So you're looking for a smarter way to buy a property, either to live in, or to invest in. Congratulations. If you're reading this article, it means you've leapt out of the “thinking” phase and into the “doing” phase, and most people never make it that far. There are many deals to be had, if you're willing to do a little research.
You've probably heard that tax foreclosure property is a great investment, and you haven't been led astray; but now, you're going to learn how to buy a house for back taxes, dirt cheap, without dealing with the headache of competition. If you're looking for a cheap property to buy for yourself to live in, stay tuned as well- this technique will work even better if you're not an investor!
Right now, throw out everything you've heard or read about tax sales. If you're smart, you're going to figure out quickly that you can't compete with all the big companies that will be clamoring to bid against you at the sale. Tax sale, be it for deeds or liens, is not a place for the savvy investor in today's market. There's a much better way for you to buy a house for back taxes: from the tax delinquent owner himself.
Most people overlook this strategy, which is why you'll find next to no competition. If you've ever tried buying directly from an owner in mortgage foreclosure, then you understand why this is so widely unappealing to failed mortgage foreclosure investors. Frequently you can't get these owners to return your call for the life of you– and if you do get a deal, then you have to deal with mortgage, the second mortgage, the back bills, the back taxes; but when you buy a house for back taxes, it's a different animal.
Because these houses almost never have a mortgage!
That's right. The mortgage company takes care of any tax problems to avoid losing their interest in the property. So you'll find almost all these houses are free of a mortgage, or they wouldn't be up for tax sale in the first place.
Another thing that might seem counter-intuitive is that the owners will almost always return your calls, and when they do, they're eager to make a deal with you to sell to you, and for dirt cheap, just to get the property out of their name! This is because, as you'll see, many owners of these properties aren't people who are down on their luck, and are losing their homes. They're people who inherited property, or absentee landlords, who have had it with this economy, and actually let the property go to tax sale on purpose, just to get rid of it.
This gold mine of owners can be hard to find, making them great prospects, and you'll be pleasantly surprised to find how many of these owners are ready to hand over their deed for a couple hundred dollars to you, just because they'd rather see it go to a nice, small-time investor like you, than to see it go to the government. If you're looking to buy a property for yourself to live in? Even better. Expect to find owners even more excited to give it to you- for almost no money.