Who can redeem a tax lien?

[karebear]

(Newbie)
I purchased a lien in Missouri. There is 7 months left on the redemption period. The other day I drove by the property and someone has started building on it. They have no recorded deed to the property. The building department says they don't require proof of ownership to issue a building permit. They said they assume that no one would build on property they don't own. Has anyone ever had anything like this happen? I am concerned that this will give them an interest in the property. Who can redeem a tax lien?

[TommyOH]

I'd imagine that as long as the lien and interest are paid, much like a bank with a mortgage, they wouldn't care who paid it.

I would just watch and wait. Worst case you get paid for the lien, best case, someone builds you something nice on the property and you eventually get title to it.

[Bill H]

Any party that has an interest in the property may redeem it. The tax collector doe not care who pays...they just want the $$$.

I have bought and had other tax lein investors pay me just to keep me from getting a property.

Good Luck,
Bill H

[karebear]

Thank you both for your responses. That is just wrong. The taxes are paid by the bidder. I was told that anyone could pay the taxes but they wouldn't get the property that the property would go back into the owner's name. So the word interest doesn't mean "legal interest in". It just means "Hey I am interested in that property."

After doing some research I have found out that when a third-party comes along and buys property with a tax lien on it and purchases below market value they are termed "lien raiders" and there are statutes against this. Law suits have been upheld in appeals court, against parties practicing lien raiding.

[ThreeRiversREI]

Thank you both for your responses. That is just wrong. The taxes are paid by the bidder. I was told that anyone could pay the taxes but they wouldn't get the property that the property would go back into the owner's name. So the word interest doesn't mean "legal interest in". It just means "Hey I am interested in that property."

After doing some research I have found out that when a third-party comes along and buys property with a tax lien on it and purchases below market value they are termed "lien raiders" and there are statutes against this. Law suits have been upheld in appeals court, against parties practicing lien raiding.

Okay, I'm lost here. Anybody else?

You purchased a tax lien at auction, but the redemption period is not yet up, correct?

Were there liens sold for prior years? I think that may have been what Bill was referring to. The holder of one year's tax lien buying out the holder of a different year's tax lien on a single property.

As for redemption, I would think it would be possible for Harry Homeowner to sell/quitclaim their property during the redemption period to Ivan Investor who would redeem the property, effectively usurping the claim of Larry Lienholder. Depending on the specific laws, the money from Ivan could to into escrow and the closing agent would redeem in the name of Harry before recording the deed in favor of Ivan. Larry still "loses" the property but gets paid his interest on the lien.

In the above scenario, if Ivan was REALLY a speculator, he might get the property under contract with Harry, do work on the property, and try to sell to yet ANOTHER party, all while Larry is waiting out the redemption period.

My thought, if you haven't already, is to inquire at the tax assessor's office if there are any other tax liens against "your" property and even explain your concern that a 3rd party seems to be doing work on it. You might similarly inquire at the office that handles building permits. It's -conceivable- that either you, or the workers, are confused as exactly which parcel is which.

Do some investigation and let us know what's going on!

[karebear]

Okay, I'm lost here. Anybody else?

You purchased a tax lien at auction, but the redemption period is not yet up, correct?

Were there liens sold for prior years? I think that may have been what Bill was referring to. The holder of one year's tax lien buying out the holder of a different year's tax lien on a single property.

As for redemption, I would think it would be possible for Harry Homeowner to sell/quitclaim their property during the redemption period to Ivan Investor who would redeem the property, effectively usurping the claim of Larry Lienholder. Depending on the specific laws, the money from Ivan could to into escrow and the closing agent would redeem in the name of Harry before recording the deed in favor of Ivan. Larry still "loses" the property but gets paid his interest on the lien.

In the above scenario, if Ivan was REALLY a speculator, he might get the property under contract with Harry, do work on the property, and try to sell to yet ANOTHER party, all while Larry is waiting out the redemption period.

My thought, if you haven't already, is to inquire at the tax assessor's office if there are any other tax liens against "your" property and even explain your concern that a 3rd party seems to be doing work on it. You might similarly inquire at the office that handles building permits. It's -conceivable- that either you, or the workers, are confused as exactly which parcel is which.

Do some investigation and let us know what's going on!

Yes I purchased a tax lien and the redeemption period is not yet up.

