GoAhead BeADeedGrabber

Go Ahead - Be A DeedGrabber!
Copyright 2008, Richard Dawson Page 2

Go Ahead, Be A
DeedGrabber!
Start Getting Deeds to Tax Sale Property
WITHOUT Attending Auctions or Buying Tax Liens
By Rick Dawson
Copyright 2008 Richard Dawson
Legal Disclaimer
This book is intended to provide accurate and authoritative information on the subject of tax
sales and purchasing property that is in some stage of the tax sale process. It is offered with
the understanding that the author is not an attorney or accountant, and is not offering legal or
tax advice. Please consult with an attorney in your area before you proceed with any of the
suggestions found in this book.
This book is intended for instructional purposes only. Every effort has been made to reflect the
applicable laws as of the date of the publication of this book. However, this is a dynamic field
of endeavor in which new laws are enacted, old laws revised and/or reinterpreted on a
continuing basis and where statutes, rulings, and case law are constantly changing. Readers
are advised to proceed with the techniques described herein with caution. The author,
printers, licensees, nor distributors make no warranties, express or implied about the
merchantability or fitness for any particular use of this product.
Copyright 2008, Richard Dawson
Published by
DeedGrabber.com
PO Box 3348
Munster, IN 46321
219-712-9722
www.deedgrabber.com
All rights are reserved under State and Federal Copyright Law. No part of this book may be
reprinted, reproduced, paraphrased or quoted in whole or in part by any means without the
express written permission of the publisher and author.
Introduction
Im glad youve decided to give DeedGrabbing a try. In case youre not a
subscriber to my email list, DeedGrabbing is the process of getting deeds to tax
sale property from the owner right before the owner loses the property to taxes.
I cant take credit for making up the term; it was actually made up by tax sale
investors who thought they were about to get a bargain property before I came
along and bought the property directly from the owner. Now that weve defined
DeedGrabbing I wont have to put it in quotes any more!
Im sure youre looking forward to getting started. As an avid reader of ebooks,
Ive always been annoyed at the fluff that many writers introduce into the
material in the beginning and throughout. Therefore Ive left off Chapter 1 (How
I Went From Living in a Tiny One-Bedroom Apartment to A McMansion in 2 Short
Years) and Chapter 2 (How to Motivate Yourself to Make Money in Real
Estate). Seriously though, Im going to cut to the chase and make this as easy
and step-by-step as possible.
Our goal is very simple: find unwanted property that we can immediately resell
for a profit. We will be finding owners who are about to lose their property,
purchasing the property, and reselling it for a profit. Thats it; buy low and sell
high at its simplest. Or maybe buy super-low and sell low would be a better
description. Well be looking to make $5,000-$20,000 on most deals, and
occasionally get a whopper where we can make $100,000 or more.
In case youre new to tax sale investing or real estate investing in general, lets
talk a little bit about the tax sale process and how it leads to opportunities to
acquire real estate for pennies on the dollar, without going to auctions and
investing large amounts of money.
Every state in the country has a process for handling real estate on which real
estate taxes are not paid. Sometimes youll even find that there is an alternate
process for a certain city or county within your state. In all locations, its safe to
say that if an owner ignores the payment of his or her property taxes for long
enough, he will lose the property and an investor or the local government will get
a chance to purchase the property or otherwise take title away from the owner.
In some states it takes several years of non-payment of taxes to result in a
property being put on the sale list. And sometimes there is an additional time for
the owner to bail out the property after the sale.
We will be finding the owners who are at risk of losing their property, and buying
it before its lost.
Your first job will be to look up your states tax sale statute and to get a good
understanding of the process. In most cases the statute will only be a few pages
long, and you will only be paying close attention to the parts which concern us as
DeedGrabbers (Chapter 1). Studying the statute a few times will give you a good
idea how your states tax sale process works, and youll find the rules are usually
pretty simple once you grasp them. It doesnt hurt to go to your local county tax
office and talk to a clerk once youve read the statute to make sure you
understand everything perfectly.
While youre there speaking with the clerk in the tax office, youll also find out the
date of the tax sales in the past or future that will give you the properties at risk
of loss, and get a list of the properties (Chapter 2).
Next, youll update the owner addresses on file with the county and try to get a
phone number for each owner. Youll do this by uploading the owner addresses
you got from the county to a website that will return updated addresses and
phone numbers if available (Chapter 3).
Once you have the best information possible, youll send letters to the owners of
the property, letting them know about the tax sale of the property and offering to
talk to them about buying the property (Chapter 4). Mail is all the contact you will
need to do to make money. But if you want to double or triple your business, call
or visit the owners as well (Chapter 6).
Youll be offering to purchase the property for a small amount of cash-in-hand to
the owner, and youll take the property subject-to the back taxes, meaning you
wont pay them off just yet (Chapter 7). Your contract will state that you can back
out of the purchase agreement if you dont like what you find out about the
property later, before or after you get the deed. Dont bother doing any serious
research on the property until you have a deal penciled in with the owner!
What do you say to the owner when they call or you call them? Well talk about
that in Chapter 5.
After youve struck a deal with the owner, youll either close the deal
immediately, or do some further research on the property. This will be covered in
Chapter 8.
Once everything looks good, youll quickly prepare the paperwork and send out a
mobile notary who will take it to the owner to get signed and notarized (Chapter
9).
Now its almost payday. Depending on the situation, well get the property
cleaned up a bit and get rid of any junk on the premises. Then well get a Realtor
out to the property and get it listed on the MLS. Or maybe youll want to rehab
the property or sell it on contract to someone. I personally like to cash out in as-is
shape and move on to the next property (Chapter 10).
Wouldnt it Be Easier to Just Invest Right at the Tax Sale?
Right now you might be thinking it would be easier to be a tax sale investor
instead of a DeedGrabber. Plus, youve seen websites and infomercials that show
the incredible bargains that investors have gotten at tax sales (the $286.12 house
free and clear on TV comes to mind). If $286.12 for a free and clear house
sounds sexy to you, Ill tell you first that Ive gotten deeds to houses for as little as
$10.00, so you wont be missing out on super-bargain purchases.
