PA - Upset Sales Vs. Judicial Sales
Hello everyone... I am new to investing in tax lien properties and have a couple of questions that I'm hoping one of you may have some experience with. I recently attended both an Upset sale (where you receive the deed and all the outstanding liens) by winning the bid and a Judicial sale (where all liens are deleted). I was a little discouraged by the amounts that the Judicial sale properties where selling for (ex. houses located in a bad section of town that are run down were going for almost market value). This didn't make sense to me - there were a handful of people at the sale that seemed to be bid crazy and it didn't matter how much they bid, as long as they bought something.
On the other hand, the Upset sale carries all of the liens with the property but you still receive the deed if you are the winning bidder. These properties seemed to go for much more reasonable bids. Again, many of them were run down etc, but I am good at refurbishing, etc.
My main question is, would it make sense for me to bid on an Upset sale property that may carry some liens and work out deals with the lien holders to pay them off when the property sells. I would buy, fix them up, and re-sell.
Do you think it is possible to make deals to pay only a percentage of the outstanding lien and have it wiped clean? I think I may have something here but really do not need to create more headaches for myself than needed. I appreciate your repsonse(s) in advance.
Did you ever get a response to this? It would make sense why folks would bid up judicial sales as they are supposed to be free and clear of any further outflow of their cash.
Upset is different and I have purchased a couple for myself and done a lot of homework on it. You are responsible for any liens that are on the property. You should do homework to check to see what liens are on them and you can do that at the county offices. Doing a title search prior to bidding is also recommended to uncover any further problems that may come up. Also, if the property is in a community, you are resposible for payment of back dues and chances are if the people didn't pay the taxes, they didn't pay the dues. This is an easy phone call to the association if need be. There is a law that only makes you responsible for the last 3 years of dues no matter how high the amount of the dues are, so if you are told they are for the last ten years just ask what the rates are now and triple that and that should be your max there.
If you do not have an attorney, I would recommend it as well.
Hope this helps
Thank you very much for your response... I believe there is a good amount of money to be made when dealing with tax sales but the key is to make sure you have all your bases covered before bidding. Thanks again. SK.