Bank REO Training

How To Research Tax Sale Properties. Research is the most important part of your tax sale business.  Not researching properties is like burying all your money in the ground and hoping money trees sprout.

The first thing you will need to do is decide on an area to research.  This decision could come from a few different ways.  Many people like to start out in the area they reside.  This is probably the best way to get started.  If you are already familiar with the area, you will not need to spend as much time doing research.

Others may decide on an area they are familiar with or have family or friends in the area that can do some of the research.

Being able to physically inspect the property is ideal so if you have someone in the area your research will go much easier.

If you don’t have family or friends in the area, don’t worry you can still invest in that area.  There are a number of investors that go to auctions across the country buying property.

The auction is coming up in the area you are interested in. The properties will usually be posted around a month before the actual auction.  Some of the properties will not make it all the way, because the property owner will pay the taxes.

Don’t be discouraged if a couple properties you were planning on buying disappear.  It is a good idea to have a list of properties you would like just in case that happens.

Look through the properties and start sorting them by price.  You should have a price range you are interested in and if the price is too high or too low, don’t waste your time researching that property.

You may wonder why I said too low.  Remember that the bids are based on taxes owed, in most cases.  If the property is $100 then the value probably isn’t very high. It will most likely be a small vacant lot that probably does not have any infrastructure.

Those properties can still work, but you will need to have a good reason to buy that kind of property.

Once you have narrowed down your list, you will also need to quickly pick the area you are interested in.  I think the best way to do this is to pull up Google Earth and look at each property. If you are interested in it, plot it to save the position so it will be easier to come back later.

When you look at the location you can often tell that the property is garbage or may not be what you thought.

You will next need to find out everything you can about the property. Many counties now have the county records online which will allow you to check liens against the property.

Ideally you would want to have a title company run a title report for you, but that can become costly if you have several properties you are interested in.  The main things you want to look for are federal liens.  Federal liens will not be removed or cut in front of from a tax sale.

A great resource is the county clerk or a person who works with the tax sale list.  Some of them are very helpful and can tell you about the properties while others will not help at all.  The important thing is to ask every time.

Checking the value of the property is also a necessity in most cases.  If you plan to sell the property shortly after purchasing it then you will need to find out what the current values are.

You can find the value one of two ways. Either search real estate listings in the area, or call a real estate agent.  They will also have a lot of knowledge about the area. Just remember that they are paid on commission so be sure to compensate them for their time or use them to sell your property.

If you do plan to use them to sell your property you can use them a lot more during your research phase.  Just be careful telling them too much about the properties you are interested in because if it is a really great deal they may compete against you to buy it.

This is basically how to research a property, but there is a lot more detail that can be covered. If you would like to get started and learn every thing you need to know about tax sales then visit our training page and request the free report.