Tax Foreclosed Properties as an Investment
James Ficarro

Tax Properties

Every property that is owned is assessed property taxes that must be paid every year. Property taxes are paid to local and state governments based on the appraisal value of the real estate. All states, the District of Columbia, Puerto Rico and the American Virgin Islands and Canada have property taxes.

When a property owner doesn’t pay their taxes, they are usually penalized and warned. If the owner still doesn’t pay the taxes, the property is either seized, gets a lien placed against it, or both. After due process, the property is sold at a tax auction.

Tax auctions provide one of the most extraordinary investment opportunities that exist to date. If properly educated, an investor can by real-estate for a small fraction of what it is worth. They can rent, sell, or use the property for themselves.

In most states, the government taxing agency allows investors to pay a delinquent owner’s taxes. The investor receives a tax lien certificate. If the owner wants to keep the property, they have a limited time to pay off the lien, including interest, fees, and any additional taxes that had been paid after “possession”. If the owner fails to pay off the lien, the property is deeded to the investor.

In some states, the government taxing agency will not allow investors to pay the taxes, so the property is seized and goes to the agency. The property is then auctioned off, usually for back taxes, penalties, and interest. The successful bidder typically gets 1st lien, so the dead is free and clear.

In other states, the delinquent property is sold at auction for the amount of taxes, penalties, and fees, but the original owner has a time period to buy the property back. The buy-back price includes interest (often very high), penalties, fees, etc. The taxing agencies make the deal as sweet as possible to encourage investors to bid on the properties and solve the delinquent tax problem.


About the author:
James Ficarro is a property investor living in Texas. He provides a wealth of information on tax properties in every county in the US at http://www.tax-property-sales.com