My experience with tax deed sales was this: in my area of the country, when there're a tax sale, a lot of people show up. This drives the price up. Most of the good properties are removed (paid up) before the auction starts. Most of the stuff left are marginal properties or just plain junk real estate. If there're something half way decent (and I MEAN HALF WAY decent) it's usually bid up much higher than you would want to pay. Once in a while you can get lucky and get something good, but this is getting to be less and less as more people find out about this. Extremely competitive.
Once I talked to a retired gentleman in Greensburg PA. They were auctioning a lot of old trailers for around $500.00. He said he had 15 of them and didn't know what to do with them and asked if I was interested in buying some. Went to one in Toledo Ohio. Unbuildable lots were bid up 60% of there tax value. Most of the stuff in Detroit was in horrible neightborhoods, you'd be scared to get out of your car. Also in Detroit, a lot of BURNED UP HOUSES. You know why you get a lot of this real estate at auctions? - bad economy, declining areas, poor neightborhoods ect.
I remember I went to a auction in Malone NY, when I went to look at the properties (some looked good in the pictures) I almost threw up, very depressed areas. I remember a apartment went for $100 dollars - I found out why, it was a shell of a building that needed to be demolished to do anything with it. And by the way, you wouldn't want to do anything with it because it was in a poor declining area. One big house I looked at was old but in fair condition, but it was pretty much in the middle of a cemetery! Most of the houses were in very bad condition, ready to be condemed.
Was suprised at Wellsboro PA, some locals were biding up properties way over their tax value. It was next to some property that they already owned. This is where a tax sale can be valuable to you. Many properties were "no bid" and were small parcels that few people could anything with.
I remember a house in Albion MI was on Ebay. We went to go look at it as it was only an hour away. The city told me it was purchased at a tax sale for about 700.00. The guy who purchased it couldn't even sell it!!. Went back about two months later, it said: Free House and it had a number to call. I found out why, $4000.00 demolistion order from City of Albion for a garage on the property that was ready to fall down. The house was condemned and if you figured the cost to demolish the house and the value of the small lot it was on, I figured it be worth (-3000.00). You figured right, it was on the poor side of town. We actually went inside. Was built in 1896, the floor had a big hill in it and lots of water damage. Made me almost throw up because of the mold smell.
In Warren PA went to a sale. I didn't have time to look at any of the properties, so I just went to the auction. A gentleman in back of me was bidding on some properties. He would say (out loud during the auction) that none of the properties he was interested in he was able to buy because they were bid up too high and kept saying that the people were crazy for paying so high for marginal properties.
Some professionals on Ebay are making money at them. Like anything else, a lot of hard work, time, KNOWLEDGE ect. I'm not sure how they get the house so cheap, (bulk purchases, large sums of money I think) but they do it. By the way, I could start a whole new thread on what I learned about some of the Ebay houses that I looked at in my area.
You won't believe this. I know of a person who got a TAX DEED from a small town in Mississippi. No attorney in town would take the case to foreclose on the house. For some strange reason all of them got scared when you wanted to foreclose on a tax deed when the former owner was still in the house. If you ever do this make sure the property is worth at least 75,000 and you have lots of money to spend on an attorney.
I read some stuff how you can make all kinds of money doing this - not in my part of the country - maybe in yours. I think you could make money 20 years ago, I don't think I will go to any more tax deed sales as most of the property was junk or marginal or bid up too high. I never went to the tax certificate sales, so maybe those are better. That was my experience. Not like they tell you in the books and tapes! Not saying you cannot make money, but like most anything else - it won't be easy.
I would be very very wary of ANYTHING finanacial on a infomercial. Food and household stuff is ok. The only place you'll find things easy about a tax sale property is if you get extremely lucky or at the informercial as the sales person is trying to convince you how great and easy their program is. Personnaly, after going to several tax sales, I don't beleive the testimonies of people that purchased nice looking houses at tax sales like you see on TV infomercials for pennies. I think their paid to say these things.
I've read and heard several places, that these low priced courses are just the sucker bait. Once they know you have a credit card they pester you with sales people trying to sell you 2000.00 - 3000.00 "coaching programs" I have to laught because as I type this there're a informercial right now on TV showing these nice looking houses that people suppost to have purchased for pennies on the dollars. I laught because I compare that to what I've experienced and they make out that this is the norm at a tax sale!!!