There are no other liens on the property. This is a third-party that started building on the property claiming to own it. They went to p&z and got a building permit by telling them they are the owner's. P&Z did not check the status of the property or check to see who the owner of record was. They don't have a recorded deed or lien. They claim they purchased the property prior to the tax sale. But no deed was ever recorded. And yes they do have a house, that isn't even built yet, listed for sale.

When I called the collector he told me I needed an attorney that I didn't own the property so I couldn't stop them. I went to p&z and told them I have a tax lien on the property and that the third-party does not have a deed to the property and is not the owner of record. They posted a cease and desist which is supposed to stay in effect until the property is in the third-parties name and they have a recorded deed.

The p&z person does not think the owner's will redeem. He says they have let other property go. He considered bidding at auction but the third-party told him he already bought the property. So when it came time to issue a building permit he didn't even question who owned the property. He says they (third-party) now have a problem with the title company.

Either their purchase of the property was not aboveboard or their intention was to build on it to gain interest in.

The collector told me anyone can redeem the tax lien but the property would go back into the owner's name.

[ThreeRiversREI]

Yes I purchased a tax lien and the redeemption period is not yet up.

There are no other liens on the property. This is a third-party that started building on the property claiming to own it. They went to p&z and got a building permit by telling them they are the owner's. P&Z did not check the status of the property or check to see who the owner of record was. They don't have a recorded deed or lien. They claim they purchased the property prior to the tax sale. But no deed was ever recorded. And yes they do have a house, that isn't even built yet, listed for sale.

When I called the collector he told me I needed an attorney that I didn't own the property so I couldn't stop them. I went to p&z and told them I have a tax lien on the property and that the third-party does not have a deed to the property and is not the owner of record. They posted a cease and desist which is supposed to stay in effect until the property is in the third-parties name and they have a recorded deed.

The p&z person does not think the owner's will redeem. He says they have let other property go. He considered bidding at auction but the third-party told him he already bought the property. So when it came time to issue a building permit he didn't even question who owned the property. He says they (third-party) now have a problem with the title company.

Either their purchase of the property was not aboveboard or their intention was to build on it to gain interest in.

The collector told me anyone can redeem the tax lien but the property would go back into the owner's name.

Sounds like the owner sold it without bringing the taxes current. And the buyer bought it, also without brining taxes current, and without recording the deed. The net result being your purchase at the tax sale.

The buyer then used his purchase as the basis for pulling permits, and is either ignoring the reality of the tax sale or figures he can find some way around it. In fact, it's possible that it could be as simple as his paying the taxes to redeem the property into the seller's name & then recording the deed he presumably got when he purchased prior to the tax sale. (Then again, local law may regard title as having passed to the county or to you at the tax sale, then then back to the seller at redemption, at which point the prior deed would have been invalidated by the sale and the buyer would need to obtain a NEW deed from the seller.)

And if nobody DOES redeem the property, that STILL leaves the possibility of mechanic's liens trying to be attached for the work the buyer was doing, the "damage" done by the half-finished work, etc.

This sounds like it could turn into a real soap opera. I hope it doesn't. But whatever happens, PLEASE keep us posted!

[jardhead]

(Newbie)
I purchased a lien in Missouri. There is 7 months left on the redemption period. The other day I drove by the property and someone has started building on it. They have no recorded deed to the property. The building department says they don't require proof of ownership to issue a building permit. They said they assume that no one would build on property they don't own. Has anyone ever had anything like this happen? I am concerned that this will give them an interest in the property. Who can redeem a tax lien?

This could be a problem on the title if they stay there (encumbances). Call the sheriff and have them arrested for trespassing. :-) As for who can redeem a tax lien, the original owner can redeem it or he could have someone else pay for it. Now if you mean who can "foreclose" on a tax lien, only the tax lien holder(s) can after the redemption period of course.

I suggest you purchase some guides on tax liens before you invest in it further, each state and sometimes each county is somewhat different. My favorite book on tax liens is by Don Sausa. The title is "Complete Guide to Real Estate Tax Liens and Foreclosure Deeds: Learn in 7 Days".

Good luck on your endeavors.

[Bill H]

Let's try and sort this out:

You bought lien..seven months to go...you have NO ownership rights of any kind until redemption period expires and you take necessary steps to perfect title.

