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Tractor Talk Discussion Forum

OT---BUYING UP PROPERTY TAXES

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lenray

12-25-2003 11:50:32




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Was wondering if any of you folks have any experience with picking up property taxes that the owners have let go delinquent--NOT trying to get the properties but making the interest and penalty fees. Have funds in CD'S but not making any interest income at these low rates.
Located in Michigan.
Thankyou len




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havvey

12-26-2003 19:38:27




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 Re: OT---BUYING UP PROPERTY TAXES in reply to lenray, 12-25-2003 11:50:32  
in my state it goes 3 years then town forcloses and sells. you are responsible for any other costs liens etc. in the case of the poor the towns let them live there as it would cost alot if they went on town assisted welfare. in the case of usless properties (junkyard etc) you are responsible for clean up and removal i would study the laws of your state.



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Irv

12-25-2003 19:57:22




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 Re: OT---BUYING UP PROPERTY TAXES in reply to lenray, 12-25-2003 11:50:32  
About 20 yrs. ago, I worked with a guy who was in the 2nd mortgage business, he made some money, but it took years to get it sometimes. In one case he loaned money to a widow, and then tried to foreclose on her house. It didn't work - her brother came on the scene - a lawyer, in court everyday anyway, and he took this guy for a ride! The mortgage guy spent a year just getting his own money back, and never got S*** in interest! This is a tough business, I think. Irv

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Irv

12-25-2003 19:50:10




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 Re: OT---BUYING UP PROPERTY TAXES in reply to lenray, 12-25-2003 11:50:32  
I have a friend of mine that did that for years in Mich. Howevere he doesn't do it anymore, said the stat stepped in a couple of years ago and took it over - no way to make money. I don't know what exactly the state does, but he made it sound like they set up thier own system of interest and cut out the little guys. It was always a good way to get people to hate you anyway! my 2c Irv



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William

12-25-2003 19:48:26




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 Re: OT---BUYING UP PROPERTY TAXES in reply to lenray, 12-25-2003 11:50:32  
Sounds like Vulturism.



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jimNCal

12-25-2003 18:00:11




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 Re: OT---BUYING UP PROPERTY TAXES in reply to lenray, 12-25-2003 11:50:32  
Sounds like the worst brand of opportunism to me.
I'm sorry if it offends anyone, but I'd feel like some kinda jackal or hyena getting involved in a deal with the tax man. Around here, we take up a collection before we'll allow a TEMPORARY setback to become a permanant disaster.



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bob

12-25-2003 19:38:48




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 Re: Re: OT---BUYING UP PROPERTY TAXES in reply to jimNCal, 12-25-2003 18:00:11  
Courthouses make mistakes all the time & sell non-existant properties when in fact the taxes have been paid; a bookkeeping error. But they wont give you money back when they make these mistakes.



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kyhayman

12-25-2003 17:26:04




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 Re: OT---BUYING UP PROPERTY TAXES in reply to lenray, 12-25-2003 11:50:32  
It sounds like your state is similar to Kentucky. Other states (as mentioned by some other folks) actully sell the property. Here they sell the tax bill, person who buys it gets a lein on the property and can set their own interest rate and/or file to collect in court through wage garnishment but can not force the sale of the property. If the property ever does sell (or goes into probate at owners death) you get your money and interest. I've thought about it but it seems like a good chance to tie up a lot of money with unsure repayment. I know some folks that never pay taxes, they have a bunch of folks on the deed (literally, one has 34). I decided not to do it, way better returns on buying rental property (or even stock in blue chip stocks). Cd's are safe, there's always risk to getting greater returns.

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wayne

12-25-2003 21:18:27




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 Re: Re: OT---BUYING UP PROPERTY TAXES in reply to kyhayman, 12-25-2003 17:26:04  

I think what you are referring to is TAX LIEN INVESTING.It is not available in all states. Where it is available, you are basically loaning money to the jurisdiction of the delinquent property. It is safe and secure, but you need to know what you are doing. Good Luck.



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Steve from Tn

12-25-2003 14:33:34




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 Re: OT---BUYING UP PROPERTY TAXES in reply to lenray, 12-25-2003 11:50:32  
I'm not sure what it is you are thinking about doing. Usually after a property owner has failed to pay his property, there is a auction sale of the property. If this property is sold the previous land owner has one year to retrieve the sold property. The new owner can charge something like 10% to the previous owner if he chooses to retrieve his property. Rarely do we see valuable property go in a tax sale. Most of the time the taxes owed against it are more than the property is worth. In my county, the bidder has to bid at least the amount of the delinquent taxes along with penalty and interest. I know of one house that was assessed at something like $50,000 that sold for $200. The woman who owned the house just found out this year that it had sold back in 1995. She had continued to make sporadic mortgage payments to her lender and her lender had continued to pay her taxes on the property each year. The new owner did not charge her any rent or contact her after he bought the house. Bizzare!

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Davis in SC

12-25-2003 13:58:58




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 Re: OT---BUYING UP PROPERTY TAXES in reply to lenray, 12-25-2003 11:50:32  
Several folks in our county bought land at a tax auction that turned out to be a Superfund pollution site. There was talk that they could be held responsible for at least part of clean-up costs, but I never heard final outcome.It seems that it is a ploy that some use to get rid of polluted land. Slim chance of this happening often, but it does make me wonder if the small amount of interest made would be worth the risk..... .

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Slowpoke

12-25-2003 16:46:08




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 Re: Re: OT---BUYING UP PROPERTY TAXES in reply to Davis in SC, 12-25-2003 13:58:58  
The county, Home Owners Ass'n or other taxing authorities will sell the property for the back taxes(or HO dues). I'm not sure if they sell for market value and send the balance to the previous owner or not. If it's sold for the tax balance only, the person has a certain amount of time to retrieve it by paying you the back taxes and your interest, etc. You will have to make future tax payments while you wait. I don't know what happens to the mortgage since lenders want payoff at transfer of title.

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Rusty Jones

12-26-2003 11:55:01




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 Re: Re: Re: OT---BUYING UP PROPERTY TAXES in reply to Slowpoke, 12-25-2003 16:46:08  
I have a friend here in Pennsylvania who buys up tax delinquent property at Sheriff sales. I'm not sure of how this works, but i think the owner has a short period of time to pay up the money owed, and court costs, then if they haven't paid up, the high bidder gets the property! He's made a pile of money with this! But, not to be a Scrooge, he'll tell the former owner: "I'll buy the materials for fix-up if you'll do the work." (If able) Then he charges them less money for rent than the mortgage payment was, and they can live there as long as they want, with him paying for repairs as needed. Then, when they move out or die, he can sell a nice house for a profit! RJ

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