Additional opportunities with obscure assets obtained from tax deed sales
In many counties throughout the nation, you will come across tax lien certificates secured to obscure assets like mineral or water rights, easements, or even random or odd shaped parcels of land. What do you do with these? Do they have any potential? They might!!
Let’s define and describe the potential with each of these assets:
• Mineral Rights. In some areas these are separate from the property. They offer the owner of these the right to take minerals from land or to receive payment from the excavation of such minerals. If there was a recent discovery of a certain mineral in the area, you might consider buying these.
• Water Rights. These are the same as mineral right in all ways except it is water that you have the right to extract and use as you wish. A developer might want to build in the area, but he needs a certain amount of water rights to do so, you might be able to sell to them. Likewise, if a parcel of land Is going to be used for farming, but they do not have water rights, you can sell these to them too. You might be even more creative and rent or lease these water rights to them. Now you have a residual cashflow from this obscure asset that no one wanted.
• Easements. Easements are structures or restrictions on land for the purposes of utilities, drainage, roads, communication towers, billboards, etc. They can offer rights of way to neighboring properties. These might be resold to other parties for a profit, especially if you reserve the right a way to their land, they might be pretty interested in buying that from you. Utility companies may not catch the easement lien prior to it being turned over to you, they might pay you a descent amount of money to get that back. You could rent it to them too, so you now have a continuous stream on income coming in from this asset.
• Personal Property. Personal property is most often mobile homes on leased land. Most of these little structures do not have value in the eyes of the county nor most investors, but if you understand the market and how to reposition it to a motivated seller or renter who wants to live there, you can make a great rate of return on your initial investment. Most of the liens placed on these properties are very low in comparison to other assets that are taxed within the county lines. You might pick one up for a great discount and be able to resale it to someone with seller financing. Essentially, you have mailbox money and not land lording headaches. You could have an excellent rate of return. Most counties will not take these properties back on tax deed either, so they are eager to sell them even over the counter.
• Odd Shaped Land. Your creativity will come into play here too. There are a lot of parcels that never sell at tax lien certificate auctions, because they are odd shaped or offer difficult terrain to do anything with in the average joes mind. What if you can across a tax lien certificate on long narrow parcel of land that backed up to en evergreen farm? How about when you acquire the property you offer to sell it to the farm? How about a thin strip of land in between two commercial buildings? You could pave it and rent it out to the local businesses as a place to park extra vehicles or machinery. What about a parcel of land on the side of a hill in a major metropolitan area? Maybe a billboard could go there and produce a nice monthly cashflow? What about land that is mostly swamp land, but some of it is right next to a major roadway? A cell phone company might be interested in putting a tower there and renting it from you.
The possibilities are limitless for these assets. If you have a little imagination and an understanding of the local market, you could make some great money right away or cashflow over time from properties that most passed up as worthless.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125