In the meantime...everywhere that I am aware of...ANYONE with an interest in the property can step up and pay the taxes and redeem your certificate or lien...all you get is your interest and penalties under MO statutes.

Property will then revert to the owner who was in delinquent. Person who paid the taxes and has an interest has to step in and perfect his title interests.

You feel that because your purchased the lien you should have first rights on the property. That is not necessarily so...all you did was pay the taxes for the owner in delinquency....you are entitled to nothing in ownership rights until the redemption period expires and you take the steps to perfect your title.

What most newbies fail to understand is that they are NOT BUYING the property...ONLY making a loan...or gamble that the taxes will remain unpaid and the property will mature to them.

If it does...good deal...if it does not...do not whine and complain..move on. I have found with years of doing this that about 98.999 to 99.999 percent willl be redeemed by SOMEONE.

Buying tax liens is NOT, contrary to what you see the gurus say on TV, a good way to get property.

Buying tax deed is (in some cases) a fair way to get property.

Good Luck,
Bill H

[k6saunde]

Let's try and sort this out:

You bought lien..seven months to go...you have NO ownership rights of any kind until redemption period expires and you take necessary steps to perfect title.

In the meantime...everywhere that I am aware of...ANYONE with an interest in the property can step up and pay the taxes and redeem your certificate or lien...all you get is your interest and penalties under MO statutes.

Property will then revert to the owner who was in delinquent. Person who paid the taxes and has an interest has to step in and perfect his title interests.

You feel that because your purchased the lien you should have first rights on the property. That is not necessarily so...all you did was pay the taxes for the owner in delinquency....you are entitled to nothing in ownership rights until the redemption period expires and you take the steps to perfect your title.

What most newbies fail to understand is that they are NOT BUYING the property...ONLY making a loan...or gamble that the taxes will remain unpaid and the property will mature to them.

If it does...good deal...if it does not...do not whine and complain..move on. I have found with years of doing this that about 98.999 to 99.999 percent willl be redeemed by SOMEONE.

Buying tax liens is NOT, contrary to what you see the gurus say on TV, a good way to get property.

Buying tax deed is (in some cases) a fair way to get property.

Good Luck,
Bill H

I have several questions on this subject.

Is it best to buy all the years of back taxes or just one of them? I have a property that I am looking at that the county taxes are only $140 for each year. It looks like the home owner is at least 3 years back on taxes. Most likely she is more than that.

Which leads me to my next question. Do I need to pay all back taxes for each year or just the county taxes? Do I need to pay things like the back school taxes etc?

What is the standard redemption period if I was to buy the taxes on this property?

What kind of interest and fees can I charge if they decide to buy the tax lein back?

DO I deal directly with the county tax man or do I need to do anything special to buy the tax lien?

Once you buy the tax leins do you contact the home owner to try to get paid or do you just sit back and let it ride hoping they dont notice?

Say you have waited the entire redemption period with no payment from the home owner. What is the next step? How do you acquire title to the property?

How long does it take to acquire a property once the redemption period is up?

what recourse if any does the home owner have at that time to stop or stay you getting title on the property?

What are the major pitfalls of doing this type of deal?

I think thats it for now, but I will probably have more questions for you after you answer.

thanks,

Keith:thumbsup:

[Debbie]

I have several questions on this subject.

Is it best to buy all the years of back taxes or just one of them? I have a property that I am looking at that the county taxes are only $140 for each year. It looks like the home owner is at least 3 years back on taxes. Most likely she is more than that.

I'm assuming you're referring to Pennsylvania. So, I'll answer accordingly....

Your state is a hybrid. Meaning, your state is a "Deed state" but with a twist.

Any state that is a "Deed" state allows the investor to actually acquires title to the property. However, with the twist (hybrid), the owner has a specified redemption period to redeem the property and re-acquire the title to the property.

In other words, your purchase the Deed. You own the property outright except the owner has redemption period to re-acquire the Deed (title). If the owner has occupied 90 days prior to you buying the Deed, the owner has 1 year to redeem the property by pay back taxes, investor's (you) purchase price plus an additional 10% (to you).

However, should the owner not occupy prior to your Deed purchase, the owner has no redemption period. Therefore, you own the property outright.

To answer to your question: Is it best to buy all the years of back taxes or just one of them? The answer would be, in your state, you only purchase one time for a specific property.

