In this video we discuss purchasing properties AFTER the initial auction. You’ll learn exactly how to do it, why you would want to do it, and the disadvantages of doing so.

Transcript:
Hi everyone! Casey Denman here with TheTaxSaleAcademy.com. In this video, we’re talking about buying tax sale properties AFTER the auction.

Now normally we discuss how to buy properties at tax sale auction. You know, how to research the properties, what to invest and how to bid at auction, that kind of thing. But again, in this video we’re talking about buying these properties afterwards.

Now how is this even possible? Well there’s two main reasons this is possible. The first one is if the winning bidder fails to pay. You know, they show up, they place a bid and they’re supposed to pay by a certain time. They just never come back. You know, they decide they don’t want the property or they can’t get the funds that they thought they’d be able to. Whatever the reason, they don’t pay.

So a lot of times, instead of the county reauctioning this property off, possibly a year later in the small counties that don’t have very frequent tax sales, they’ll just hold it in the county-owned surplus inventory. So there’s one reason.

The second reason, and the one that’s fairly common or I guess the more common one, is that the property actually gets no bids at tax sale auction. You know, the property goes through foreclosure, they go to auction it off, and nobody raises their bidder card. Nobody at that auction wants that property. So what happens there is that it can vary from state to state, depending on what kind of tax foreclosure system they use.

In a hybrid state where they use a tax lien and a tax deed state, if the property doesn’t get any bids, then the property will revert to the tax lien holder. But in a true tax deed state, if nobody bids on it, the property reverts to the county, and the county will hold that piece of property as surplus in most scenarios.

Now, how do you buy these properties? How do you buy the properties that go through tax sale auction and nobody bids on them? Or the people that do bid don’t end up paying? Well, the easiest way to do it is contact the county. Contact the department that is responsible for the tax foreclosure in that county. A lot of times, this will be the county department that also handles the sale of these properties after the auction. If they don’t handle it, I’m certain they can put you with the real estate division in the county that does offer it for sale.

So, how do they price these properties? Well, this kind of depends based on local customs, more or less. Sometimes, they’ll actually send an assessor out there and they’ll assess the property at its fair market value, and usually they’re going to end up holding these properties for a long time. Sometimes they’ll put the sales price of these properties equal to what has been owed for the back due tax in that property.

And then furthermore, in some states or in some counties, they actually have a situation where you submit an offer. Kind of like real estate, more or less. You have to remember, the property is owned by the county. So what you’ll do is you’ll submit an offer. A lot of times, it will be a formal or written offer. And when you submit that offer, you’ll usually be required to submit certified funds along with that offer.

In some counties they will actually vote on your offer. They’ll go have a county commission meeting and they’ll say we received a bid from Mr. Damon, for instance, and he wants to pay $50 for these 10 properties that were not sold at the tax foreclosure auction. They’ll go around the room, say yea or nay. Then they’ll sell you the property or they won’t sell you the property.

Now don’t be intimidated here and don’t, by any means, feel that you have to bid or have to submit your offer that is just an outrageous number because they really aren’t concerned about how much they sell a property for. You have to remember, their primary objective here is to return that property to the tax roll as a tax revenue income-producing property.

Now there’s one thing that you have to realize here. If the piece of property is tax foreclosed, it goes to auction and it gets no bids, it is possible that it got no bids for a reason. You know, a lot of times you’ll buy these properties at tax sale auction that’ll just be great deals and you’ll realize that there are certain properties that go without bids every year. A lot of these properties have huge HOA dues or they’re in certain areas where you can’t build. You know, the soil won’t “perc,” for instance. Or they’re in situations that are just nasty situations like it’s got a sinkhole in the middle of the property.

So you have to be especially careful and especially diligent here when you do your research when you buy these properties after the auction. You need to almost double up all the research you do, and then double up and triple the amount of confirmation that you do for the research. You have to know exactly everything you can about any property you invest in. And it’s especially important when you’re talking about buying properties AFTER the auction because a lot of times there is a reason that nobody bid on these properties. Now, every now and then of course, you can find one that slipped through the cracks and you can make a lot of money.

So I hope this has kind of enlightened you as far as buying tax sale properties after the tax sale auction. If you’d like to see similar videos just like this one, head on over to my website at TheTaxSaleAcademy.com, which you can do by clicking the blue link right here next to my head. Again, it will take you to TheTaxSaleAcademy.com. Once you get there, download your free copy of my e-book, The Tax Sale Investing Blueprint, and you’ll be on your way to a very successful tax sale investing career.

Take care, folks! Bye-bye.