In most cases, owners have abandoned the properties that are coming up on the tax deed auction list. Occasionally there will be someone that does not want to lose their home and will not leave voluntarily. This can be a problem for investors looking to flip the property, especially out of state investors.
Before purchasing a property, it is essential to find out if the property is occupied or not. If it is occupied, there is potential for a problem. If it is vacant, there is less of a chance there will be an issue.
This is different for tax liens. With tax liens, one of your requirements should be that it is occupied, but cause you want to be paid.
If you do purchase a property that is occupied, whether by the owner or a squatter, do not try to remove them yourself. Contact the local sheriff’s department to find out the procedures for evicting them. Usually notice must be served and then the Police can physically remove them.
Is some cases the occupant may be an elderly person with no family and no place to go. If this is the case, try to work something out with them. Allowing them to rent the property may be an option, but if they couldn’t pay there taxes, they probably won’t be able to pay the rent.
As an investor you will be made the villain if photographs of police dragging an elderly person from there former home make their way to the media.
Another dark side of tax deed investing can also happen at tax lien auctions. Some investors can bully other bidders. They find pleasure in bidding up items even if they have no intention of buying them.
They may also attempt to intimidate other bidders and keep them from bidding on the properties they want. If you are buying the property to live in or develop, let the investors that are buying several properties know that you want the property to own and not as an investment. They will often refrain from bidding. I know I do, unless there is a small number of properties and I need it to make the trip worth it. They rarely will show the same consideration for other investors however.
At one auction another investor approached me and threaten to bid up all the properties I wanted unless I let him get two that he wanted. I really didn’t appreciate the threat since I had already won 25+ properties before he came to me so I was happy with the results up to that point. Not bidding on two when they were all the same to me wouldn’t have made a difference. It just happened that the two properties he wanted, weren’t on my list of properties I wanted. I was tempted to bid on his anyway because of the threat. If he then bid on mine, I was going to let him have them since I knew he didn’t want them.
I decided not to be spiteful and just bid on the properties I wanted and everyone was happy.
For the most part, tax deed and tax lien investing is fun and profitable, but there may be instances that can take the pleasure and profit from the experience. Do your research and most of the problems will be avoided.
If you are ready to start investing in tax deeds or tax liens, visit http://BankREOTraining.com for more information.
