Important Things to Consider for Successfully Buying Tax Deed Properties
Purchasing a property at a tax deed auction may seem easy and profitable. But while buying them, people can make mistakes which hurt them financially. To avoid them, gain knowledge about them.
By focusing on these points, you can avoid bad properties and choose the profitable ones.
1. Evaluate the Property’s Value
Before buying a property, get known its fair market value from the county assessor’s office or local realtors.
2. Federal Tax Liens
Check out with the county clerk’s office to know if a property is encumbered by any federal tax lien. These liens expire after 7 years, but can be renewed by the IRS, so the property has to be sold for tax payment. Properties encumbered by federal tax liens carry a risk.
3. Flood Plain
Avoid a property in a flood plain as you will not get the permits for building on the property.
4. Physically Inspect the Property
Do not believe a property’s pictures on the county website as it may be actually burned or dilapidated. To avoid purchasing such a property, personally visit and inspect it for any damage. Go inside the house if the occupants permit.
5. Condemnation
Get Mario Prisciandaro’s stories in your inbox
Join Medium for free to get updates from this writer.
Check out with the city to ensure a property is not condemned. Repairing condemned properties costs huge money, so avoid them.
6. Tribal Lands
Do not buy a tax deed to a land owned by a tribe as this will waste your money. Get its ownership confirmed from the Department of Interior or the tribe.
7. Environment
Shun properties with environmental problems in a tax deed sale, as you could be personally liable to correct the problems.
8. Limited Liability Company
Do not purchase a property in your name, but instead take the title through a limited liability company. This will limit your potential liability if someone gets hurt on the property or it has liens.
9. Undivided Interests
An undivided interest means more than one person having a percentage ownership in the property. In case one of the owners fails to pay his ad valorem taxes, then years later his undivided interest in the whole property will be sold at a tax deed sale. So avoid such properties. If you still buy them, hire an attorney to bring a partition action for you.
10. Quiet Title
After purchasing a property with a quite title in a tax sale and filing the resale tax deed, you will not be able to convey marketable title to the property as the former owner still has 10 years to attempt to vacate your tax deed. To avoid this and to obtain a good and marketable title, hire an attorney to bring a quiet title action for you.
If you are new to the field of tax deed investment, seek consultation from Anthony Prisciandaro and Mario Prisciandaro, two knowledgeable real estate experts. Their guidance will help you make the right and profitable investment decisions.
Following the above points would help you avoid bad properties in a tax deed sale and choose profitable ones.
