We at The Deed XChange™ are happy to answer your questions about investing in tax deeds.
1. What are tax deeds?
When a county or local municipality issues a lien against a property because the property taxes have not been paid. That lien can be sold to an investor as a tax certificate. Once that lien has been held for a period of time, which varies state to state, the holder of the certificate can enforce the lien. This enforcement is commonly referred to as a tax foreclosure. The result of a tax foreclosure is the issuing of a tax deed. The process of tax foreclosing also varies state to state. However, the basic result is that an investor pays all the back taxes, along with the accrued interest and penalties and is given a tax deed.
2. Why buy tax deeds?
You can own property at a significant discount! Buyers of properties sold at tax deed sales often buy the properties for pennies on the dollar. When you buy properties low you have many options that may include: a primary residence; fix-up and sell for retail profits; holding long-term for rental income or quickly selling for a profit to another investor. Having accurate information and a good plan can make this type of investing extremely low risk with high returns.
3. Who holds tax deed sales?
In many locations, the tax deed sale is run by the Clerk of the Circuit Court. In some larger locations, there is an actual tax deed office. The tax deed sale can also be conducted by the sheriff and also outsourced to law firms.
4. When are tax deed sales conducted?
The date time and place varies from place to place. Just about all must be posted at least once in the legal section of a local newspaper. However, often these newspapers have limited circulation. The best way to know is to read ALL the rules and terms of bidding for the location you want to bid and buy. If you are bidding locally then a trip to you friendly courthouse is a good idea.
Some of the locations we have found are:
- County Courthouse steps
- At the actual property
- In government conference room
- An attorney’s office