Transcript:
Hey there, it’s Casey Denman here from TaxSaleAcademy.com. Fist off, I want to thank you for taking the time to watch this tax sale training video. If you enjoy these videos and would like to learn more about tax sale investing, make sure you hit that red subscribe button so you don’t miss out on future training videos.
Today I want discuss the tax sale property that doesn’t exist. I remember hearing an auctioneer one time, who had a rather brash personality, sell a property at a tax deed sale and immediately follow it up with “Congratulations, you just bought yourself a tax bill.”
Everyone laughed, thinking he meant the bidder now had taxes too pay with his property. But the statement seemed to go over the heads of many in the room, except for the seasoned investors. The fact was that there was no land. There was no building. There was nothing. This person literally bought the rights to pay a tax bill and not much more.
I’ve spent a good portion of my life educating others about this incredible business. I’m so grateful to know that I have had a positive impact on so many people. And much of this is because of what I teach you not to do. This video is no different, but it actually takes it a step farther. A lot of my due diligence is learning about access, condition, value, that kind of stuff. But, what if it doesn’t even exist in the first place.
I remember sitting in Harrison County Mississippi in 2006. This was not too long after Hurricane Katrina decimated the gulf coast, including much of Harrison County. There were a number of tax liens that I was interested in. Most were land, because of the obvious impact Katrina had on many of the structures in the area. But the name of one condominium complex kept popping up over and over again. Just for curiosity’s sake, I decided I’d drive by it to see just how impacted it had been. Impacted isn’t the correct word though. When I drove by it, there was nothing there. Nothing. The entire building had been swept from its foundation and was completely gone. And obviously stories like that are plentiful. But had I bought that lien, then foreclosed it, I wouldn’t had a tax bill. And likely some legal issues to deal with as owners of non existent condos sue each other over what to do. Sounds fun, right?
The fact is that these types of things exist routinely. It’s not just landlocked properties, wet properites or that kind of stuff to worry about. The fact is that if you’re looking for all of those types of issues and you’re doing your proper due diligence, you’ll quickly realize when a property doesn’t exist. It’ll become apparent real quickly.
But what happens is that these properties might have extremely low opening bid amounts. It might be the $500 property sandwiched between $10,000 opening bids. Or it could be the $50 property surrounded by $1,000 properties. This will catch the eye of many people. Especially those who are extremely green to the industry and buy off price.
Obviously, $50 or even $500 wasted to learn a lesson might not be the end of the world for you. You might even think that you’ll just let the property go back through the tax foreclosure process, you’ll count it as a lesson and move on. The problem is that many counties won’t allow you to bid on future properties IF you have lost a property to a tax foreclosure. In some areas this is a statewide issue. So buying the wrong property and letting it go back after YOU don’t pay the taxes is a great way to end your tax sale career.
So, let me go over three examples real quick.
The first is the one we’ve discussed. It’s the air condo. The condominium complex that doesn’t exist. The complex might have never been developed, it could’ve been washed away, burned down, demolished, or whatever the case may be. But there is not building there. You simply own a little box of air. And unless you own all of the little boxes of air where you own all of the voting rights, you can’t do anything with that little box of air . . . except, well, pay the tax bill on it every single year. This happens, a lot. Be very very careful.
Another one is the nonexistent subdivision. I’ve seen entire cities that were supposedly developed 20 or 30 years ago. And then you get there and nothing exists. In this case it might not be a true nothing at all, as in you might be able to buy a piece of land but you can’t access it, you can’t build on it, you can get water to it, the city and the roads don’t exist. I remember one of the first times I came across this I probably searched for 20 hours trying to find out more information about all of these properties in this one subdivision. I used every single tool imagineable. But, I realized that there was nothing there. No subdivision. No city it was supposed to be in. It was an odd site truthfully.
The last example are the more random or unusual properties. I’ve seen 1/100th ownership shares in building sold. Yet that building didn’t exist. I’ve seen marina slips sold, but the slip didn’t exist. I’ve seen situations before where a developer or property owner will combined two parcels. They’ll take one parcel number and the other parcel number should be voided out. Yet, it’ll make it’s way into the system somehow and then be sold. That parcel number is attached to nothing.
I’ve always said that the tax sale business is a phenomenal business. It’s lucractice, extremely rewarding to be able to help, and you can do it in a way that benefits so many people. But it’s also a business that take knowledge and effort. If you just jump in and starting buying every single cheap property that exists, you’ll likely end up with something that doesn’t really exist afterall.
I’ve had those phone calls from folks who spent quite a bit of money on properties that they thought existed. I’ve dealt with it. I’ve heard people cry. I’ve seen the consequences. But at the end of the day, your research is what determines your results. Start htat research by making sure that it at least still exists.
I hope this video was helped for you out. I post these videos to serve as your resource and truly hope you find htem helpful. There are also a whole bunch of links in today’s show notes that will help as well. One of those will take you to TaxSaleAcademy.com, and once you’re there you can join The TaxSale Academy for our most advanced, step by step training.
Thanks so much for watching!