Not only is it more time-intensive to be a tax sale investor than a DeedGrabber, it
takes a lot more cash and involves a lot more risk.
If you buy liens or deeds at a government tax sale, you will have to research
hundreds or thousands of properties when the delinquent list comes out, and
assign a value you are willing to pay for each. Therefore you will have to know
your market extremely well. You also may have to predict what properties may
be worth years from now when you actually get title to them through a tax lien
(more on that later). You will not be allowed to inspect the interior of any of the
properties youre researching, and the actual address of the property may even
be difficult to pinpoint based on the information in the list.
After you have driven around the county until youre blue in the face, and
attempted to assign a maximum value you are willing to pay for each property,
you will then attend a sale with other bidders.
If the county is offering a deed to the property (immediate ownership) you will be
bidding against many other investors, many of which will likely bid the price of the
property to near retail value. No money to be made there.
If the county is offering a lien against the property, which you will use to try to get
ownership of the property later, you will have to wait 1 to 5 years to acquire
marketable title to the property, and along the way you will probably be paid off
by the owner or a mortgageholder. I would estimate 95% or more of liens are
paid off during the course of the tax sale process, resulting in no property
acquisition by the tax sale investor. You are also risking that the property will
sustain damage during the acquisition process, and will not be in the same
condition as it was when you made your bid.
Finally, there is potential for legal problems throughout. You will most likely have
to hire a lawyer to send notices to owners and lienholders on every property lien
you buy. And finally, whether you got a deed directly from a deed sale or
acquired it through your tax lien, you will probably have to do an additional legal
procedure called quiet title to get marketable title. The quiet title procedure is
where owners and other interested parties love to crawl out of the woodwork
and challenge your deed. Ive seen tax sale buyers invest up to $20,000 in
additional legal fees to protect their deed from being overturned in the quiet title
action.
Contrast this with buying unwanted properties now, with little cash invested, and
making immediate profits.
I hope youre convinced that DeedGrabbing is the way to go. Now lets look into
each step of the process in greater detail.
Chapter 1
Learning the Tax Sale Procedure in Your Chosen State(s)
Before you get started contacting owners and buying properties, you need to take
a little time to learn how the tax sale works in your state. I recommend starting in
your home county to learn the procedure your state uses to process
tax-delinquent properties. As you begin DeedGrabbing you will see that it is quite
easy to work in other states as well, even if they are far away.
In general, your state will be a deed state or a lien state. A few states have both
liens and deeds. The easiest way to get started is to go to www.taxsalelists.com
and under the Resources tab, click Tax Sales. Then register for a free account.
This site is geared toward investors who want to invest directly at the tax sale,
not DeedGrabbers like us, but it also has a lot of resources we will use later.
After you get your confirmation email, log in and follow the Resources -> Tax
Sales procedure again. Youll find a map of the US that is color-coded to show
which classification your state falls under. If you click on your state on the map,
you will see a display on the left which will give additional information.
So what is the difference between a deed state and a lien state?
Counties in a deed state generally auction off delinquent properties at a periodic
sale, and the winning bidder is awarded a deed to the property immediately. That
bidder now owns the property, free and clear, and after doing some additional
legal work, can sell the property or do with it as he or she wishes. This also means
that the owner of the tax property loses it permanently if the taxes are not paid
before the sale.
In a lien state, the county only sells a lien against the property to recover the
unpaid taxes. Unlike a winning bidder at a deed sale, the investor who buys the
tax lien does not usually have any ownership rights in the property at that time
the lien is purchased. However, after a certain amount of time set out in the state
statute, called the redemption period, the investor can apply for a deed to the
property. If the owner pays the taxes during the redemption period, the money
the bidder invested in the lien is returned with interest, and the lien is released.
We as DeedGrabbers are looking for what I call the Drop Dead Date for the
owner. That is, the date that the owner will lose the property permanently. If the
property is in a tax deed state, the Drop Dead Date will usually be the date of the
tax deed sale. If the property is in a tax lien state, we first need to find out what
the redemption period is in the state. Say the redemption period is 2 years; the
Drop Dead Date will be 2 years after a tax lien against the property is sold.
These are very general guidelines. Each state is different, and little details can
matter. Here are some interesting variations Ive encountered in some of the
areas Ive researched:
Indiana and Washington, DC: Both issue tax liens against property, and
have a one-year redemption period after which the tax lien holder can
apply for a deed to the property. Indiana has a strict one-year deadline to
redeem, and will not accept redemptions past the 365
th
day after the sale.
However, Washington DC allows redemptions all the way until the court
grants the investor his deed, which may be a significant time after the end
of the redemption period, especially if the owner appears in court to ask for
extensions.
Florida: Offers liens as well, with a fixed redemption period. However, at
the end of the redemption period, the investor does not get the property.
The property is auctioned at a tax deed sale which generates the money to
pay off the lien. Therefore you would ignore the lien sales, which do not
result in the loss of the property, and concentrate on the deed sales, which
do result in loss of the property.
Even though Georgia is a tax deed state, it is a redeemable deed state,
meaning that even though the bidder at the sale gets a deed, it can be set
aside if the owner pays the delinquent taxes within a certain amount of
time after the tax sale. Therefore for our purposes it is more like a tax lien
state because the drop dead date would be some fixed period of time after
the sale.
Texas offers liens against property with a fixed redemption time. Though
the investor who holds the lien does not have ownership in the property at
the time he buys the lien, Ive heard that he can legally demand rent and
evict occupants while he is just the lienholder!
This is not meant to be an exhaustive explanation of how all states tax sales
work. You will have to read your states statute carefully, and confirm with
your county that your understanding is correct. What Ive tried to show here is
that each state will have quirks that could be important to understand. Also,
while youre at it, take note of the name of the governmental agency that
handles delinquent property taxes. This could be known as the auditor,
treasurer, tax collector, or something similar.
