Looking for ways to approach homeowners behind on there taxes.

You can view the home owners as potentially motivated sellers and contact them prior to the tax auction. The current owners may be willing to sell, you will need to look at each property for its FMV and whether it would be profitable for you and what may be owed on the property in addition to the delinquent taxes. Sometimes it is better to let the property go through the tax sale which should eliminate the other claims on the property.

Thats exactly what I wanted to know. Makes alot of sense letting it go throught the tax sales auction. In my county there is no redemption period.The owners can redeem up until the auction. Now when I get in contact with a homeowner, I do construct a deal the same as a homeowner in foreclosure, to try to at least help them get something out of the deal rather than lose everything? Also auctions start at the amount of back taxes owed. So I may still got the auction and see what happens. I think its a great way to get property really low to rehabb and/or sell to other investors which is my plan for now. The I would like to tackle some rehabb projects of my own after I build some capital I can work with and live off of, and reinvest. I am just tracking the list and tracking properties I am interested in. Thanks coach.
Kingjuss,

If you are working with them prior to the auction, you are correct, construct a deal that gets you the title and if they require it give them some money to walk away. Be sure your contract specifies that you get good title to the property and have title work done to protect your purchase. I think attending the auction is a good idea, even if you aren't prepared to actually make a purchase this time.

What if you find a property that has already been sold... and you want it? Could you approach the home owner (who can still redeem the property) and work out a deal to deed the property over to you if you pay the back taxes, etc?

I found a condo that is worth 150K and looks like it may owe no more than 10K to redeem the property. (I'll contact the lawyer tomorrow to find out exactly what is owed) Would any of you do it?

So, this is what I am hearing. If a house goes into a tax sale there is no longer a mortgage on the property? If that is the case WOW. I just saw a list yesterday of tons of properties my county was auctioning the liens to, anywhere from a few hundred to a few thousand. This could turn out to be a gold mine if you do your homework. Thanks for the info. Great posts.

Thanks,
Tim

"If you always do what you've always done you will always get what you've always got."

Ps. 34:4 I sought the Lord, and He heard me, And delivered me from all my fears.

You can check to see if the property has a lien/mortgage. Odds are, if it makes it all the way to auction either:

1) There is no mortgage - it is owned outright.
2) The taxes exceed the balance of the mortgage (probably uncommon situation).

First, many mortgages pay the taxes themselves through a mortgage escrow account. The bank keeps taxes current through mortgage payments so the home never goes to the state. Instead, they keep paying taxes and foreclose on it to protect their interest in the mortgage they loaned.

A bank would rather shell out $2,000 for taxes then lose a home that has a $100,000 balance on the mortgage, even if they could only see it for $30,000. The math only makes sense to do so.

I would contact the owners, there is nothing to lose by doing so. If they want to stay but can't pay taxes you could offer a lease back. Generally you would probably have a better shot getting a solid deal with a willing owner prior to tax sale. Tax sales, at least in the areas I have worked, are very competitive and have networks of investors that keep newcomers from invading their turf by bundling together to force people out of good deals. Other areas might be different, I live in a metropolitan, so less populated areas might not have the same competition, but there will likely be some savvy investors willing to fight for good deals.

Also, I recall at least some of the auction required the property paid in full within 24 hours I think - and a pretty solid deposit on the spot. In those it leaves cash buyers or people with sizable lines of instant credit. If your auction has similar rules and you do not have the means to arrange the money then making a deal with the owner is probably the way to go.

To put it in perspective, despite what some commercials say, I have yet to meet anyone or see any house that was bought for $300 or some next to nothing price at auction. The auctions can offer a great discount, but there are no $150,000 homes going for $2,000 or something like that. The deals can sometimes be on par with the ideal discounts of 40-60% below FMV that we try to get with foreclosures. The only way I see sneaking out a crazy deal like buying a decent home for $3,500 is a combination of a small county and pure luck - like the people who normally attend happen to all be out of town on vacation or something.

Not to say it isn't possible, but from all reports I have been able to ascertain it isn't realistic. Maybe someone can relight my interest in tax sales with some exciting, and repeatable reports on deals.

People I don't even go to tax sales anymore! Reason is I Contact The Property owners off the tax sale list.And I do It all by mail or phone! But you have to be careful and not talk them into keeping the property. The people are usually nice and see you as a way out from an unwanted property. I was nervous the first few times but I kept on calling on down the list and got better the more I did it. And you will too!

I believe this is a great option to explore. It sounds quite interesting. Maybe taking a stroll to the court house might be a good idea. Thanks for the info.

Sandra

Saundra take that stroll. My Dear.

Darrell,
Could you please share with us some information on the calls that you make. How do you open the conversation over the phone?
What questions and information do you required?
What is your approach?
What prep work do you look for prior to making your call?
Thanks,
Mati

This is how my phone call to deliquent property owners starts like this:
Owner:Hello
Me: Yes is this Mr. Crews?
Owner:yes it is who wants to know?
Me: Yes My name is Darrell and I'm a property investor.
Owner: What can I do for you Mr. Darrell?
Me: Mr Crews I am interested in the peice of property that you own In Crenshaw county. And I was wondering what your plans where for the property
Owner: Well there is a story behind that property Blah Blah.
Me: Mr. Crews I bought your property from a tax sale and I was hoping that you would like to sign over the deed to me?
Owner: Yes I would I will sign over the deed for $500?
Me: I'll have the paper work drawn up and see you Sat. with your money! By this time my heart was pounding and I made my 1st deal.Well it was that simple. If you need me to call some of the property owners I will We will work out some kind of deal. Hope I have help you! Good Luck>