Which leads me to my next question. Do I need to pay all back taxes for each year or just the county taxes? Do I need to pay things like the back school taxes etc?

Once you purchase the Hybrid Deed (title), all back taxes are current. It's the occupied owner that has 1 year redemption that must pay (see above statement I made)

What is the standard redemption period if I was to buy the taxes on this property?

1 year for occupied owner at time of investor's (you) Deed purchase.

What kind of interest and fees can I charge if they decide to buy the tax lein back?

10% per annum

DO I deal directly with the county tax man or do I need to do anything special to buy the tax lien?

Contact your county building.
I do know that they have monthly sales...
1st Monday at the Allegheny (Pittsburgh)
3rd Wednesday at the Philadelphia (Philadelphia)
Other counties varies

Once you buy the tax leins do you contact the home owner to try to get paid or do you just sit back and let it ride hoping they dont notice?

Never, ever contact the homeowner!!!!!

Say you have waited the entire redemption period with no payment from the home owner. What is the next step? How do you acquire title to the property?

Contact your county building to make sure that the homeowner has missed his/her redemption period. If missed the redemption period, contact your attorney to get all necessary paperwork done.

Your county building should have the answers to your questions. Each counties are different.

How long does it take to acquire a property once the redemption period is up?

If you have your attorney filing necessary papers beginning the 1st day AFTER redemption period expired, the property is yours almost immediately.

what recourse if any does the home owner have at that time to stop or stay you getting title on the property?

That can happen.
In Pennsylvania, many homeowners redeemed just prior to the sale of Deeds and homeowners received "Stayed" approval. Meaning that the homeowner was given additional time to pay the lien and his/her property will not be offered at the sale.

What are the major pitfalls of doing this type of deal?

In the state of Pennsylvania, many properties listed on the Deed Sale list are often inaccurate and not updated. You will not know for sure what properties will actually be up for Deed sale til the day of purchase. Pennsylvania is not known to be reliable nor accurate. Too many pitfalls.

I think thats it for now, but I will probably have more questions for you after you answer.

thanks,

Keith:thumbsup:

My above answers are based on the information I received a couple of months ago. There may or may not be any changes. Always do your due diligence and make sure you speak with the county building (or multiple county buildings) and write lots of notes! Each county operates differently!

[k6saunde]

The property in question has been vacant for atleast a year. The owner lives out of state. Talked to her directly yesterday, she is totally unrealistic in what she wants for the property. She wants 150k for a fixer upper in a neighborhood where totally rehabbed homes are going for $115k to $120k.

As far as I know the property is not on any list to be sold outright by the county or state.

So how do I go about buying the deed to the property?

Do I have to wait for this property to be put up for sale by the county?

[Debbie]

Contact the county building where the property is located.

Plus, if I were in your shoes, I'd go check the property taxes and see what's going on.

I strongly believe that she's not telling you the truth, if not the whole truth.

[k6saunde]

Contact the county building where the property is located.

Plus, if I were in your shoes, I'd go check the property taxes and see what's going on.

I strongly believe that she's not telling you the truth, if not the whole truth.

She is still listed on the deed as the owner.

On the county website the taxes on the property have only been paid once in the past 4 years. Last year, and paid 10 months late. She moved out of state back in 2001 and got married.

Early last spring, she and her husband came back to do some repairs on the place. But it is far from done. according to the neighbors nobody has even visited the home in about a year now.

I strongly believe that she's not telling you the truth, if not the whole truth.

Ya think?? LOL

Who do I want to contact in the county bldg? the recorder of deeds, the tax man, or some other office?

[Debbie]

Who do I want to contact in the county bldg? the recorder of deeds, the tax man, or some other office?

That one, I don't know. I only have limited knowledge.

[brianb_cobbres]

Okay, I just read through this thread and wow, just wow. I have never bought a tax lien and have only read a few articles on the subject but....

Let me drill right down to the root of the question. I have not had anyone accuse me of being mean in a few days so here goes.

When you buy a tax lien you have no interest in the property period. What goes on during the redemption period is, quite frankly, none of your business. It sounds like you bought the tax lien expecting to get the property? Your lien does not entitle you to anything and gives you no authority over what happens on that property. Just forget you own the lien until the redemption period expires that figure out what is what. Honestly, expect the lien to be redeemed. It sounds like something is going on that will force the lien to be paid.