All you have to do is put yourself in the shoes of an owner who will stop paying
his property taxes forever. When will his property be offered at some kind of
sale? Will he lose his property right then? Will he get more time after the sale
to pay, in the case of a lien or redeemable deed? How much longer? Will he
be able to redeem all the way until the deed is actually issued or even beyond?
Lets look at the statute in my home state, Indiana.
Tax Lien State Example
Ive researched many states statutes and in every case Ive been able to find
the statutes online. On the off chance your states statutes are not online, go
to the library and find the latest written version.
I simply Google [state name] code or [state name] statutes.
When I Google Indiana Code I get:
There it is, right in the first position. Try to find a version where you can start
at a root page and go deeper into the code by clicking on main headings. Thats
what we find on Indianas main page.
When I go to the main page, I click on Title 6 (Taxation), then Article
1.1(Property Taxes), then Chapter 24 (Sale of Real Property When Taxes or
Assessments Become Delinquent). I notice that Ill want to read Chapter 25
also, Redemption of and Tax Deeds for Real Property Sold for Delinquent
Taxes and Special Assessments.
Your state may have the information listed first under Property and then
Taxation. Search around these two key words until you reach a section
about delinquent property sales.
Ive included sections of the Indiana Tax Sale Code in Appendix 1 that were
going to discuss, so you can read along if you wish while we discuss the
example. Or go to
http://www.in.gov/legislative/ic/code/title6/ar1.1/ch24.html to view it online.
Were not interested so much in the period before the property hits the sale
list. Well let the county figure out which properties are delinquent and
compile the list. However, its a good idea to read it over quickly to get a
background on the process.
We see that the county treasurer sends a list of delinquent taxpayers to the
county auditor on or before July 1
st
each year, or 51 days after the tax
payment due date, and that the taxpayer stays on the list unless he pays his
taxes. This is the most preliminary stage in the tax sale process.
The next few sections describe ways that the taxpayer can be taken off the list,
and prescribes noticing that the county must do to each taxpayer on the list.
Then IC 6-1.1-24-4.7 states that after the notices are made, the auditor must
apply for judgment and order of sale of the property.
The next section, IC 6-1.1-24-5, describes the conduct of the sale. This is
important because it will state the terms of the sale.
Subsection (e) states: The county treasurer shall sell the tract or real property,
subject to the right of redemption, to the highest bidder at public auction.
So, we know that there is a right of redemption for the properties that are
sold. The rest of the chapter discusses technical details which generally affect
people participating in the sale.
Now well look at Chapter 25 to see how redemptions work, and learn how a
tax sale buyer can eventually get a deed to the property.
IC 6-1.1-25-2 describes the calculation of the amount needed to redeem the
property after it is sold. You will usually just call the taxing body when you
have a deal and have them tell you the amount needed to redeem. However,
its useful to have an idea how it works so you can estimate the amount while
youre dealing with an owner.
IC 6-1.1-25-4 is really the meat of the statute for DeedGrabbers. We see that
liens not sold under special circumstances have a period of redemption of 1
year from the time of sale. Other liens, usually those that were not sold at a
previous sale (leftovers), or acquired by a government body, only have a 120
day redemption period. From experience, I can tell you that liens or deeds
that are not sold the first time they are offered, are usually on worthless
properties. Therefore well concentrate on the liens that were sold the first
time they were offered, which carry a one year redemption date.
In IC 6-1.1-25-4.5, we see that the tax lien buyer is entitled to a deed if the
redemption period has expired, and they have given the proper notice to the
owner and other interested parties in the property.
Since the redemption period is 1 year for the liens were going to research, we
know we must add 1 year to the date of our countys last sale, and then well
arrive at the drop dead date for the property offered at that sale. Other
counties in the state may have held their sales on different dates, so we must
remember to recalculate the sale date for each county we want to research.
As we touched on earlier, Indiana, as well as most other tax lien states, issues
a deed some time after the redemption period ends, and this can be many
months after the redemption period. You will want to search your states code
to see if it allows for redemptions after the redemption period ends but before
the deed is issued. Indiana is strict in not allowing redemptions of any kind
after the redemption period ends. Washington DC allows redemptions after
the redemption period but before the deed is issued. If you find out that your
state allows redemptions after the redemption period, you will know that you
have additional time to work with an owner to buy their property, even after
the redemption period ends.
Ive researched Indiana, and Ive found court cases on Google that have upheld
that redemptions may not be made after the deadline, and judges are not able
to grant any kind of redemption extension.
You would do well to call a couple counties in your state and ask if theyve ever
heard of anyone being able to redeem properties after the deadline, even if
you dont find such a provision in your states code.
Tax Deed State Example
If youre going to work in a tax deed state, your homework on the statute
should be much easier. In most cases, the process is much simpler. The
delinquent property is placed on the tax deed sale list, and if the owner does
not get the property removed from the list by paying the taxes or taking
advantage of some other provision in the statute, and the property sells at the
sale, they lose the property. Therefore you will simply obtain the tax deed sale
list, and the date of the sale is the drop dead date.
One thing you will want to look for very carefully in the statute is a provision
that allows the owner to redeem the property after the deed is issued. Lets
look at Georgias statutes for an example of this.
Google Georgia Codes. The first item in the listings says Georgia
Unannotated Code General Assembly Search. Bingo.
Actually, this takes us to a search page. Ive had a hard time using search
boxes to find the codes, so Im going to look for the entire Georgia code. Its
right under Legislation -> Code of GA.
I see a heading for Revenue and Taxation, and when I click on that I see Tax
Sales right in chapter 4. Article 1 looks like a good place to start.
Article 1 (48-4-1) states that the property shall be sold in the same manner as
provided for in executions and judicial sales. Further, 48-4-6 states that the
validity of the deed shall be the same as that from an execution sale from a
superior court. So far, it sounds like the sale is final.
But when we keep reading on to Article 3, we see that 48-4-40 states:
Whenever any real property is sold under or by virtue of an execution issued for
the collection of state, county, municipal, or school taxes or for special
assessments, the defendant in fi. fa. or any person having any right, title, or
interest in or lien upon such property may redeem the property from the sale
by the payment of the redemption price or the amount required for
redemption, as fixed and provided in Code Section 48-4-42:
(1) At any time within 12 months from the date of the sale; and
(2) At any time after the sale until the right to redeem is foreclosed by the
giving of the notice provided for in Code Section 48-4-45.
