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Tax lien sales in TN
Asked Nov 25, 2006, 09:16 AM
Hi and thanks for being there. I'm interested in beginning purchasing tax lien properties in and around Knoxville TN. Does anybody out there know the procedure. I have a list of properties to look at which are going up for auction soon. I think I should go take a look at the area, the houses, etc. But should I do a title search? I called the court house and the senior guy for that department told me when I am the high bidder on a property I get it free of any other encumberances. To me that sounds too good to be true. If any of you can give me some insight, I'd be grateful. Thanks
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Nov 25, 2006, 11:30 AM
No, that is how it works, the tax lien takes priority over all other liens.
Now remember if the taxes on a house with a 200,000 mortgage is not paid, the lien holder pays it, or they default the loan long before the tax lien gets it.
Most of the properties will be empty lots, half burnt down houses, old wreck houses with no windows or doors.
I got one with about 30 dead cats in it once, nice looking from the outside.
I normally have fun with mine, I never go look at them, I buy them and then go see what I got.
My last sale, was some acre that I got for about 300, about 14 year ago, I just held on to it, I recently sold it for about 15,000 dollars.
But if you start looking around, and it is a good property, the owner may remember and go pay taxes, so you want to look quietly.
Also remember if you have a list that is a couple of week before the sale, most likely about 1/2 or more will get the taxes paid before the sale, and will not sale, So don't put too much work looking all over.
Normally the best deals are where a elderly person with no real next of kin dies, no one pays the taxes over a few years and the property is sold.
Don't expect to get that 3,000,000 home for 1000, it does not really happen at tax sales.
If you have the cash, you will almost always double your money if you will do a little work and cleam up the property and resale it.
But also remember you get not only the property bur also all liability.
You buy a home full of asbestis or land with trash dumped all over it,
And you are liable for any injuries the minute the gavel falls, so the first stop after you get the property is to your insurance agent and put liablity insurance on it.
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Nov 25, 2006, 02:26 PM
Tax lien sales in TN.. a further question
Fr_Chuck, thanks for the quick response. I see you live here in TN. My next question to you is can you please outline for me the exact steps you take to purchase a property. And when does the one year for them to pay start? You would not advise me to get too involved with checking on a title search, is that correct? So I guess I'll just ask you to please just outline for me what I need to do and when and how to do it. I'm sorry for this seeming silly question, but I believe that if I don't know something, just ask. Thank you
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Nov 25, 2006, 04:26 PM
You can spend hours doing the title work, and then the propery owner will come in 10 minutes before the sale starts and pay thie tax and the property won't be sold.
But no, the title is clear, But you will want to do a complete title search afterwards, that way you can decide what type of deed you want to sell it with. ( I do either a limited warranty or quck claim, and often do it on contract for deed so I make more money)
When I was in to it more, I used to get the list about 2 weeks before the sale, and drive around and look at the properties from the road, some are hard to find, since there are no house numbers on empty lots and undeveloped acre. ( and you don't want to stop in some neighborhood either)
I would mark which ones were within my price range, and which ones looked like I could sell.
I then go to the tax sale and buy them, I normally keep them two years, to be sure there is no one making any claim, then put up my forsale signs.
I normally do nohting the first year, and then clear lots and maybe some other work on others, on the second year.
I hold some for years if I think they will be worth more latter.
Next never take it seroius, if someone makes a claim, as long as I get my money back, plus interest and payment for any work I did to property, I am still m aking more money than I would in the bank.
The one I remember the most, we bought this one property, went and looked and it was fenced with a couple of ponies on it, for the kids next door, their parents got the property from their parents, and forgot it had a separate deed and tax bill, in their parents name.
My wife made me give it back to them as a present, because of the little kids.
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