Anyone ever go the county assesors officer and look into buying delinquent properties? If so, what is the process. I was told you pay the back taxes, the original owner has to reimburse you withing 2 years or the property becomes yours.....any insight fellas/ladies?
I was talking to a DR friend last night about this very subject. He said some of them are 3 years on the buy back to the original owners, they pay you what you paid plus a set interest rate for each of those years as well. Also if you put any structures on the property they have to pay you for those as well, but no interest on the propery additions.
He said when he was doing it the interest rate was around 8% so on a $100,000 property that is $24,000 over a 3 year time frame if they owners dont pay the property off. He said it is better investment returns than anything else out there when he was doing it.
He said when he was doing it the interest rate was around 8% so on a $100,000 property that is $24,000 over a 3 year time frame if they owners dont pay the property off. He said it is better investment returns than anything else out there when he was doing it.
Close but not exactly. If an owner is behind on the taxes for a $100,000 house, the taxes are probably less than a $1,000 a year. You don't take possession of the house when you pay the back taxes unless the property has already been delinquent for three years. The owner has ample time to repay the tax money to you plus 6% on the taxes you paid, not the value of the house. So on a $100,000 house, if you paid $1,000 in taxes for three years you're looking at close to a $500 profit.
After the set period of being behind, something like 3 years, you can take possession of the house. However, you have to make a public notice in a newspaper and with a sign, etc. declaring that you are taking possession of the house. The owner then has an additional 12 months to step up and pay the taxes back plus interest. If they decide to do that at that time, they are then required to repay the amount of the structures/add ons that you may have added.
First of all there aren't many properties like this because if the owner had a mortgage, the mortgage company would step in and pay the taxes to protect their collateral. Second, if someone owns a property free and clear, they are likely responsible enough and have the means to pay their property taxes. Third, there are investment companies that pay the delinquent taxes on all delinquent properties at once. Chances are if you go the assessor, any houses that were delinquent on taxes have already had the taxes paid by one of these companies. Basically it is a really safe way to earn a 6% return with a small chance at a huge upside. Finding the properties that are delinquent before the pros do that is the hard part.
I was very interested in a piece of land a few years back. The owner was delinquent by like $1,500 on a $80,000 piece of land. An investment company had already paid the back taxes on the land. I approached the owner and offered him $75,000 and I would pay the back taxes to the investment company. He declined and lost the property a year later over $2,000 in taxes. I couldn't believe it. Of course the investment company flipped the property the following year for a huge profit.
After the set period of being behind, something like 3 years, you can take possession of the house. However, you have to make a public notice in a newspaper and with a sign, etc. declaring that you are taking possession of the house. The owner then has an additional 12 months to step up and pay the taxes back plus interest. If they decide to do that at that time, they are then required to repay the amount of the structures/add ons that you may have added.
First of all there aren't many properties like this because if the owner had a mortgage, the mortgage company would step in and pay the taxes to protect their collateral. Second, if someone owns a property free and clear, they are likely responsible enough and have the means to pay their property taxes. Third, there are investment companies that pay the delinquent taxes on all delinquent properties at once. Chances are if you go the assessor, any houses that were delinquent on taxes have already had the taxes paid by one of these companies. Basically it is a really safe way to earn a 6% return with a small chance at a huge upside. Finding the properties that are delinquent before the pros do that is the hard part.
I was very interested in a piece of land a few years back. The owner was delinquent by like $1,500 on a $80,000 piece of land. An investment company had already paid the back taxes on the land. I approached the owner and offered him $75,000 and I would pay the back taxes to the investment company. He declined and lost the property a year later over $2,000 in taxes. I couldn't believe it. Of course the investment company flipped the property the following year for a huge profit.
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