So we see that there is actually a redemption period of 12 months, and
possibly more if the giving of notice in part 2 is not done immediately after the
12 month period.
Finally, we see in 48-4-43 that:
When property has been redeemed, the effect of the redemption shall be to
put the title conveyed by the tax sale back into the defendant in fi. fa., subject
to all liens existing at the time of the tax sale
So even though Georgia issues tax deeds at the sale, you will add one year to
the sale date to come up with the drop dead date, and if someone contacts
you immediately after the one year redemption, you could see if there was still
a chance to redeem due to the notice not being sent yet.
Other Ideas to Research Your State
Reading your states code is the best place to start when researching your
state. But sometimes the code is a little tricky to translate into practice.
Consider these additional resources and ideas:
Pose as a tax sale buyer, and look for print and website information in your
state that explains the tax sale to prospective tax sale buyers. Tell the tax clerk
youre considering investing in the next tax sale and ask if I buy a tax lien at
this tax sale, when is the owners absolute last chance to pay me off?. Or if
youre in a deed state: If I buy a deed at this sale, is there any way the owner
can still pay the taxes off at a later date and cancel my deed?. The tax clerk is
used to answering tax sale buyers questions and should be able to explain to
you when you can be assured you would be able to get a deed to the property
if you were to buy at the tax sale. Then you will know the drop dead date for
an owner.
Taxsalelists.com sells state manuals for tax sale buyers for many states. These
are excellent and explain many details that may not be covered explicitly in
state tax sale statutes. You should be able to determine when an owner
actually permanently loses their property from the information in these
manuals, and learn some interesting details in the process.
At this point, weve done our homework and we know when an owner loses his
property after it enters the tax sale process. The next step is to find out who is on
the verge of losing their property.
Chapter 2
Obtaining or Making a List of Properties Subject to Loss at Tax Sale
Now that weve figured out how to determine a drop dead date for our state, we
need to obtain or make a list of properties and owner names/addresses that are
at risk to be lost at tax sale.
By now, you have determined if youre working in a state with absolute auctions
(tax deed state) or a state that allows redemptions after the sale (redeemable tax
deed or tax lien).
Most, if not all, states have a liberal public records access law. These laws
generally allow for all records held by counties to be inspected and copied by the
public. There are exceptions for private information such as medical records,
social security numbers, and the like, but these dont concern us.
You may want to Google your state code and read its public information access
statute. Ive run into quirks with these too. South Carolina, for example,
prohibits release of any record for the purpose of marketing or selling a consumer
product or service. You would have to be prepared to carefully explain that you
are not marketing a product or service but actually offering to buy property, and
not subject to the law. You will also want to be familiar with the public records
statute if county officials give you trouble with your requests. More on that later.
Tax sale records are most certainly public and obtainable. Well start with the
easiest type of record, those from tax deed states.
Tax Deed States
You will have absolutely no problem obtaining sale lists in states with tax deed
sales. This is because the counties in the state have to make the list easily
obtainable for bidders who want to attend the sale to buy property. A good
portion of counties in these states publish the lists online free. Florida, for
example is especially good in this area. If you do a Google search for [florida
county name] florida tax deed you will easily find sale lists online in nearly every
county. Most even have direct links to the assessors page so you can check out
the property information. If youre working in a state with good online access like
this, youll go through the list and take down the property address, owner name
and address, and the amount of taxes owed. If you wish you can even take down
more information like assessed value which could give you a very rough estimate
of the propertys value.
You can also go to the county in person a month or two before the sale and
probably get a written list. Call the office that deals with tax-delinquent property
and ask when the list will come out for an upcoming sale.
Once again taxsalelists.com is a very valuable free resource when youre looking
into tax deed sale dates. Just log in and click on your state and you can see all the
counties having tax deed sales in the near future. If nothing else, its a great way
to quickly determine sale dates throughout your state. Though the site is geared
toward tax sale purchasers, you can purchase most lists inexpensively, already
typed into a spreadsheet. Consider how much time this might save you, if you
otherwise would have to manually transcribe or obtain the list in person. The site
also sells enhanced lists which contain detailed property information for each
property on the list, at a premium price. You may want to purchase these to
quickly sort properties by property value before you begin working on them.
Before you buy any lists on the site, however, see if your county has one free
online. Also, be aware that the site may not have an exhaustive list of sales in
your area. Call any counties youre interested in and see if the site might have
missed their list.
You can also go back in time up to two years on the site and see when previous
sales occurred to get an idea when the next sale might be coming up. Of course
these old tax deed sale lists are of no use to you because all of the properties
would have been lost or redeemed by now.
Tax Lien States
The process for making your list in a tax lien state is much different than simply
obtaining a list of properties about to be auctioned. A list for an upcoming
auction for tax liens will be way too new to use; we want a list from a past sale,
where the redemption deadline is approaching on the properties. We also want
to know which properties actually had enough value to sell at the sale.
Youve already determined the length of the redemption period for your state,
and youll want to go back to a sale that occurred in the past, slightly less time ago
than the redemption period. For example, if the redemption period in your state
is two years, youll want to look at a tax lien sale that occurred 12-23 months ago.
This way the owners who had a lien sold against their property have 1-12 months
left to redeem the property.
This will be more involved than working in a tax deed state, and may be the most
time-consuming part of the entire process. But it will be well worth it. Here are
some reasons why:
Because there is a tax lien sold against the property, this means that a tax
sale buyer thought the property was worth at least as much as he paid for
the lien, and probably much more. This automatically eliminates all of the
worthless properties that you would have encountered on a tax deed list.
A significant amount of time may have passed since the tax lien was sold,
and the property still has not been redeemed. This is a strong indicator
that the owner is unable to pay the taxes, or is not terribly interested in
saving the property. This makes the owner a good candidate to sell the
property to you.
