I want to invest in tax sales to purchase forclosed properties and flip for proift. I research these practice but havent found the best material. I understand that some investors find these sales, purchase these properties mortage free and flip for great profit. I would love to hear someone expierence and possible guide me. Any assistance or positive feedback will be greatly appreciated. Thanks
I can only speak from what it is like in my county and state.
When you speak of tax sales, I assume that you are talking about purchasing a home through the county where the person has not paid their taxes. If that is what you are talking about, you are NOT buying a foreclosed property. Foreclosure, by definition, means that the bank has taken possession of the house. You also cannot actually buy these properties through the county.
What you do purchase is a tax lein. Here they auction off the leins. When you purchase this lein you have essentially paid the taxes for that person, and now they owe you that money (plus interest). Interest, by the way, varies quite a bit from county to county, but here it is 15%. If they do not pay this amount within a certain amount of time (here it is 3 years, with 15% interest being tacked on each year), then you can apply to turn you lein into a deed. Once that process is over, you now own the house, and must evict the previous owners.
If you can get the tax lein for what it is worth, it is a very good investment. However, in many auctions the tax lein is sold beyond its worth, and then the people pay it off. For example, if they owe $500 in taxes, and you buy the tax lein for $700, they only owe interest on what they owed, not on what you paid. So they can buy the tax lein off of you for $575, and you're out $125.
You should be able to get some information about the process in your county through your county appraisal office.