When you first got into tax sale investing, you had dreams of building wealth that would allow you and yours to live in style, never having to worry about money again. If that dream was dashed when you actually showed up at auction and weren’t able to get any good property, you need to try a new tax sale investing technique: “grabbing deeds.”
Very few investors go this route. Only the true real estate “elite” have figured out the loopholes that provide for real wealth in investing. Ask the most successful real estate guy you know and you’ll find out that, though he probably doesn’t talk about it much, grabbing deeds is part of his overall tax sale investing strategy. If you employ this method faithfully, it’s only a matter of time before you have the wealth you want.
Grabbing deeds is basically the process of obtaining tax sale properties directly from the owners, but only after their property has been “sold” at tax sale. Again, only elite investors have taken the time to investigate the laws regarding tax sale, and have discovered that this process is perfectly legal. What this means for you? Almost no competition for these properties.
What it also means for you is that you’ll be dealing only with extremely motivated sellers. Tax delinquent owners get one final year or less after tax sale, in most cases, one last chance to come up with the taxes. Usually, they can’t. This is when grabbing deeds for as little as $100 becomes not only possible, but probable. It also allows you to inspect a property before buying it – you won’t get that at the tax sale.
Here’s what you do: wait until after the tax sale has aged for a few months. Check to see which owners still haven’t paid off their property taxes. Find their contact information, and give them a call. You’ll find what you’d expect: owners that can’t pay their taxes and need to sell the property as quickly as possible – even if that means they sell it to you for only a few thousand dollars.
As if that weren’t good enough, you’ll often find some owners you weren’t expecting at all. Many tax properties end up at auction because their owners have decided to let them go there. People who have inherited properties they don’t want, or own an annoying property (like a bad rental property) that they no longer want often just let them go to auction. These owners are a property gold mine.
Say something like this to them. “Since you were already going to let the property go, would you mind signing the deed over to me so I can see if I can do anything with it?” You can even offer them $100 for their time. Often, they’re happy to see the deed go to anyone other than the government – and glad to get the deed signed off sooner.
Since mortgage companies pay taxes on mortgaged property, they almost never make it through tax sale – so the property you’ve just bought for $100 is free and clear. If you have the money to pay off the taxes and want to keep the property, do it. And if not? Price the property at a price that ensures you’ll make a nice chunk of profit, while still selling for so far below the property’s worth that you’ll have a buyer within a few days.
This is how grabbing deeds is done, and today’s foreclosure rate makes it a very lucrative endeavour indeed.
The current foreclosure rate won’t last forever – take advantage of it now.
By Robert Holiday