Since you wait until near the redemption deadline, youll avoid wasting
your time with people who can and will ultimately redeem without you.
You will find much less competition DeedGrabbing here because hardly
anyone goes to the trouble of going through this multi-step process.
To get started, log onto taxsalelists.com and look at the past tax lien sale lists
from your county or elsewhere in the state. The default lookback period on the
site is 3 months; change the drop-down box setting to 2 years. Now look back to
some sales that, when you add the redemption period, are nearing maturity.
Take note of the dates and locations. If your redemption period is more than 2
years, youll have to find out the older sale dates at the office of the
governmental body who conducts the sale. Now youre ready to visit this office
and start putting your list together.
A Note on Governmental Employees at Your Tax Office
Im sure we all love governmental employees, but to some extent you may find
that some live up to their reputation as being bitter and uncooperative when you
request records. After all, youre asking them to do extra work for you that they
wouldnt have to do if you hadnt shown up.
Especially in larger counties where the employees may perceive themselves as
overworked, you could encounter resistance. If this happens and you have not
mastered your states public records access law, now is the time to do it. You
should find that your law provides for reasonable access to records, though you
may not be entitled to immediate access if the request is considered too
labor-intensive for the employee to carry out right then. You may only be able to
view records and write down the information you want. This makes it even more
likely that youll be the only one DeedGrabbing in this county.
You may be required to specify your request with exact particularity. In other
words, you may be forced to write on a form exactly what youre looking for, and
come back later to retrieve or view the records. Keep in mind that the records
youre about to request are not something the office may be used to providing.
Also, in most states the employees are not required to spend time compiling lists
for you that do not already exist. This is OK because when youre given access to
the right records youll make your own list.
Above all, try to be polite and explain what youre looking for nicely to the
employee, and be persistent. If you cant get anywhere, try going to another
nearby county and see how things are done there. Then youll be in a position to
better request what youre looking for in your home county.
Also keep in mind that the employees in the delinquent tax office may be verbally
assaulted daily by homeowners who are losing their properties, and the
employees may have dealt with scamsters in the past who have lied to
homeowners about the status of their properties and essentially stolen them
while there was still time to redeem them. This may make them wary to provide
you the records, but keep in mind that dishonest actions of others do not diminish
your rights to public records access.
Finally, if the clerk is completely uncooperative, make an appointment with the
head of the department or a superior, and have the public records law in hand.
Make them explain to you why you will not be given access to the records, and
report them to the state if they dont give you a good answer.
With my rant on tax sale clerks complete, Ill say that the vast majority of clerks
will give you access to what you want, and some will be very helpful. When you
encounter a helpful one, make sure to ask all of the questions you have about the
recordkeeping process. You can then use that knowledge at other counties.
What to Request
You simply want the sale results of the tax lien sale that occurred on your target
date. Some state statutes will specify where this information is recorded. For
example, Illinois statute says that all tax sale records are to be kept in the Tax
Sale Judgment Book, and that any redemptions are to be noted there as well. So
when I go to a county in Illinois, I simply ask for the Tax Sale Judgment book from
about 2 years ago (they have a 2 year redemption period), and I write down the
properties that sold back then without any note of a redemption. These will be
about six months from the end of the redemption period.
Indiana code also specifies what is to be kept in the way of records, for each tax
sale:
IC 6-1.1-25-8
Tax sale record
Sec. 8. Each county auditor shall maintain a tax sale record on the form
prescribed by the state board of accounts. The record shall
contain:
(1) a description of each parcel of real property:
(A) that is sold under IC 6-1.1-24;
(B) on which a county acquires a lien under IC 6-1.1-24-6; or
(C) for which a certificate of sale is purchased under IC 6-1.1-24;
(2) the name of the owner of the real property at the time of the:
(A) sale;
(B) lien acquisition; or
(C) certificate of sale purchase;
(3) the date of the:
(A) sale;
(4) the name and mailing address of the:
(A) purchaser of the property and the purchaser's assignee; or
(B) purchaser of the certificate of sale;
(5) the amount of the minimum bid;
(6) the amount for which the:
(A) real property; or
(B) certificate of sale;
is sold;
(7) the amount of any taxes paid by the:
(A) purchaser of the real property or the purchaser's assignee; or
and the date of the payment;
(8) the amount of any costs certified to the county auditor under section 2(e)
of this chapter and the date of the certification;
(9) the name of the person, if any, who redeems the property;
(10) the date of redemption;
(11) the amount for which the property is redeemed;
(12) the date a deed, if any, to the real property is executed; and
(13) the name of the grantee in the deed.
So in case of the state of Indiana, you see that you need to visit the auditor, who
is required to keep the records of each tax sale as shown above. As you can see,
everything you could possibly need to identify the property, sales price, and
owners name and address can be found in this record.
If youre unable to find such an easy recordkeeping system in your state, youre
not out of luck. The thing to remember is, the county must have had some record
at the time of the sale of what sold, and for how much. Your job is to find that
record. You may have to explain this concept to the clerk to get his or her juices
flowing. If youre fortunate, that same record will also show who has redeemed.
Youll be ignoring these redeemed properties and noting the properties that are
still active. At worst, youll have to check each property that sold individually to
see if it was redeemed. It may be labor intensive but the good thing is youll only
have to do it once for each sale.
Well talk later about contacting owners, but Ill say now that in certain
circumstances I spend a lot of time looking for a particular owner. If you decide to
do the same, youll want to keep the records you get current. This means
returning to the county with your list of unredeemed properties and crossing off
the ones that have redeemed since your last visit.
One failsafe method to get what you want, but possibly very time consuming, is to
buy the tax lien list for the past sale fromtaxsalelists.com, and check each
property at the county for a tax sale or redemption. Surely the county can tell
you if a specific property was sold, and whether it was redeemed. Only use this
method if you have hit a wall with the other methods above.
