How Much Do I Really Pay To Purchase A Tax Sale Property In California???
I really want to invest in real estate but I don’t have the money to do it and I am currently unemployed. I saw an ad on tax sale properties saying that one can buy properties for literally a few hundred dollars and some for a few thousand. What I really want to know is, whats the catch?
well you need to be in the right place at the right time with cash in hand but yes you can get them for pennies on the dollar but what you are getting is a tax lien rather than the property so the municipality will either pay you with int rest or you get the property after some hassle this is how wealthy people get wealthy
Comment by Web Maven — December 30, 2009 @ 4:34 am
One catch is, if the property is improved (has a structure on it) you will generally not be able to inspect the property before buying it. So you would be taking it “as is.” I think people and companies who make money at this probably have enough money to buy several such properties at a time, and they can average out the risks and make a good profit in the long run. But they will need to have plumbers, electricians, carpenters and painters available to do repairs as necessary in order to make the structures habitable — or they must have the skills and time to do the work themselves, obtaining permits and following codes as required.
If the properties are just vacant lots, the risks are different: they just need to know how much land is worth in a given area, and be able to afford to pay taxes on the properties until they can be sold.
Comment by funkucla — December 30, 2009 @ 4:44 am
Tax sales leave the property owner with a right to redeem depending on the state for 2 to 7 years, by repaying the taxes plus whatever penalty the legislature enacts. So you don’t get possession of the property when you pay taxes. In addition, any other liens on the property such as a mortgage still are on the property and are not removed by the tax sale, so that is why some properties at a tax sale (where the owner took out 125 percent financing on 2 loans) have no value to the person paying the back taxes. If there is a mortgage you can be sure the mortgage company will redeem the property once they find out the property owner didn’t pay the taxes. What you get at a tax sale is some interest on the payment, some time in the future. That is what people are bidding on. Why do you think you can get rich without any money?
Comment by tp3bop — December 30, 2009 @ 5:17 am
Go to http://www.zillow.com to get an idea of the worth of the property. It’s not always exact but will give you a good idea. Check the neighboring properties as well.
Comment by frankie5 — December 30, 2009 @ 6:07 am