Do not despair of findings bargains in real estate, even with tight money and inflated prices. Opportunity may not always knock on your door, but it does lurk within the ponderously slow machinery of government.
In short, it yields results only to the well prepared.
The reasons that tax-collecting local agencies, such as counties, are reasonably sure of collecting real property taxes is that the law provides a way for the county to sell the property when the taxes are overdue by a given number of years.
Almost every scuh county has an annual auction at which tax-delinquent properties are sold to the highest bidder. But before you run down to the county seat with your life savings, there are a few homework items you need to complete.
You need to obtain, well in advance of an auction, a list of the properties that are planned to be sold. You need to be aware that the owner or the owner's representative can usually redeem the property by paying all the back taxes and penalties prior to the auction, so you'll need to plan on researching and bidding on several properties.
If you go to the auction to bid on just one property, and it is redeemed at the last minute, you will have lost a year (until the next auction) and will have wasted your efforts.
The list will usually have the legal description and the assessor's parcel number of each property, along with an estimate of value, minimum bid, or an indication of whether or not the property is improved.
The new investor would be well advised to stay away from improved property at the tax auction because of the complications of evicting what may be the previous owner.
Vacant lots are, however, easy to inspect, easy to investigate, and easy to resell.
Once you have the list of properties to be auctioned, it is necessary to eliminate the items that are not of interest to you.
Make a checklist of characteristics that would make a vacant lot undersirable to you. Your list might look like this:
* Property is improved.
* Property is geographically undesirable.
* Property is landlocked.
* Property is irregularly shaped, too small, etc.
* Property is in a wash or watercourse or on a hillside, etc.
* Property will probably cost more than your budget allows.
* Other drawbacks, such as liens, assessments, and zoning, may prevail.
some of this screening information will be evident from the auction list itself, but other items will require some effort.
You will need access to the tax assessor's maps, to the official records of liens, and a personal set of maps of your county similar to those published by Thomas Brothers. Armed with this information, you are ready to proceed.
Before you start driving aimlessly around town looking at properties, why not let your fingers do the walking first?
Take the auction list to the public document room or other location where the tax assessor maps are. Look up each parcel in the auction. Many times there is a solid reason that the previous owner has not paid his taxes, and that reason may be obvious from the assessor maps.
As you find slivers, odd shapes, and flooded or landlocked parcels, cross them off your auction list. Obtain copies of the maps (by reproducing them, sketching them, or whatever) of the assessor maps of the remaining parcels. These will be individually investigated by you.
Now you are ready to drive to the site of each of your prospective purchases. Using your area maps, determine the rough location of each parcel shown on the map. Use the area map street index if you have to. Cross off your list any parcel that has no visible means of access.
If you can't drive to it, how do you expect a future buyer to drive to it?
Your area maps will soon be dotted with sites that you want to visit. Now, and only now, can you plan a route that will swing by each site in some logical order.
Make your area maps work for you by putting them in the same order as your planned site-seeing trip.
As you look at the sites you've selected, make detailed notes about the property. Does it slope? Are there curbs and gutters? Streetlights? An old foundation? Weeds? Debris?
What are the neighboring lots like? Again, an advance checklist would be helpful.
You may not return to the property again before you bid on it, so write all the notes that you think are important directly on your copy or sketch of the assessor map. Later on, you will want this information to aid your checking for liens against the property.
Before you leave each site, write down what you think the property is worth. This may take some additional homework, such as looking up recent sales in the area, asking a friendly real-estate broker, and so on. Also write down what you think you would be willing to pay at the auction for the property. This should be substantially less than the estimated market price.
Don't worry if you are not confident in your estimates; only homework and experience will improve them measurably. For now all you need is an approximation.
By all means, cross off your list any properties that you have decided you would not like to own. Now that you are standing on a particularly vacant lot, you may find that many more candidates are eliminated.
You may want to start a system of 3-by-5-inch cards at this point so you can record detailes about each property still on the list.
All the various numbers and facts you have collected are easier to handle this way.
Be sure each card has the item number for the forthcoming auction, a legal description, a tiny sketch, and room for still more detailes. You can sort these 3-by-5 cards into any order you want without having to shuffle through the two sets of maps and the auct ion list.