Here are the items you want to come away with on your list:
Owner name(s) and address
Property Address
Parcel/Key Number of Property (This is a tracking number the county uses)
Minimum Sale Price / Actual Sale Price
Most counties now have online property information. If you can obtain owner
name and address and property address online using the parcel number, you may
just want to jot down the parcel number and sale info and look up the owner
information at home. This is only if you cant get copies of complete tax sale
records like in the Indiana example below.
If you were able to get detailed printouts for each property, like I do in Indiana, be
sure to save these in a folder. If not, you will be able to get any additional
information you need later.
Indiana Example
In Appendix 2, Ive included a sample tax sale record from the SOLD folder in
Indiana. Note that is contains all of the information above, plus other good info
like legal description, tax buyer name, and sale number. Here the sale occurred
on 10/29/07, so the drop dead date is 10/29/2008.
Chapter 3
Enhancing and Editing Your List
Now you have a list of owner names and addresses, as well as property
addresses. One thing Ive noticed when locating tax sale owners is that a great
many of them have moved from the address the county has on file. Many times
youll see that the owner address is listed as the property address, even though
the property is abandoned.
Well want to enhance our list with updated owner addresses for each
owner. Technically this step is optional, but you will really find your best deals
with owners who have moved and never updated their address. This is a clear
indicator that they are not paying attention to the property and also that you may
be the first person letting them know about the tax sale of their property. This is
because they will not have been getting their notices or tax bills at the old
address.
If you havent done so already, the first thing you need to do is to type the
tax sale list information into an Excel spreadsheet. Make a separate heading for
Owner Name 1, 2, 3, and 4, as well as Owner Address, City, State, and Zip. Then
put any other information you collected in further rows:
OWN1 OWN2 OWN3 OWN4 ADDRESS CITY STATE ZIP Prop. Address Parcel Number
Dan Smith Dee Smith 123 Main St Anytown IN 99999 123 Elm St Gary IN 29387429387
Tim Miller 123 Maple St Anytown IN 99999 123 Birch St Gary IN 39248734993
Hopefully you were able to get your list in spreadsheet format to begin
with. If you decided to get an enhanced list fromwww.taxsalelists.com, or you
decided to get some additional information while researching at your county like
assessed value, now may be the time to edit your records a little bit. For instance,
if youre not interested in land, you may want to eliminate these records now.
You can also eliminate properties with low assessed value, or any other factor
that would lead you to believe that the property would not be something youd
like to buy.
Now were going to prepare the file to upload to a site which will update/add the
owner address and phone number for each record. The service we are about to
use charges 15 cents per successful record for the most economical choice, or 25
cents per record for the best available data. NOW IS NOT THE TIME TO SKIMP.
Get the best available data.
We are going to use www.w3data.com to update the list. Make a new
spreadsheet with the following headings:
First Name, Last Name | Address1 | City | State or Province | Zip or Postal Code
Then copy the data from Owner 1, Address, City, State, and Zip from your original
spreadsheet into this new spreadsheet. Insert a comma in between all owner
names to separate first and last name. Save as an Excel file or a .csv file. You can
choose the format when you save the file. Full instructions are available on the
site.
Now go to https://www.w3data.com/list-update/upload_file to upload your list.
You will get a spreadsheet back with any new addresses or phones. You can also
take all of the names from Owner 2, Owner 3, and Owner 4 and do the same
procedure to get updated addresses and phones for any additional owners.
What you will then do is make another file similar to the one you uploaded, only
WITHOUT the commas in the name. Then for any owners where a new address
came back, insert a new row, insert the name again, and insert the new address
you just got. You will use this later for mailing. This way when you mail to the
owners you will have multiple letters going out to some owners who show
multiple addresses.
Update your original spreadsheet with the phone numbers you get, and create a
column for returned mail. Youll be using this later.
At this point youre ahead of 90% of the investors out there who are sending only
mail to owner addresses on file with the county. Youve located new addresses
for the prospects most likely to hand their property over to you.
If you want to get into the top 1% of investors working out there, consider getting
a subscription to www.accurint.com. This is the premier skiptracing site out
there, and you can search on records one-by-one later, or do a similar batch
upload to them as you did here. Pricing is similar to www.w3data.com. However,
when youre searching for one particular person, its spectacular what you can do
on Accurint. You can find relatives, whether or not the owner is deceased, and a
host of other information.
The downside is that the application process for Accurint is very tedious. You
must have a business name with a business land line phone number established
for at least 3 months before youre eligible. You will really want to be
DeedGrabbing under a corporate name anyway, so if you dont have a
corporation established, do so now! Its cheap and can be done over the internet.
Then consider getting your existing land line transferred into your corporate
name or starting a corporate land line.
You can make money without access to Accurint, but it has made me thousands of
extra dollars over the last few years.
Now, lets get our letter written and send it out to all of the owners we have
located.
Chapter 4
Sending Mail to Tax Sale Owners
The steps in the previous chapter may have been tedious, especially if you are not
very computer literate or if your list contained many records. But your tongue
will thank you now, because you wont be licking any envelopes! I highly
recommend sending all of your letters through www.click2mail.com. This
company is associated with the US postal service, and will print your letter, merge
the names into each letter, stuff the envelope, and mail it for you within a couple
days. Or you can request that the letters be sent on a particular date in the
future. The charge for each letter is only a little over 60 cents each including
postage as of the time of this writing.
First, we need to write our letter. Personally, I dont think what the letter says is
really the difference between success and failure. You are basically letting them
know about the tax sale, asking if they have it taken care of, and expressing your
interest in possibly purchasing the property.
My letter goes like this:
Dear Owner:
Im writing to give you a heads up that a recent search we did at the County
courthouse showed that a property you own was sold at tax sale last year and not
redeemed as of the writing of this letter.
Do you have everything taken care of? If the property is not redeemed (taxes
paid) by the deadline shown above, a tax buyer will be able to apply for a tax deed
from the county and you will most likely lose your ownership in the property.
Were you unaware of the situation prior to receiving this letter? If so, feel free to
give me a call and Ill let you know whatever information I can.
If you have decided to just let the property go rather than paying the taxes, wed
be interested in taking over the property and giving you something for your time
in signing over the paperwork. Even if the property has liens or judgments, we
may be able to do something with the property and get it out of your name.
