foreclosed government taxed homes for sale??

[patricia]

Has anyone heard of this...i saw on a infomercial the other night, when i could not sleep, that there are homes you can buy that have been foreclosed on, and all you have to pay is the government taxes that are owed?

they were showing houses that were worth 200,000$ or more and people were only paying , $500 or $250, or 800$ for them!!...amazing, i forgot exactly what its called, but it is something like...government owed taxes homes for sale??

if you have heard of anything like this, could y ou please explain exactly what they are talking about!!!! lol

thanks

[badmomma]

I have an idea of what you are speaking about. If you wil give me
about a half hour or so I will post some information on the subject
for you.

[JaredfromIndiana]

Those are tax lien sales. Once a year to once a month (depending on the size of the county) the county has tax lien sales.

Say Suzie Homemaker at 1234 Random Dr is $4,000 behind on her property taxes. At the sale you can actually buy a lien against her house. You pay what she owes in back taxes and then you own a tax lien on her house.

In Indiana (may vary elswhere) Suzie is sent a statement telling her that there is now a lien on the house. If she pays the back taxes within 6 months, you get your $4,000 + 10% interest. If she pays the back taxes within 6-12 months then you get your $4,000 + 15% interest. If after 12 months she hasn't paid the taxes then you get the house.

I attended a tax lien sale a few years ago just to see what is all about and there were two kinds of people there. Bankers that had endless amounts of cash that would only bid IF somebody else bid on a property first. The other people that were there were people trying to make a quick buck. At least that was my experience.

Do yourself a favor Patricia... stop watching late night real estate infomercials!! There is no quick OR easy way to become a successful real estate investor. It is hard hard work that is not easy and it certainly isn't fast!!! I've been at it for a couple of years now and it's STILL not easy and I wouldn't call myself successful yet. Anyway, my two cents keep the change!

[badmomma]

Jared is correct allot of the people buying these homes
have more than enough money to out bid us. Here is
some of the information that I found for you.

These sales are conducted by government agencies
for delinquent tax on real estate. These properties
are offered to investors via auctions. These may
be online or at public auctions.

If they have several bidders they have several different
ways to determine the winner.
1. Bidding down the interest. The stated rate of return
is bidded upon and the acceptor of the lowest rate wins.
2. Premium- The investor willing to pay the highest amount
over the lien amount would win.
3. Random Selection- Investors are given numbers and then
choose wheather to bid or not. If not they have to wait
for their number to come up again.
4. Bid down- The investor bids on partial ownership with
the original owner keeping the other portion.
There are problems with this type of investing. Usually you
have to have the money up front. This is a problem for a
good portion of us. I personally don't have that kind of
money available. I hope this helps you.

[JaredfromIndiana]

Good stuff badmomma. Any information on how many of these houses "bought" go through the whole term versus how many redeem and pay the taxes? I bet the percentage is very low of the houses that are actually sold.