What State Is Good For Starters?
Hello Everyone,
I am new to this website and forum. However, for the last 6 months, I am trying to read all I can about the different aspects of REI.
For starters, I decided to try tax sale auctions. Ronald Starr, I know that these days there are a lot of people interested in the tax sales, but I want give it a try too
. Anyways, my question right now is: What state should I try first? I am residing in So. Ca and reading all the postings on this and other forums that made me think that it is not a good idea for someone with very little money and no experience to start here. The competition and high prices are hard to beat. I am thinking about some state where I can drive instead of fly. How about Nevada? Also, will it be helpful if I attend any auction first without bidding? Any suggestions are welcome.
P.S. I have no problem to find the date, place of the auction, list of parcels, do research and read the law.
Thanks,
Tatiana
Nevada....I can't remember if that just became a tax lien state or if it will be on in Jan 2005.
I know Arizona is a pretty good state for tax liens, and not too far from Cali.
Tatiana—(CA)-------------
First decide if you want to go for investment return with liens or if you want to go for deeds to properties, either at an auction or by converting liens to deeds.
I do not recommend going to a sale just to observe. I did that and it is a waste of time. It is simply going to be an auction. Get out and check out the properties your are bidding on or that have liens you are going to bid on. And then go to bid. Talk to an office person ahead of time about form of payment, when it has to be handed over, what kind of presale action you might have to take, etc. For instance, new law in TX requires proof that you do not owe delinquent taxes on properties in a county where you are going to bid on a tax sale.
Pick a state and start calling around to the office that handles the sale: the tax collector or treasurer’s office usually, sometimes the sheriff’s office. Ask them about the past couple of sales: competition, amount properties or liens got bid up, etc. Then only go to counties where the pickings sound easy. Opp, excuse me. That sound easier than the other counties.
Good Investing*********Ron Starr***********
Where is the best place to get information on a Tax lien auction? Do they only take place one a year? i live in NY and I've tried to look up auctions but don't really find much. Thanks!
Suggestions:
1) Find a tax lien state that uses a bid down interest rate for the auction. At least for me these were the easiest to understand.
2) Find Counties outside a large metro area. These are usually less attended than ones with major cities. These can be adjacent to counties with major cities.
3) Make sure you can spend the time doing due dilligence at the county/state. Either it needs to be close enough to drive to, or plan on spending time getting familiar with the area.
4) Talk to the county officials (assessor office, treasures office, county clerk) to see if they are friendly and helpful.
That should be enough to get you started....
[addsig]
hibby76:
). And I was thinking that maybe I should try tax sales San Bernardino ?
Nevada is the combination state where both liens and deeds are for sale. Arizona is a liens state. Thank you for your suggestion.
Ronald Starr:
Thank you for all your wise advises. I just added to my knowledge that RE is not only "location, location" but also "communication"
GlennI:
So, your suggestion is to start from a tax lien state, not a tax deed, just because they are easy to understand? The closest tax lien state for me is Arizona and it is my understanding that all tax sales in Arizona are in February only. Well..next year for sure. Thanks.
Tati--(CA)-----------------
You'll find that the San Bernadino auction has a huge turnout of potential investors. The properties will mostly sell for prices that are too high to make them good investments. A lot of the bidders will be beginners who don't know what they are doing. In November of 2003 I posted a description of the tax sale in El Dorado County which I attended. If you can find it in the archives, I advise you to read it. It will give you perspective on CA tax sales.
June is the month when Iowa tax liens are sold. 2%/month interest rate. Read the state law on the collection of delinquent property taxes before you go, if you go.
I've already got my plane ticket and rental car lined up for my June trip to OK for the tax resales. Buying early provides for low prices: only $233 for a round trip from Oakland to Oklahoma City, or OAK to OKC as those in the know call it.
Good Investing***********Ron Starr*********
Just to further clarify my comments:
1) You need to determine your investment objectives. 1. Is it to buy property, spend $$$ to fix it up then resell? 2. Or is it to invest less upfront, have a high percentage return a profit and have a chance that a few will turn into home runs (big return on investment)?
The first method is to invest in tax deeds (larger initial investment).
The second is focused on tax liens.
You can make and loose money with either -- due dilligence is critical.
2) Once you determine your objective, then determine where you want to invest. Today's environment is that larger (population) areas are extremely competitive with people overbidding/overpaying (in my opinion) for the liens/deeds. Better deals are generally available in less populated areas.
My suggestion to get started with tax liens (nothing against tax deeds, they are good also) is that it usually requires less up-front investment and (at least in rural areas) government officials will provide some help for newbies. There are still legal processes that must be followed (offical notifications early on -- later (if they do not redeem) legal court procedures). You need to read-up on and be aware of the legal processes related to tax sales in the area (state/county) you are going to invest in. It is unwise to invest in an area without understanding the process (would you give money to a bank if you did not know how to get your money back?).
In either situation I recommend finding a kowledgeable attorney in the area you going to invest in -- their fees will cut into your profits, but they can help make sure you have a chance to make a profit.
[addsig]
Kids, Easter, Taxes, interview for new work…Well, I am back.
GlennI:
I definitely would like to stick with the second investment method. It suits me very well in my current situation.
“The 16% Solution” is only my entertainment now and later on state law.
Mr. Starr:
Your story about the tax sale in El Dorado County I not only read back in November on T.P.’s forum, I printed it out and probably still have it in my business bagJ Some sentences are still puzzling to me, but I am hoping one day to be grown up enough to understand them.
” So, these days, if the tax sales in your area allow you, as the property owner, to claim excess proceeds from the tax sales, I recommend buying junk properties for no more than a few hundred dollars, do not pay the taxes, and wait to see what they sell for at the county tax auctions. You will be on the "right side" of the auction, and you might well make substantial money with minimal investment and little effort.”
By the way how are timeshares doing?
I will be looking for June 21 if situation is allowed. Before I buy a ticket I need to hear the Scotland Yard version why the final destination is OKC? And how many days before should I be there.?
Thanks for inspiration.
Tati--(CA)--------------
I go to OKC because there are two main airports in OK: OKC and Tulsa. Once there I take off in a rental car and hit maybe 20-25 different counties to find the good deals.
I'd suggest you about 2-3 weeks before the auction date. I don't understand the reference to June 21.
Good Investing***********Ron Starr**********
[ Edited by JohnLocke on Date 04/21/2004 ]