As for a house with past due taxes. You cannot just walk into the tax collectors office and purchase liens. This is a legal proceeding and rules have been established and must be followed. Go to the tax office and ask them how to participate in their tax auctions and maybe some day that house will come up for auction. Then again at $140 a year all one has to do is sell some plasma to make enough money to keep things current. As for that particular house. Obviously the owner is not motivated to sell and I seems you are trying to find a way to leverage the tax issue to force the issue? Walk away, you are wasting your time.

[Southernbelle]

(Newbie)
I purchased a lien in Missouri. There is 7 months left on the redemption period. The other day I drove by the property and someone has started building on it. They have no recorded deed to the property. The building department says they don't require proof of ownership to issue a building permit. They said they assume that no one would build on property they don't own. Has anyone ever had anything like this happen? I am concerned that this will give them an interest in the property. Who can redeem a tax lien?

I don't know about Missouri, but here in Texas there is a 6 mth redemption on vacant land, and 2 years for a home. Now, whoever that is building on "your purchased tax lien" I would find out. They maybe the owner that defaulted. They have the right to redeem this property, however they have to pay all the fees you incurred, plus interest.

As for the building permit people not requiring proof of ownership is crazy, simply because when whoever went to get permits to build the tax lien should have flagged them, and the now owner of the property...you... should have popped up. So, to me this don't make sense.:confused: :SM032:

In Texas, the fees, plus 25% on the first year, 50% on the second year are paid if redeemed within the time frames. Make sense?

Hope this helps....:SM022:

[Debbie]

Southernbelle,

Welcome to the Magic Bullets Fambly!

[brianb_cobbres]

As for the building permit people not requiring proof of ownership is crazy, simply because when whoever went to get permits to build the tax lien should have flagged them, and the now owner of the property...you... should have popped up. So, to me this don't make sense

Contractors pull permits on other peoples houses all the time. You do not have to be the owner to pull one, all you need is a signature and that is easy enough to fake. Second, why would a tax lien affect a permit? Remember that the city/county sold the lien so it is current as far as they are concerned.

As for contacting anyone. The lien does not give any legal interest in the property. None. So what you are doing is harrassing the interested parties even through you have no clue what they are doing or trying to do.

[Southernbelle]

If you have purchased a tax lien, you are the owner...you can't do anything to the property...until after the redemption period is over. So...if somebody is doing something on a piece of real estate I just bought at a tax sale...you bet I am going to see who you are..that is not harrassing..that is finding out who is on my property.

Now if they are the orginial owners (whom I am waithing to see if they are going to redeem) that's great, cause then I will be getting my money back plus %. So, to me ...they either have to the previous owners(who defaulted) or me....I'm not going to do anything to the property until the redemption period is up....so..

I'm sitting here..thinking...why in the world would someone just start building anything on a property they don't own?:confused:

[brianb_cobbres]

"If you have purchased a tax lien, you are the owner"

You are buying a lien, you are not buying the property. You do not have any legal interest in the property until the redemption period expires and you successfully foreclose on the property.

You are not the owner.

[SlumLordMike]

"If you have purchased a tax lien, you are the owner"

You are buying a lien, you are not buying the property. You do not have any legal interest in the property until the redemption period expires and you successfully foreclose on the property.

You are not the owner.

I concur with Brian. In fact, it may be you (lien holder) that might start getting harassed if you step foot on a property you don't own. Your strongest position is that your lien will cloud the title on the property. In my opinion, stay out of the way and let them build Trump Towers on the dirt. Sooner or later you will get a phone call or letter wanting to pay you off. As mentioned before, find something to entertain yourself until the redemption period expires. I would suggest shopping for lawyers to get you through the foreclosure in the event you are not made whole for the lien you bought.

The last time I bought a delinquent tax property it went quite smoothe. Bought it from the county auction, fixed it up, did a quit claim deed (paid the RIGHT person $500 to sign it), and now I own it. One thing to note. when you buy property like this, not all title companies will sell you a policy right away, so don't plan on selling it or borrowing against it any time soon. I had to let it season/soak for a few years.

[Southernbelle]

Texas is a Tax Deed State, so your states procedures are different. Sorry for any confusion.

[Bill H]

I;ll try to assist you question by question:

(Q) Is it best to buy all the years of back taxes or just one of them? I have a property that I am looking at that the county taxes are only $140 for each year. It looks like the home owner is at least 3 years back on taxes. Most likely she is more than that.

