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:
When looking at a property, do not make a hasty judgement. 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.
Avoid paying more than one third of the fair market value of the property. Identify the value of the property. Reach out County Assessor’s office and ask for their record about the market fair value of the property that you are interested to buy. Sometimes back taxes has not been well taken care of. 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!
Don’t just rely on the online listing. Inspect the property personally. It is better to inspect the property first before you will make a decision to buy it. Some properties are way worse than in the pictures. So, don’t buy the house if you haven’t seen it.
Don’t consider condemned properties if you are not ready. Condemned houses are considered the black sheep of the real estate industry. Although, you will be getting a steep discount when you buy a condemned property. In some cases it needs to be torn down and start all over.
In this case also, a property is owned by the government or bank rather than individual so it will give you a hard time selling it because of the complicated process. So be ready for that!!
Avoid buying properties in a Tribal Lands. Properties that are in tribal lands are exempted from property taxes. So, you are just wasting your money if you are buying a property in a tribal land. Make sure to check first tribal boundaries.
Avoid buying a property under your name. Buy a property under LLC or limited liability company to limit potential liability that you may encounter. This avoids problems that can arise from liabilities and such.
Avoid properties with Undivided Interests. These property types are in a complicated states so you need to do due diligence and thorough research about the background of the property and its owners. If you can’t afford to get an attorney to process partition action, don’t buy the property.
These are just few important things that you need to know and avoid when it comes to tax sales investing.
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