to your advantage.
You can often strike deals during this time period for $200 or less.
Another way to make money from homes lost to taxes is by reconnecting owners with their overages. When more is bid at tax sale than is owed in back taxes, the "overage" that's left over is usually due back to the owner (this is true for many other types of real estate overages as well). Unfortunately, most owners don't realize this and assume they've lost everything.
Since this are sizable sums, and they aren't regulated by state law, you can legally make some hefty finder's fees (in the 30-50% range) from these real estate created funds. These overages escheat to the government after a specified period of time, so owners desperately need to be informed or will lose everything. You'll be pleasantly surprised how grateful they are to pay 30-50% for an unexpected windfall.
