John, No CA, Wondering About Investing At Tax Sales.
I received the following email. I rarely answer individual emails, but for this one I will answer so others can learn too, and perhaps add their views.
-*-*-*-* THE EMAIL -*-*-*-*-*
Hi - just wondering if you're still investing in deeds and liens . this is something i would like to know more about and i'm very interested in investing myself . i'm in san francisco . have been taking realestate courses for the past 9 months or so .
just wondering if you actually have aquired property through this method . and possibly i could get some advice from you.
john
-*-*-*-*-* RESPONSE -*-*-*-*-*
John--(CA)--------------
I have only done a little lien investing. And it has worked out fine for me. I prefer, however, to get deeds to properties.
Over the past 5 Junes, I have bought single family houses at the county tax resales in Oklahoma state. These are deed auctions when nobody else has bought the liens and the county has the liens and eventually, to get the properties back on the tax roles, they sell the properties, starting at the taxes, interest, penalty and a share of the cost of the sales.
I have been the successful bidder for 14 houses, and have actually gotten the deed for 11 of them. I have either 7 or 8 rented out right now, providing me with over half of my personal income. One is for rent and may be rented, I have to talk to the property manager.
This last June I had my best year yet, in terms of number of properties. I bought 4 houses for a total of $22K. A couple I still need to get fixed up, a couple have been providing rent from the time I bought them.
In the past I have bought one or two properties a year, usually for less than 1/2 of fair market value.
It is not easy to work tax sales these days, as many people go to the auctions and the prices can get way too high to be worth buying.
I also recommend reading the posts to this forum, which is specialized in tax sales and tax liens.
Good Investing*********Ron Starr*********** [ Edited by JohnLocke on Date 02/03/2004 ]
Rickomarch, there is a bit of sour grapes in your last post. Perhaps Joel just missed the promo. It's not the end of the world if Ron got a plug in.
Ron has given much good information and has presented himself in a manner that only brings honor to the REI profession. When I spoke with him, he was engaging, enthusiastic and encouraging. That is also the tone of his posts.
Ron Starr is a good example of a good example.
Readers of this forum need to review posts carefully. There is much very good information in many posts. This time, Ron expressed a way to invest in tax deeds that is very profitable, i.e. Resale Tax Deed sales. Oklahoma is not the only state that uses this technique to get properties back on the tax roles.
If tax deed (not tax lien) sale prices in your area are too high, then cosider looking at a neighboring county or state that is close by. Every state in America is only a plane ride away. Of course, you must know the rules of that state and that county prior to your investing there.
At tax deed auctions, I only bid up to 50% of FMV. And that is what I advise all my students. In this manner, you allow for plenty of room for profit if you flip. It also allows you to be able to lower your price, if you must. Buying at 50% of FMV or less is especially important if you employ a buy and hold strategy, because you will be protected in case of a potential down turn in realty prices, i.e. you can lower your rents and still be profitable.
The best of luck to all of us.
Mitchell Goldstein
For these and other reasons I believe that buying tax deeds is probably the best strategy in REI.
Ronald*Starr,
Your time spent helping the new person understand about our great industry is most appreciated by all.
I tried for over one year to bring Ronald to this site because he is a man of integrity and honor in my opinion, He has helped thousands of posters without the true recognition he so rightfully deserves.
If anyone thinks I made this post because Ronald and I have the same view of investing then you are totally wrong. I made this post because of my respect for the man.
John $Cash$ Locke[ Edited by JohnLocke on Date 02/03/2004 ]
Mitchell,
Glad to meet you.
Now there are two people who I don't agree with. LOL
John $Cash$ Locke