If youre trying to redeem the property so you can save it, we also may be able to
work something out with you so you can salvage some of your equity from the
property.
Please give me a call today if you have any questions or would like to discuss any
options we have to offer.
Sincerely,
Rick Dawson
Notice I do not refer to myself as The DeedGrabber here .
If you decide to use a version of this letter, you will need to tailor it to your states
tax sale rules so it is accurate and truthful. Never create a false deadline or try to
mislead the owner in your letter.
Also, try to give the owner several ways to contact you including cell phone and
email. Some owners will only try to reach you once and may not leave a message.
My philosophy when writing letters is to be as friendly as possible and to offer to
share information with the owner. This will often lead to a relationship that
results in a successful property purchase. Remember, many people getting this
letter will not even know about the tax sale on their property, and if you help
them get their arms around the situation they are facing, they will soon realize
that getting a little money out of a property that has been a hassle for years is the
best option.
DO NOT write a letter to the owner with big headlines proclaiming doom and
gloom and the severe consequences they are about to face. Most owners are not
stupid and do not need a letter to yell at them to get them to call. Try to arouse
their curiosity and they WILL call.
Other things to consider: If youre getting a lot of calls from people who want to
stay in the property, go ahead and add something like: Please note that we are
interested only in purchasing properties and are not able to make loans or other
workout arrangements with your past due taxes.
Get familiar with Click2Mail, and upload your letter and contact names. In
addition to inserting the owner name and address, I also like to insert the
property address somewhere in the letter and the drop dead date, so the owner
knows which property youre referring to. The site explains exactly what format
everything needs to be in, and it is not difficult to work with. Youll probably want
to write your letter on a word processor and upload it instead of writing it on the
site.
Make sure you have a valid return address on the system so you can get all of the
undeliverable letters. Well be using these later to avoid sending additional
undeliverable letters, and the letters you get back will indicate your very best
leads who are not getting their mail.
Now that your mail has gone out, you should start getting calls almost
immediately. Lets talk about what to say when an owner calls.
Chapter 5
Making a Deal with the Owner
After you field a number of phone calls from owners of tax sale property, youll
see that most of them fall into a few groups. Heres what to expect, and how to
deal with each. Keep in mind that you do not need to be an expert about
anything except how the tax sale works at this point. The owner will actually be
more comfortable with you if you fumble around a little bit and dont appear to
be an authority. Just make sure you dont tell them anything incorrect about how
the tax sale works.
Information Seeker:
The owner will call because you are the first to successfully get news of the tax
sale to him, or though he was aware of the tax sale, he hasnt explored the
situation much and wants some details.
You should explain how the tax sale works to him from the beginning, even if he
appears to have a rudimentary understanding of it already. I say Are you familiar
with how the tax sale works? No matter what he says to this question, I briefly
explain that due to unpaid property taxes, the county has sold a lien against the
property to an investor, and the investor is about to get the property on a certain
date. I do this mainly because it gives us something to talk about for a while and I
can start thinking about what else I want to say to him later. It will often lead the
owner to explain why the taxes werent paid and give you hints as to what kind of
deal you can offer later.
Dont be afraid to vilify the tax sale investor; this can help you build rapport with
the seller. Often the owner will end up WANTING you to have the property
instead of the evil tax sale investor that they believe caused the problem in the
first place. I dont bother to explain to the owner that the problem was actually
caused by their non-payment of the taxes.
The owner will often also express frustration that the county failed to update his
address when he moved. Again, sympathize with him and do not mention that
the countys job is not to track people down as they move around the country.
The owner may then want additional information such as the amount needed to
redeem the property. I always offer to get this information for them and call
them back.
Make sure to capture the owners phone number on your caller ID and make a
note of it, whether they ask for a call back or not. Make notes in your
spreadsheet about the conversation with the owner; you will want to call them
later if they have still not redeemed their property.
I cant overemphasize the benefits of being helpful to the owner. I once
contacted an owner with a property in tax sale, who hadnt updated his mailing
address when he moved. He had no problem redeeming the property, he just
wasnt aware of the sale. He later called me to offer to be a private investor in my
business and we have been working together since.
Letting the Property Go:
This owner will tell you during the course of the conversation that they dont have
the money to pay for the taxes, or have otherwise already planned to let the
property go. These are the owners were truly searching for.
If there is one thing you need to memorize, it is the following statement you will
make to an owner who has told you he is letting the property go:
Oh really? {PAUSE for 2 seconds} Well, if youre just going to let the property
go, Id like to see if I can do anything with it. Would it help if I got the property
out of your hair now, and gave you a couple hundred dollars for your time in
signing the paperwork?
You do not want to get the owner excited that they may be sitting on a valuable
property; they in fact may not be. You do not want to offer them $200 for their
property; this is insulting. You want to offer them $200 for their time in signing
over a property they were basically giving away anyway. There is an important
psychological difference.
The owner may have some questions at that point, or ask for more money. This is
fine, tentatively agree to anything reasonable pending your research. If you dont
know the answer to a question, just offer to call them back once you get the
answers. Do not make any promises to them at this point about taking care of the
taxes or paying mortgages, judgments, or any other liens against the property.
You will then want to ask the owner a little more about the property itself, and
whether it has any mortgages or liens against it. Once you have the information
the owner gives you, research the property as shown in Chapter 8. Then call the
owner back to set up the deal.
The initial call is not the time to explain all details to the owner, but rather an
initial information gathering session. There may be additional things you learn in
the research process that will affect how you will set up the deal anyway.
Wants to Sell the Property:
This owner is similar to the owner who is walking away, in that he definitely wants
to get rid of the property. If you talk to an owner for a while, and they do not say
that they are going to walk away from the property, just come out and ask them:
So what are you planning to do with the property, are you just going to let it
go?
