How to Find and Invest in Tax Delinquent Properties

Tax delinquent properties can be a great opportunity for investors, especially for those looking to enter the real estate market at a lower cost. These properties become available when the owner fails to pay taxes, allowing the government to lien them. Investors can then buy these properties through tax sales.

For investors, tax-delinquent properties can bring big profits. However, it’s essential to know the risks to avoid regrets. Carefully check their condition, compare different properties, and, most importantly, hire professionals. Here’s a guide to help you successfully find and invest in these high-return properties.

Public Auctions

This is the leading source of tax sales, usually initiated and run by the local government. As a potential investor, look for announcements on the municipal website or public notices at their office board. The publication often includes details such as the kind of property on sale, the auction date, requirements, the registration deadline, and the procedure.

Physical Examination of a Particular Area

Another way to invest in tax delinquent properties is by thoroughly examining a specific area. First, you must decide what type of possession you want and then look for one. Sometimes, knowing which property the owner defaulted on can be complex. Therefore, liaising with a local investor for more guidance is best.

Ask a Real Estate Agent

Real estate agents are the core experts in the industry and can quickly help you locate a tax-delinquent property. This is because they regularly work with all sorts of belongings and know the neglected ones. Some realtors focus on this property type and can guide you through the investment process. You have to expound on the features you’re attracted to and let them do the job.

Direct Contact

You can also directly contact a property owner to express interest in acquiring their tax-delinquent property. This could be someone you know, or you may have found their details on the list of property tax defaulters.

It would help if you approached this technique professionally to avoid upsetting the person or making them feel incompetent. In-person visits are advisable, but you can also call or email them. Be alert to possible scams, as some people pose as sellers.

Attend a Current Tax Sale

Only a few people seek to acquire property on the day of a tax sale event. Others learn about an upcoming function to prepare their finances in advance. This also equips you with adequate knowledge to navigate the auction process. You can use the rest of the other ways to learn about tax sales.

Join Real Estate Investment Groups

You can also find tax-delinquent properties by joining a real estate investment group. These are localized or inter-regional communities of real estate agents, buyers, sellers, and other industry experts. Here, they share various ideas and insights about the latest trends in the sector. Those include announcements about tax-delinquent properties you can invest in.

Connecting with the Property

Tax sale spans a series of steps until you can confidently refer to yourself as a successful investor. The first thing to do is connect with the property you wish to invest in. It can be through any of the above techniques, assuming you conduct thorough research into its rewards and risks. If it’s a public auction, you must register as a bidder. Direct purchases require you to meet with the property owner and continue the transaction.

Negotiate the Offer

The second step is to negotiate the seller’s offer. This applies when it is a direct purchase. You must attend public auction bidding, often involving a group of interested buyers vying for the top price. After completing this stage, you can pay for the property.

Pay the Dues

Here, the investor pays the stated value and clears the property’s outstanding tax arrears, plus any other costs associated with the property. Most direct or government sellers require buyers to pay the total price soon after negotiation. Others accept at least three quarters with a short period to clear the balance.

Get the Title

After you pay for the property, you are nowhere near acquiring the title deed. The property owner can be offered the opportunity to redeem their property before the buyer pays the total price.

If they fail, title clearance continues, and they lose the property entirely. In the case of a statutory tax sale, homeowners hardly benefit from the sale as the excess money is used for national development purposes.