(A) If someone else has a prior year claim (by way of buying the tax lien) you would have to contact them and purchase it from them. If by chance it matures to you and no one else has perfected their title then you can perfect your and pay all the taxes and eliminate all the prior purchasers.

(Q) Which leads me to my next question. Do I need to pay all back taxes for each year or just the county taxes? Do I need to pay things like the back school taxes etc?
(A) Depends on what taxing jurisdiction is forcing the sale. See above also.

(Q)What is the standard redemption period if I was to buy the taxes on this property?
(A) How high is UP? Every state is different? Some sell deeds with no redemption period. Some sell deeds with a redemption period. Lien or certificate state have greatly varying redemption periods. Check your local tax collector.

(Q)What kind of interest and fees can I charge if they decide to buy the tax lein back?
(A) Interest, penalties, fees, etc are all set by state statutes. YOU do not set them.

(Q)DO I deal directly with the county tax man or do I need to do anything special to buy the tax lien?
(A) In most states that I know of it is an all CASH transaction and when the tax collector auctioneer says "SOLD" you got it warts and all.

(Q)Once you buy the tax leins do you contact the home owner to try to get paid or do you just sit back and let it ride hoping they dont notice?
(A) You have NO ownershipr rights and NO rights to contact the owner for anything. All you have done is pay their taxes.

(Q)Say you have waited the entire redemption period with no payment from the home owner. What is the next step? How do you acquire title to the property?
(A) If they fail to redeem at the time the lien matures to you the taxing juridsction will issue you a deed to the property. Then you must perfect your title.

(Q)How long does it take to acquire a property once the redemption period is up?
(A) Depends on the efficiency of the taxing jurisdiction, normally a short time.

(Q)what recourse if any does the home owner have at that time to stop or stay you getting title on the property?
(A) Lots of them. The most common is "Failure to Properly Notify" in which they claim that they were not notified. You must in most cases file a "Quiet Title Action" to clear the title and at that time lots of things can and may come up to cause you to lose title. The courts are very reluctant to take away property. NOrmally 70/30 or better in favor of owner.

(Q)What are the major pitfalls of doing this type of deal?
(A) You name them they are out there. Swamp land, meth-houses, burnt our meth-labs, half streets, unusable stips of land, landlocked property. Unlike the tv gurus say...most property up for tax sale is there for a reason...it is most likely not worth the effort. If it is good property my experience has shown that 98.999 to 99.999 percent of the time it will be redeemed by someone. As I said before this is not the business that the late night tv gurus make it out to be. You can get burned badly in this business.

(Q)I think thats it for now, but I will probably have more questions for you after you answer.
(A) After all this I suggest that you go to your local law library in the nearest courthouse and ask the librarian to assist you. Ask for all information on delinequent tax deeds/liens/certificate. Make copies, go home and STUDY. Learn what you are getting into BEFORE you leap in with both feet. The water can be very DEEEEP!

Good Luck,

[Bill H]

I;ll try to assist you question by question:

(Q) Is it best to buy all the years of back taxes or just one of them? I have a property that I am looking at that the county taxes are only $140 for each year. It looks like the home owner is at least 3 years back on taxes. Most likely she is more than that.

(A) If someone else has a prior year claim (by way of buying the tax lien) you would have to contact them and purchase it from them. If by chance it matures to you and no one else has perfected their title then you can perfect your and pay all the taxes and eliminate all the prior purchasers.

(Q) Which leads me to my next question. Do I need to pay all back taxes for each year or just the county taxes? Do I need to pay things like the back school taxes etc?
(A) Depends on what taxing jurisdiction is forcing the sale. See above also.

(Q)What is the standard redemption period if I was to buy the taxes on this property?
(A) How high is UP? Every state is different? Some sell deeds with no redemption period. Some sell deeds with a redemption period. Lien or certificate state have greatly varying redemption periods. Check your local tax collector.

(Q)What kind of interest and fees can I charge if they decide to buy the tax lein back?
(A) Interest, penalties, fees, etc are all set by state statutes. YOU do not set them.

(Q)DO I deal directly with the county tax man or do I need to do anything special to buy the tax lien?
(A) In most states that I know of it is an all CASH transaction and when the tax collector auctioneer says "SOLD" you got it warts and all.

