Randy (SELA)
05-22-2006, 02:59 PM
I haven't found out much so far, but here it is. This applies to my city and parish, yours may be different. When you buy a delinquent tax deed from the city the return is 5% penalty plus 1% per month. I'm not sure if this is compounded or not. You do not have to pay the tax every year. You pay it once and must wait 3 years in order to initiate legal proceedings to take title to the property. You also have to inform the owner by certified mail that you have bought the delinquent tax deed. But I'd say 99% of the time the taxes are redeemed and you get your money back plus interest. At a minimum you will make 17% interest per year. If you buy a parish tax deed you must keep the taxes current. The city representative explained that if you are attempting to take title to the property you should try to buy both the city and parish deeds. They only offer these once a year for sale. I went to the city sale last week and there were only 2 other people there. I bought one for the heck of it, another guy bought about 3, and the last guy had his pick from hundreds of deeds. It looked like he was going to be there for a while too. Whatever is left over, the city adjudicates and they will then wait 3 years to initiate possession of title. So, the delinquent owner is going to pay the interest and penalty one way or the other, or lose the property. Either to the city or to the individual who bought the deed.