I’m not saying it’s bad to invest in tax deed property. Actually, if you go about it the right way (i.e., avoid the tax sale), buying tax deed property can be quite lucrative. And in today’s economy, more homes are going to tax sale than ever before. Obviously, it’s time to start working tax foreclosures.
But buying tax deed property won’t make you wealthy. Not with all the competition, and definitely not with all the hassles that come along with it – the risk of buying a trashed property, or a property that becomes trashed in the time you have to wait to foreclose… not to mention the huge amount of cash you’re going to have to have available to invest this way.
Even if you do have huge cash reserves for investing, why lay it out there when you can make way more money with an investment where you never have to own a property? And where you can operate from the North Pole, or Zimbabwe, or Mongolia, as long as you have a phone and an internet connection? And where you only need operating capital of about 500 bucks to get started? And without buying tax deed property?
The big secret?
The overages created at tax sale.
Investors buying tax deed property at tax sale bid against each other, as you probably know. Frequently, the bids go way over the amount of taxes owed. In some states, this money is lost to the government right away. But in other states, that money is held for the former owner – most of the time, unbeknownst to him.
That owner? He’s long gone. He probably stopped paying his taxes in 2002 and his house finally just went to tax sale this year. The county likely has no current contact info for him, and can’t notify him of the overage (not that they really want to – they get to keep the money if he doesn’t come to collect it within a year or so). If you don’t find him and tell him, chances are, he’ll never find out.
That’s a pretty valuable piece of information you’ve got for him – valuable to the tune of a 40-50% finder’s fee. And since these funds aren’t held at the state level, they’re not subject to finder’s fee caps laid out in the state “unclaimed funds” laws. That right there is your golden secret, and why almost no one out there is pursuing these owners – no one realizes that they can legally charge 50%.
Talk about a loophole.
Obviously, like anything else hot, people will catch on. The government will probably catch on at some point soon and change the laws. But for right now, and probably for at least a couple of years, it’s perfectly legal. You’ve got a serious money making opportunity where making a 5-figure monthly income is not only possible, it’s virtually guaranteed if you work hard.
Still interested in buying tax deed property? Didn’t think so.
You’ve got to know how to find lists of these funds, and how to find and approach these owners so that they don’t try to collect without you and avoid your fee. Check out our free Insider’s Guide to Making Money With Tax Sale Overages.