(Q)Once you buy the tax leins do you contact the home owner to try to get paid or do you just sit back and let it ride hoping they dont notice?
(A) You have NO ownershipr rights and NO rights to contact the owner for anything. All you have done is pay their taxes.

(Q)Say you have waited the entire redemption period with no payment from the home owner. What is the next step? How do you acquire title to the property?
(A) If they fail to redeem at the time the lien matures to you the taxing juridsction will issue you a deed to the property. Then you must perfect your title.

(Q)How long does it take to acquire a property once the redemption period is up?
(A) Depends on the efficiency of the taxing jurisdiction, normally a short time.

(Q)what recourse if any does the home owner have at that time to stop or stay you getting title on the property?
(A) Lots of them. The most common is "Failure to Properly Notify" in which they claim that they were not notified. You must in most cases file a "Quiet Title Action" to clear the title and at that time lots of things can and may come up to cause you to lose title. The courts are very reluctant to take away property. NOrmally 70/30 or better in favor of owner.

(Q)What are the major pitfalls of doing this type of deal?
(A) You name them they are out there. Swamp land, meth-houses, burnt our meth-labs, half streets, unusable stips of land, landlocked property. Unlike the tv gurus say...most property up for tax sale is there for a reason...it is most likely not worth the effort. If it is good property my experience has shown that 98.999 to 99.999 percent of the time it will be redeemed by someone. As I said before this is not the business that the late night tv gurus make it out to be. You can get burned badly in this business.

(Q)I think thats it for now, but I will probably have more questions for you after you answer.
(A) After all this I suggest that you go to your local law library in the nearest courthouse and ask the librarian to assist you. Ask for all information on delinequent tax deeds/liens/certificate. Make copies, go home and STUDY. Learn what you are getting into BEFORE you leap in with both feet. The water can be very DEEEEP!

Good Luck,

[Bill H]

(Newbie)
I purchased a lien in Missouri. There is 7 months left on the redemption period. The other day I drove by the property and someone has started building on it. They have no recorded deed to the property. The building department says they don't require proof of ownership to issue a building permit. They said they assume that no one would build on property they don't own. Has anyone ever had anything like this happen? I am concerned that this will give them an interest in the property. Who can redeem a tax lien?

I am sure I answered this before but will try again.

The tax collector does not care who pays the taxes as long as they are paid. In all cases that I am familiar with anyone with an interest in the property can come in and pay the taxes.

I purchase lots of them each year and often have another investor come in and pay the taxes at the last minute to move into a senior position so that the property will mature to them next year.

Lots of ways to skin the cat in this business. It can and is often very frustrating when you think you got a good one and someone comes along and redeems it.

My expereince has been that 98 to 99 oercent will be redeemed.

Now if you are buying tax resales, those that were not sold and have matured to the taxing authorigyt, then your chances at getting the property improve significantly.

Good Luck,
Bill H

[Bill H]

Ibrokeruniverse.com/grapevineyou can't do anything to the property...until after the redemption period is over. So...if somebody is doing something on a piece of real estate I just bought at a tax sale...you bet I am going to see who you are..that is not harrassing..that is finding out who is on my property.

Now if they are the orginial owners (whom I am waithing to see if they are going to redeem) that's great, cause then I will be getting my money back plus %. So, to me ...they either have to the previous owners(who defaulted) or me....I'm not going to do anything to the property until the redemption period is up....so..

I'm sitting here..thinking...why in the world would someone just start building anything on a property they don't own?:confused:

Southernbelle...You are incorrect...TEXAS is a Tax Deed State...NOT a tax lien state....Very few states are like Texas and are tax deed states.

So your generalized statement..."If you bought a tax lien you are the owner is NOT correct in most cases."

Texas law says that the redemption period is for 6 months non-homesteaded property and 24 months for homesteaded...vacant land could conceiveable be homesteaded if they intend to have filed to build.

In Texas you can do ANYTHING you wish with the property subject to the redemption period. You can rent it, lease it, sell it, (if someone is dumb enought to buy it subject to the redemption).

Yes, in Texas you can go to the property and see what is happening to the property you just purchased at the TAX DEED SALE.

Even if they are the original owners you can charge then rent for the time they are there, etc.

