If you aren't investing in tax defaulted properties... why not?
Investing in property is a great way to get rich. But to be as successful as possible, you'll need to know the right properties to buy - before you make a bunch of mistakes. And of course, we're talking about tax defaulted properties. Tax foreclosures beat every other type of property for a couple of reasons.
Let's start with the mortgage. Tax defaulted properties usually don't have one! If a mortgaged property goes tax delinquent, the mortgage company will pay the taxes. So when you buy a tax foreclosure, usually all you have to pay is the taxes and it's free and clear. These properties hold the greatest potential for huge profits. No mortgage means that all the equity in the property - however much it's worth - is yours for the taking.
If you know the right time to go after it, tax defaulted property is also the cheapest to buy - the other big reason you should focus on it. The back mortgage payments alone on a mortgage foreclosure could cost you more than the entire purchase of a tax foreclosure. Tax properties, on the other hand, can often be gotten for less than the cost of your average night out on the town with a couple of rowdy friends. How DO you get a tax defaulted property for such a small amount? If you're imagining the auction block at tax sale... think again.
No - you'll want to buy without buying at tax sale - and after someone else has already "bought" the property. If you wait until the very end of the redemption period, you will find a set of owners you definitely want to buy from. They aren't going to redeem, and they're just letting the property go. Want their deeds? Just ask for them. Most of these owners are glad to get rid of it. Offer $200 for their time in signing the documents.
Investing in foreclosures using the technique above is extremely profitable, and limits risks you'd otherwise have to take on at the tax sale. There aren't any good excuses for not getting involved - you have the ability to do this. It's a no-brainer that your likelihood of succeeding is high - just like the number of foreclosure properties right now. Don't let the profitable inventory of tax defaulted properties in YOUR area get away!
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