The Sale of Tax Deed Parcels

Article Written By: tedthomas

There are two ways of investing in tax defaulted real estate. One is to acquire a tax lien certificate and earn interest on your funds; the other is to invest in a tax deed and then foreclose on the real estate. In either case, the property becomes delinquent when taxes aren't paid. Then the county assigns a tax lien or deed and sets an auction date. People like you are allowed to bid the liens or deeds.

If the parcel owner doesn't settle during the redemption period, which lasts anywhere from days to years, the real estate is transferred to the investor.

Tax lien certificates draw the interest rate. If you don't get paid you get the property. Tax deed sales mean you are actually bidding on the parcel; you receive the deed to the land or home ordinarily without any homeowner's loan tied to it because the county has previously foreclosed on it.

But the most important thing to realize in order to make a handsome profit on your tax deed investment is realizing how to sell it. This is called an exit strategy and it's the most important part of tax deed investments. Selling is how you get reimbursed; it's how you receive your funds back and then some. Your aim is to get quick cash from ardent buyers.

The most successful people know how to sell a house within days of buying the tax deed. Chances are you're not going to live at the house you acquire at a tax deed auction. The way to realize a profit is to sell it.

At the tax deed auction, bidding usually begins at, or close to, the amount of delinquent taxes payable to the county. This means that you can often buy real estate at 20 to 30 percent of its market value. So a home offered at $100,000 on the market could be purchased for a mere $20,000 if you are a savvy bidder and don't have a lot of buying competition.

Before bidding on any parcel, you must do your analysis first. It does you no good to acquire a tax deed on a property that is not valuable or one you can't sell immediately. Take a considerable look at the parcel and make sure you can accomplish something with it once you have it. It is beneficial to look at other sales in the neighborhood and see how much comparable homes are being offered for.

Another issue that influences your decision is the shape of the property. This can be tough to assess but if you plan for the property to be in subpar condition before you purchase, you are bound to acquire it at a good price which permits you to make improvements, if necessary.

Finding a purchaser as promptly as possible is the secret to turning a fast profit. Chances are you are not a real estate agent, but you can perform some easy things to announce the property for sale. A for sale sign posted on the parcel is a good start.

About the Author

Ted Thomas - Visit Ted's website at www.tedthomas.com.

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