And, Texas like all other states says that anyone who has an interest in the property can stepup and pay the taxes and redeem. It does not have to be the defaulting owner.

Texas statues are pretty specific and easy to read. I would suggest that you go to your local courthouse and ask the law librarian to assist you and get yourself a copy and read them.

Good Luck,
B illH

"Do it right the first time."

[Southernbelle]

Southernbelle...You are incorrect...TEXAS is a Tax Deed State...NOT a tax lien state....Very few states are like Texas and are tax deed states.

So your generalized statement..."If you bought a tax lien you are the owner is NOT correct in most cases."

Texas law says that the redemption period is for 6 months non-homesteaded property and 24 months for homesteaded...vacant land could conceiveable be homesteaded if they intend to have filed to build.

In Texas you can do ANYTHING you wish with the property subject to the redemption period. You can rent it, lease it, sell it, (if someone is dumb enought to buy it subject to the redemption).

Yes, in Texas you can go to the property and see what is happening to the property you just purchased at the TAX DEED SALE.

Even if they are the original owners you can charge then rent for the time they are there, etc.

And, Texas like all other states says that anyone who has an interest in the property can stepup and pay the taxes and redeem. It does not have to be the defaulting owner.

Texas statues are pretty specific and easy to read. I would suggest that you go to your local courthouse and ask the law librarian to assist you and get yourself a copy and read them.

Good Luck,
B illH

"Do it right the first time."

I must be missing something, BillH,.....I know Texas is a Tax DEED State(I stated this in an above post). I also know the redemption periods. But, hey I will research my state again to make sure.....I have been known to be incorrect sometimes....:SM029:

[karebear]

I am sure I answered this before but will try again.

The tax collector does not care who pays the taxes as long as they are paid. In all cases that I am familiar with anyone with an interest in the property can come in and pay the taxes.

I purchase lots of them each year and often have another investor come in and pay the taxes at the last minute to move into a senior position so that the property will mature to them next year.

Lots of ways to skin the cat in this business. It can and is often very frustrating when you think you got a good one and someone comes along and redeems it.

My expereince has been that 98 to 99 oercent will be redeemed.

Now if you are buying tax resales, those that were not sold and have matured to the taxing authorigyt, then your chances at getting the property improve significantly.

Good Luck,
Bill H

Bill,
I called and wrote the State Tax Commission for clarification. The words "interest in" refers to a legal interest in the property, not just anybody interested in it. In order to redeem they must hold title or have a lien on the property such as a mortgage.

[Bill H]

I must be missing something, BillH,.....I know Texas is a Tax DEED State(I stated this in an above post). I also know the redemption periods. But, hey I will research my state again to make sure.....I have been known to be incorrect sometimes....:SM029:

Hi Souithernbelle:

Not trying to confuse or give you a hard time. Just trying to insure that you do not get in over your head and all of a sudden wonder "What Happened."

Good Luck,
Bill H

[Bill H]

Bill,
I called and wrote the State Tax Commission for clarification. The words "interest in" refers to a legal interest in the property, not just anybody interested in it. In order to redeem they must hold title or have a lien on the property such as a mortgage.

Hi Karebear:

Now we know how the "Show Me State" handles and looks at "Having an interest" in property.


Good Luck,
Bill H

[ThreeRiversREI]

Bill,
I called and wrote the State Tax Commission for clarification. The words "interest in" refers to a legal interest in the property, not just anybody interested in it. In order to redeem they must hold title or have a lien on the property such as a mortgage.

Let me see if I have this clear.....

I contact the defaulted owner towards the end of the redemption period, buy it from them, record the deed, and then redeem the back taxes?

Person who bought the tax deed/lien gets their investment back plus interest.
I get the property.

[Bill H]

Let me see if I have this clear.....

I contact the defaulted owner towards the end of the redemption period, buy it from them, record the deed, and then redeem the back taxes?

Person who bought the tax deed/lien gets their investment back plus interest.
I get the property.


Well Debbie in actuality it could and does very well work that way.

I have had people do exactly that just before the end of the redemption period. I ain"t saying if I do it or not!

Simply contact the owners in default. They are a matter of public record. In most states must appear with name, address, etc in public records.

They know they are losing the property to a tax sale.

Do you due diligence, Offer them a reasonable amount and in some cases BINGO! you get the property and can go down and pay the taxes and it is YOURS.


Good luck,
Bill H