Buying Homes By Paying Property Back Taxes - An Easy Guide:

If you wish to find a simple and fast way to get houses at cheap prices to invest or live in, look no further. Read this complete article that reveals the best way to approach investing. At this time, buying houses for back taxes is a profitable deal that has many benefits for homebuyers, and also it has some risks and pitfalls waiting in the wings. Here you will learn about the easy steps to buying a house for back taxes and you will get a list of all the important factors when sizing up your investment property.

What Are Back Taxes:

Back Taxes is a term when you fall behind on paying your property taxes (before the due date). If your back taxes remain unpaid, you will be charged as a delinquent and legal proceedings will be filed against you. Additional fees, interests, fines & penalites will be added to the back taxes, so a delay in paying it can dramatically increase your debt further.

How To Buy Houses For Back Taxes - 6 Easy Steps with Bonus Tip:

Buying houses by paying property back taxes is a great investment for the beginning investor. Read the steps below to get a basic overview on how to buy houses for back taxes.

1. To start, call the county office to get the list of properties that will be auctioned off (due to unpaid back taxes).
2. After getting the list, the next step would be to pinpoint the properties that may be of interest to you, at the upcoming sales auction.
3. Do your Due Diligence and check the property for additional liens, lawsuits, etc..
4. After that, you may personally inspect the property yourself or have a contractor inspect it for you (to check the roof, water lines, cracked foundation, etc.).
5. If the property meets your investment criteria, get its auction date, so you can prepare beforehand.
6. On the date of the auction, arrive early, go over your notes and prepare to bid!

Bonus Tip:

When you go bid on a property, know your maximum bid or budget so as not to financially over-extend yourself.

Important Factors You Must Know:

#1. Once you're the winning bidder, be sure to have all the funds available to pay:

You will have to pay the total amount of the property (along with incurred fees and interest). Because of your due diligence, by the time of the auction you should be well acquainted with all of the potential costs involved in the sale.

#2. Potential Legal Issue:

While you have your due diligence to safeguard you from making mistakes, some things can be overlooked. So take special care to see if your investment property has a 'clean title'; that is, upon purchasing said property, see to it that no previous owner can come out of nowhere and lay claim to your (newly bought) property.

#3. You can't inspect a house before you buy it (in some states):

In some states, you can’t see and inspect these houses before purchasing. Understandably, this can make the purchasing decision very difficult. While some employ creative ways to inspect the property, a seasoned investor who's 'been around the block' a few times, can take a gamble & knowingly purchase this type of property, but arm himself with an exit strategy.That said, if you feel that you don't have enough information to make a calculated decision, then do not buy the property.

FAQs:

Q. How do I find Tax Delinquent properties in my area?

A. It's quite straightforward. Contact your county treasurer. Ask him/her for a list of tax delinquent properties that will be auctioned off.

Q. How Profitable is Tax Lien Investing?

A. Tax lien investing (when done right) can create a very extensive real estate porfolio, for pennies on the dollar - and it can be done very quickly (compared to other investment endeavors). It has a low cost entry, with high returns (you can get approximately 12% return on investment), with little to no competition.