I Bought This For $24.36 and Sold It for $125,000 - BULL CRAP !!

By
Real Estate Agent with Network Real Estate, Inc.

Tax Lien Property

I bought this home for $24.36 and sold it for $125,000 in just 18 days! You can too!

BULL CRAP!!!!

  I don't know what the general consensis in the country is, but I'm sick and tired of these real estate con artists telling people they can buy Tax Deed Property for "pennies on the dollar and sell it for a fortune in a matter of days"!

  In Arkansas, here's how Tax Deed Property works and I sure would like to hear from others across the country to know just WHERE these wonder deeds can be had.

  First you have to be delinquent on your real estate tax for 3 years at which point the county collector will turn your file over to the State Land Commissioner
    Then the Land Commissioner sits on the unpaid tax bill for 2 more years before setting it up for auction.  That's a total of 5 years of unpaid tax.
  The Land Commissioner sells the property at auction for the ASSESSED VALUATION, which is 20% of the value on the books, so if your home was valued at $100,000 then that means the Commissioner sells it at auction STARTING at a price of $20,000.  PLUS you have to pay the past 5 years of unpaid tax.
    Now here's the Kicker!  If you bid $20,000 and get the "Land Commissioner Deed", then the original owner has a 1 year Right of Redemption.  That's right....you bought the property but the original owner can come forward and pay the back 5 years taxes and get the property back and the Commissioner will return your $20,000 and tax paid and THAT'S IT!  So if you spent 1 penney fixing it up...you LOSE that money.
    The Land Commissioner says that "after the sale, the original owner has to file a notice of objection within 30 days as to why the sale should be set aside OR their chances of having it set aside are virtually nill".  So one could conclude you are safe after 30 days of purchase BUT they still have the legal right for 12 whole months to file an action that "can" be undone.

  So the best you can do is pay some $25,000 cash for a $100,000 home and let it sit vacant for a whole year before you can consider it yours.  That's the way it is in Arkansas, so WHAT STATE LET'S YOU PAY $24.36 AND SELL IT FOR $125,000 IN 18 DAYS????  I may have to move to that state OR start selling a "Real Estate Infomercial" on How To Get Rich On Tax Deed Property!

 

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Rainer
16,094
Stacy Jones
West Little Rock Title Company

David -- yeah, a lot of people try to stay clear of that don't they.?..A stand alone transaction is usually much cleaner.

August 02, 2008 08:44 AM
Rainmaker
251,631
Don Eichler
Century 21 Shirley Hooks, Inc.

David,  Texas is not a tax deed state like in your state and I have bought a number of properties as an investment here.  We do have a time frame where the owners can recover the property but they have to pay a percentage for any improvements made to the property.  In Texas we have auctions on the courthouse steps with the buyers receiving a Sheriff's Deed to the property subject to recovery by owner.  Any property not sold at the auctions can be purchased at the tax office on a first come basis. 

August 02, 2008 02:06 PM
Rainer
60,740
David W. Bolick
Network Real Estate, Inc.

Don...sounds simplier than here for sure.  I have a potential deal now that could be bought for about $14K with no other bidders in a remote place that could sell for around $150K but I don't have the money to sit on it for a year, plus if anyone else bids it could go to maybe $50K.

August 02, 2008 02:14 PM
Rainer
16,196
Tim Brown
SunTrust Mortgage NMLS #843991

David, Great post.  These infomercial snake-oil salesman are a hoot though. I love it when they run the disclaimer "individual results may vary"...gee ya think?  If churning 50 grand on a deal was so easy...why on earth do they need to sell you a box of dvd's for $199.  I still watch them though..scary huh..

August 22, 2008 07:32 AM
Rainer
60,740
David W. Bolick
Network Real Estate, Inc.

LOL, that's funny Tim.  Yeah...some of them irritate the crap out of me.  You'd think there would be some law against blatant lying.

August 22, 2008 07:42 AM
Anonymous
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Rainer
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David W. Bolick

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