We all understand that properties end up at tax sale because the owner failed to pay the properties taxes. Discovering the reason the property taxes went unpaid, however, can have a HUGE impact on you as a tax sale investor!

Transcript:

Hey, everybody! Casey Denman here with TaxSaleAcademy.com. In this video, we’re talking about tax sales and why the property taxes don’t get paid in the first place.

The answer here varies greatly, and this quick, little video is just a sampling of all the different reasons. Sometimes, knowing the answer to this question can be a huge, huge benefit to you as a tax sale investor.

First off, let’s talk about a few different reasons that don’t have that huge of an impact on you as a tax sale investor. Number one is forgetfulness. They get the tax bill, they put it on the shelf and think they’re going to pay it later. Months and months go by, and then they get a late notice. They do the same thing. They put it on the shelf and they think they’re going to pay it later. And when it comes down to it, they just forget to pay the taxes and it goes to tax foreclosure.

Another one is death. The owner of the property just dies. They don’t have any heirs or the heirs that do have it don’t think about paying the taxes or aren’t interested in paying the taxes, so then it becomes a tax foreclosed property.

Another one and an obvious one is no money. The property owner does not have the money to pay the taxes. They might try to save up or work out some sort of payment plan with the county. When it comes down to it, they just don’t have the money to pay the taxes and it goes to tax foreclosure.

Another one is that the property owner moves away. They might live in a house for a long time, move away, and then they don’t get the tax notices or they forget all about paying the tax notices. And since they moved away from the property, it’s not really on their mind. So they move away and they lose the property to tax foreclosure.

Another one is divorce. The husband and wife are going to court and they’re bickering over a piece of property, and the taxes just kind of become a nonissue and they forget all about it, and then it goes to tax foreclosure.

Now, those are just a few reasons that don’t have that large of an impact on you as a tax sale investor. Let’s talk about a couple of reasons that have a huge, huge impact on you as a tax sale investor.

Number one and the first example here is that the taxes are too high. I’ve seen taxes before, especially in the depressed areas of the country, where a property might be worth $10,000, but it has yearly taxes on it that are $2,000 or $3,000. And for you as a tax sale investor, even if you can buy the property very cheap – say $100 or $200 – when you go to sell it, you’re going to have a hard time convincing a buyer that it’s worth paying $2,000 or $3,000 per year for taxes when the property is only valued at $10,000.

Another one along the same line is a special assessment. If you have a piece of property that’s worth $10,000 and you have a special assessment for $5,000 or $6,000 for water or sewer or roads or something along those lines, again, it’s going to be difficult to sell that piece of property with a special assessment that’s nearly half of the actual value of the property.

Another one here is a fire-damaged structure. And I see this a lot. You might have a beautiful house that’s worth $50,000 or $60,000. The taxes are based on $50,000 or $60,000. You see all your research and stuff and you say, “Wow! This is a great house!” Only to discover that it’s actually a fire-damaged house and the buyer either took the insurance money and left town or they didn’t have insurance in the first place. And then here you are, thinking you’re buying a structure. Yet, you’re actually buying a pile of rubble on a vacant lot. And of course, that’s going to have a huge impact on your tax sale investment.

Another one are sinkholes. Especially in the southern states, like Florida, for instance. You might be buying a structure, for instance, and the corner of the house has a sinkhole underneath it. The house is literally falling into the ground and the seller doesn’t pay the property taxes because there’s not a whole lot of interest in it. They might not had sinkhole insurance, for example. And what happens here is that the structure basically starts falling into the ground. They leave the property because it’s not viable to them. You buy it as a tax sale investor and you got to spend hundreds of thousands of dollars repairing that structure or you just totally lose your investment in the first place.

And we’re talking about a few. There’s a wide variety of stuff here. It could be stuff such as water damage. You might have 10 feet of water in the basement. It could be an unusable piece of property. You buy a piece of property. You think it’s a wonderful, buildable piece of property. When you go apply for permits, the county says, “Hey, you can’t build on this property.”

There are so many different examples and I could just do hours and hours of videos on why property owners fail to pay their taxes. But this is just a sampling here. So hopefully, this has reminded you that you have to do your due diligence when you invest in tax sale properties. By doing your due diligence, you’ll be able to discover a lot of times why the owner didn’t pay the property taxes in the first place and how it affects you as a tax sale investor.

I hope you’ve enjoyed this video. If you’d like to see similar videos or you’d like to learn about the very lucrative tax sale business, head on over to my website at TaxSaleAcademy.com. And you can do that by clicking the blue link right here next to my head. Again, it will take you to TaxSaleAcademy.com. And while you’re there, download your free copy of my e-book, The Tax Sale Blueprint.

Have a great day, folks! Take care! Bye-bye.