The business of Tax Lien and Deed investing sounds easy and profitable. And it can be, but not without some hard work put in.

Based on my experiences, it’s simple but not always that easy after all and I’ve witnessed and even experienced.

This article will help you avoid committing those mistakes. Here are some tips to use when continuing in this business:

Don’t Rush When Evaluating Properties in Tax Sales

When looking at a property, do not make a hasty judgment. Don’t get overwhelmed about the offer. Get a local realtor to help you see the complex nature of the property market. A realtor will help you identify any problems regarding the property, market, area, and the like.

Be Cautious with Property Values

Avoid paying more than one-third of the fair market value of the property. Identify the value of the property. Contact the County Assessor’s office and request their record of the market fair value for the property you want to buy. Sometimes back taxes are not well managed. That is why it is safer not to pay more than one-third of the fair market value or the comps in the area.

You can push this if you have experience, but be careful!

Always Inspect Properties in Person

Don’t just rely on the online listing. Inspect the property personally. It is better to inspect the property first before you decide to buy it. Some properties are way worse than in the pictures. So, don’t buy the house if you haven’t seen it.

Be Wary of Condemned Properties in Tax Sales

Don’t consider condemned properties if you are not ready. Condemned houses are considered the black sheep of the real estate industry. Although buying a condemned property offers a steep discount, you may need to tear it down and rebuild it from scratch in some cases.

Additionally, the government or banks often own these properties, which makes selling them difficult due to the complicated process. Be prepared for that!

Avoid Properties on Tribal Lands

Properties in tribal lands are exempt from property taxes. So, you’re just wasting your money if you buy a property in a tribal land. Make sure to check tribal boundaries before investing.

Use an LLC for Purchases in Tax Sales

Avoid buying properties under your name. Purchase under an LLC (limited liability company) to limit potential liability. This protects you from any issues that might arise.

Steer Clear of Properties with Undivided Interests

Properties with undivided interests are often in complicated states. Conduct thorough research about the property and its owners. If you can’t afford an attorney to process a partition action, it’s better not to buy the property.

These are just few important things that you need to know and avoid when it comes to tax sales investing. Check this video about Tax Lien Dangers To Avoid.

Talk Soon

Dustin

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