I just came back from the Monroe County Tax Sale. Last year I was able to buy a building lot at this sale for the opening bid which was under $300. By the time I paid the recording fee, realty transfer fee and sale fee, I was up to over $600, but that still wasn’t bad for a building lot that can sell for as much as $25,000 if it can pass a perk test. This year was a different story. I came away empty handed; I only bid on a couple of properties and both of them went up to $5000 or more. Since I would have had to come up with all of the money for any properties that I bid on within an hour after the end of the sale and most of my cash was tied up in another deed and liens, I didn’t have much cash to play with. There were fewer properties in this year’s sale then last year and more bidders. I believe that there were even more first time bidders at this year’s sale than at last year’s sale. More of the properties were sold, and at higher prices than last year. Even the trailers and timeshares were bid up.
What surprised me the most was a 7acre lot that was mostly under water that sold for $15,000! On the tax map it only showed one stream that cut across the property and it looked like there was plenty of room to build. But if you actually did your due diligence and looked at the property you would have seen that there were two streams that took up most of the property with a small strip of land in between them. The lot was also irregularly shaped and there were two easements on the property. You wouldn’t have known about the easements unless you did some checking into the title.
Then there was a pond in a development that sold for $1,000. I came to the conclusion that these newbie tax deed investors liked to fish. I also really can’t explain the 0.02acre lots that actually sold. In past sales, stuff like this would have not gotten any bids and been put on the repository list. It looks like it’s becoming more difficult to buy tax sale properties for “pennies on the dollar” like some real estate gurus claim.
If you plan on going to a tax sale, don’t get carried away by the auction and don’t bid without doing your due diligence first. At the very least you need to look at the property, forget about what you’ve been told about buying through the mail or online unless you have someone who can look at the property for you. For deed sales, you really need to do some type of title search and if you are buying vacant land you must check the zoning on the property. For more information on how to do due diligence for tax deeds and tax liens go to www.taxlienlady.com.
Joanne Musa works with investors who want to reap the rewards of tax lien and tax deed investing. She is the author of the Tax Lien Lady’s E-books, Tax Lien Investing Secrets and Tax Lien Lady’s State Guide to Tax Lien and Tax Deed Investing. For more about tax lien investing e-mail MoreTips@taxlienconsulting.com.