To redeem property sold for back taxes, you don’t even have to have a stake in the property. For example, if your mother’s property was “sold” at tax sale, you could march right on down to the tax sale office and plunk down the cash, thereby redeeming her property for her.
Also, banks and other lienholders often redeem property sold for back taxes. If they don’t, they’ll lose all right to foreclose on the property once the redemption period expires. That’s why most houses that make it all the way through the tax foreclosure process rarely have a mortgage.
If what you’re really wondering is if you can own someone’s property by paying off their taxes, that’s a different story. The answer to that question is also a bit complicated.
If you want to buy a property by paying off the taxes, you can do it one of two ways: bid on it at the tax sale, or buy it directly from the owners. Bidding at tax sale is bad. You will end up paying too much for a property you can’t inspect, will have to pay for the entire bid in cash at the auction, and then probably will lose the deed when someone, as above, comes in to redeem it.
A better way to get this property is to follow the second option: go directly to the owners – but wait until almost the end of the redemption period. This will save you the trouble of messing with properties someone else is likely to redeem, as state above.
These owners will need to sell very quickly in order to avoid government foreclosure. You can offer them a few hundred dollars for their deed. Often that will be enough to get you some property. You can offer other owners (of nicer properties) a share of whatever you’re able to sell it for. You can also buy the deed for $200 and rent it back to the owner – the possibilities are endless.
If you want to keep the property, you’ll have to pay off the taxes. If you don’t have the money to pay off the taxes, you can flip quickly to another investor by pricing the property far below market value – and then let the new owner deal with the taxes.
Either way, you’re making a nice profit for yourself off of an investment of $200, and helping the owner avoid losing all his equity by helping him out of the situation. And with the number of foreclosures happening right now, this is a great time to break into the industry, even if you’ve only got $500 to your name.
The current foreclosure rate won’t last forever – take advantage of it now.
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Want real-estate-sized paydays without owning property? Read this Free Guide to tax sale overages — a secret money-making machine of the Tax Sale “Insiders.”
