Ever heard those fantastic stories where the home buyer pays $10,000 and sells the house later for $200,000? You might be hearing about tax deed sales. They are not mere fantasies — but, as you might imagine, you are unlikely to be the only one attending an auction. By the time everyone’s done bidding, profit margins can be disappointing. Moreover, homes with tax liens can be in pretty bad shape. A lot of work and money goes into code-compliant home renovations.
So, not every tax deed sale is a fabulous deal. Buyers need to welcome risk, prepare for a lot of work, and come to the auctions well equipped for the territory.
But is your county a tax deed sale state? Or is it actually auctioning tax lien certificates? Or is it a smattering of both? Tax deed sales can ultimately convey properties to the high bidders. In contrast, there’s no home conveyance when you buy tax lien certificates.
Let’s look more closely at these types of investments, and their risk-reward profiles.
Continue reading “Tax Deed Sales: Buying Homes by Paying Other People’s Taxes”