DFW REI Club

 Dallas/Fort Worth Real Estate Investor Club

Tax Deed Sale Info

  • 17 Jan 2009 4:51 PM
    Message # 84727
    While listening to Robert Allen's Multiple Streams of Income I started investigating tax deed auction info in Tarrant County.  Here's a helpful link.

    Does anyone in Nubys invest in these?  I understand that Texas has the highest rates (at 25%) in the nation.
  • 20 Jan 2009 11:15 PM
    Reply # 86055 on 84727
    Cindy Carriger (Administrator)
    Vicki and Shawn Stone wrote:While listening to Robert Allen's Multiple Streams of Income I started investigating tax deed auction info in Tarrant County.  Here's a helpful link.

    Does anyone in Nubys invest in these?  I understand that Texas has the highest rates (at 25%) in the nation.


    Hey, thanks guys for the 'helpful link' to the Delinquent sale page of the Tarrant Co. Website.  That is something to consider.  I do feel some instruction on how to specifically work this niche would be in order, and I have yet to do that research and/or study.  Like all things, it takes time. 

    What did you mean on your comment that Texas has the highest rates, the highest rates of what?  25% of property's are delinquent in their taxes?  Wow!

    Maybe if there is enough interest Robin can find someone to come to talk to the group about it.  Hopefully, there will be a place in this website that we can make suggestions for topics we would like to have meetings on, (if there is not already...but i bet folks could let him know via the 'contact us' email).  I know he values the feedback he gets from group 'members' about what they would like to see discussed at the meetings.  After all, it is for the benefit of attendees that he tries to structure his presentations etc.

  • 20 Jan 2009 11:22 PM
    Reply # 86057 on 84727
    Robin Carriger (Administrator)

    Thanks for the link, Shawn.  I've added to our Helpful Links page.

    We have discussed tax sales at Nubys meetings in the past, and there are some Nubys Group regulars who have bought property at those auctions.  Personally, I don't really like auctions of any kind when I'm one of the potential buyers, so I haven't been to a delinquent tax sale, but I've discussed it with other local investors who have.  It's important to note that owners of properties sold at these sales have redemption rights.  Owner occupants have a 2 year right of redemption, and non-owner occupants have a 6 month right of redemption.  It can still be profitable, and there's a little more to the story, but my memory of those details is foggy.  I want to say that if a former owner wants to exercise their right of redemption within their legal time period to do so, they not only have to pay the back taxes, but they have to pay you, the guy who bought the property at the delinquent tax sale, a 25% fee as well.  I would look to someone with more than a "hear say" understanding like mine to confirm this.

  • 21 Jan 2009 9:39 AM
    Reply # 86176 on 86055
    Cindy Carriger wrote:
    Vicki and Shawn Stone wrote:While listening to Robert Allen's Multiple Streams of Income I started investigating tax deed auction info in Tarrant County.  Here's a helpful link.

    Does anyone in Nubys invest in these?  I understand that Texas has the highest rates (at 25%) in the nation.


    Hey, thanks guys for the 'helpful link' to the Delinquent sale page of the Tarrant Co. Website.  That is something to consider.  I do feel some instruction on how to specifically work this niche would be in order, and I have yet to do that research and/or study.  Like all things, it takes time. 

    What did you mean on your comment that Texas has the highest rates, the highest rates of what?  25% of property's are delinquent in their taxes?  Wow!

    Maybe if there is enough interest Robin can find someone to come to talk to the group about it.  Hopefully, there will be a place in this website that we can make suggestions for topics we would like to have meetings on, (if there is not already...but i bet folks could let him know via the 'contact us' email).  I know he values the feedback he gets from group 'members' about what they would like to see discussed at the meetings.  After all, it is for the benefit of attendees that he tries to structure his presentations etc.



    Sorry, Cindy, I should have been more clear about the 25%.  The bidding starts at 25%.  I.e., the dollar amount of the back taxes owed remains constant, and investors at auction bid down the interest rate from 25%.  Still, that maximum is (or was) the highest nationwide.
  • 21 Jan 2009 9:55 AM
    Reply # 86185 on 86057
    Robin Carriger wrote:

    Thanks for the link, Shawn.  I've added to our Helpful Links page.

    We have discussed tax sales at Nubys meetings in the past, and there are some Nubys Group regulars who have bought property at those auctions.  Personally, I don't really like auctions of any kind when I'm one of the potential buyers, so I haven't been to a delinquent tax sale, but I've discussed it with other local investors who have.  It's important to note that owners of properties sold at these sales have redemption rights.  Owner occupants have a 2 year right of redemption, and non-owner occupants have a 6 month right of redemption.  It can still be profitable, and there's a little more to the story, but my memory of those details is foggy.  I want to say that if a former owner wants to exercise their right of redemption within their legal time period to do so, they not only have to pay the back taxes, but they have to pay you, the guy who bought the property at the delinquent tax sale, a 25% fee as well.  I would look to someone with more than a "hear say" understanding like mine to confirm this.



    You're welcome, of course, Robin.  Whatever I can do to help.

    I've done a bit of reading on the tax sales, and the most recent was from the MSI book I mentioned.  According to Mr. Allen and his interviewee, only 3% of investors ever actually get to the point of foreclosing on properties.  The attraction is actually the state-guaranteed interest (up to 25% in Texas) earned on the deed.  Therefore, the 2-year redemption period can actually work to the investor's advantage. 

    Allen and his friend also warned against bidding on a deed whose value was greater than the property on which it was owed, of course.  They also mentioned that part of the reason that so few of the investors ever end up foreclosing is that junior lien holders will often step in and pay the back taxes (and the penalty) to protect their own interest in the property.  The tax deed is senior to all other liens, including the mortgage, so the bank's not going to forfeit their $200K stake for a few hundred bucks in back taxes.

    Since the main thrust of investing in tax deeds is actually the interest paid (despite what most late-night gurus preach), perhaps this topic is not really one for real estate investors.  It's real estate-related, I suppose, but so are some mutual funds.  Still, I wanted to let folks who were interested know where they could go to find out more about the bidding process.

    Cheers,
    Shawn
  • 23 Jan 2009 11:09 AM
    Reply # 87027 on 84727
    I've purchased several tax sale properties in Johnson County and have found them generally profitable.  However, in Johnson County most of the time they only have vacant land for sale.  One has to be careful and do the necessary due diligence, because properties are sold as is with no recourse if you make a bad purchase.  In Johnson County the bidding starts with the total of back taxes, attorney's fees, advertising expenses, etc.  The winning bid is the highest bid.  You don't bid down the percentage from 25%.  I don't think that's done anywhere in Texas.  Other states do that, though.  One of the largest disadvantages of purchasing tax sale properties is that you have to pay cash for the purchases and because of the redemption period, your money can be tied up for up to 2 years.  Hope this information helps.

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