This will establish some callers as walkaways, and you can go through the process
above. For those who say they dont know, or say they would like to sell the
property, ask them What do you need to walk away with after the taxes are paid
if you sell the property. If they hesitate to come up with a number, start asking
them more about the property: what repairs are needed, how they came to own
the property in the first place, etc. This should give you a rough idea of what
youre dealing with.
Assuming the owner comes up with a number, say Ill have to research it real
quick and get back to you. I have to be able to make some money on the
property, is that OK? {Wait for Reply} Do you think I would be able to make
something from it if I bought it from you at that price?
If the property appears to be a vacant, run down property that is not in a great
area, ask him Would walking away with a few grand help? Many will say yes,
and the rest will usually come up with a more realistic number. Then you can
hang up and research the property a little more.
Wants to Stay in the Property:
Unless you are an experienced investor who has worked with people in the past
who want to stay in the property, or have invested in educational material that
explains the pitfalls of allowing owners to stay in properties and buy back from
you later, I would not work a deal under these circumstances. Many states have
strict laws that regulate such transactions, and you could potentially have a long
struggle in court with this owner later. I tell such an owner that I am not a lender,
and I cant help them raise money to pay their taxes. I ask if they have tried to
borrow money from friends or family. Ask if they would consider selling and
moving if the deadline approached and it was their only choice. See if they would
like to set this option up as a backup plan in case they cant raise the money to
save their property.
Others:
Some owners will proudly call to let you know they have redeemed since you did
your research, or tell you that they have things taken care of. I usually delete
these owners from my spreadsheet unless I think theyre lying.
Other owners will call to yell at you or take their frustrations out on you. Privacy
freaks may call and want to know how you found out about the tax sale. Just say
its in the public record. Others will want to know how you tracked them to their
new location or got their phone number. I found you on the internet usually
takes care of that question. Dont worry, these callers are rare. If they persist in
their animosity, have some fun with them; you wont be doing a deal with them
anyway and it will help you laugh it off.
One frequent question I get at the beginning of any call is, Who are you, whats
your interest in all of this? I simply respond that Im not with the county, and Im
not the person trying to get their property at tax sale. I am a real estate investor
looking to pick up unwanted properties that are about to be lost at tax sale.
No matter what kind of caller you get, your goal is very simple:
1. Inform the owner of the tax sale
2. Confirm they understand the tax sale and see what their plans are
3. Set up a deal to either get unwanted property for a couple hundred dollars
or establish a price for properties that the owner perceives as valuable.
4. Get a little more information on properties that an owner might sell you.
5. Get off the phone with people quickly who do not want to sell.
Property Information You Need From the Call
Most owners will be more than happy to discuss details about the property. Here
are the things you will definitely want to make sure you find out at some point,
before you hang up with the owner:
1. What general shape the property is in (details not necessary at this point)
2. What liens/judgments/mortgages the owner is aware of against the
property
3. If there are multiple owners, whether all owners will agree to the sale and
sign off
That is it! With the information on your list and the additional information you got
from the owner, you are now ready to research the property. Before we cover
researching the property in Chapter 8, lets get proactive and look at other ways
to locate and contact owners who have not responded to your mailings.
Chapter 6
Taking the Bull by the Horns: Contacting Owners by Phone and in
Person
You should get a good call-in response rate to your mailings, but you will probably
get a significant portion of your letters returned undeliverable. If mailing is all
you do, you will get some deals if you mail to enough owners.
Looking back at the best deals I have done, however, I would say that close to half
have been the result of my calling the owner. Calling may sound scary at first, and
I was not looking forward to it when I first started DeedGrabbing. I had tried
calling owners in mortgage foreclosure before and had found that dozens of other
people as well as bill collectors had been calling the same owners. This made
calling an unpleasant experience.
However, youll find that far fewer, or no, investors are calling these tax sale
leads. Also, most of the owners you call will not be in a dire financial condition
unlike those undergoing a mortgage foreclosure. So, theyre much friendlier to
talk to. Many of the people you call will thank you profusely for letting them
know about the tax sale; without you they wouldnt have known about the tax
sale and would have lost the property.
You have some phone numbers from your download from w3data which we
covered in a previous chapter. Work on the returned mail you get back first.
So what do you say to the owner when you call? This is another line worth
memorizing:
Hi, this is Rick Dawson calling. May I speak to {owner name} or whoever is
handling the property at {Property address}?
Im just calling to give you a heads up that property you own over on Main Street
is going to be lost to a tax sale on {date}, and see if youd be interested in doing
something with it before its lost.
Then shut up and listen. By the way, dont forget to add the part about whoever
is handling the property; a good portion of the owners youre trying to contact
are dead and it is not a good way to start a conversation by asking directly for a
dead relative.
The owner or relative may then ask you what interest you have in the property,
and you should respond as I told you in Chapter 5 youre an investor looking to
buy properties in the area.
For the most part, the call should then go much like an inbound call. Just keep in
mind that the owner may not have gotten your letter, and you may have to
explain more about why youre calling to get to the dealmaking stage. Youll have
to more clearly state that youd be interesting in acquiring the property since you
havent warmed them up with your letter.
At first, some calls may go a little bit shaky. However, theyll quickly become
second nature to you. I often train assistants to start making calls in 15 minutes
or so. When I first started, it helped for me to think of myself as an assistant
gathering information for my real estate investor boss. If I didnt know how to
respond to something, I would just get the answers and call back. Call a few of
the worse-sounding leads first to get some practice and confidence.
Remember, youre really looking for walkaways and people who are eager to sell.
Therefore, you dont have to be prepared with a bunch of complicated
dealmaking strategies. If a situation seems too difficult, move on to another call.
Youll find people who simply want to sell or give you their property, and these
will understand where youre coming from immediately when they get your call.
Any time youre dealing with someone on the phone, try to speak slowly, and in a
friendly voice. Once again, you will connect with the owner better if they are not
threatened by you. One of my assistants works from home making calls for me,
and her child is sometimes making noise in the background when she makes calls.
She has told me that she has gotten sympathy from people she calls, for having to
deal with her child while working.
This is a person-to-person call, not a business-to-person call. Dont think of
yourself as a telemarketer. In fact, since youre calling to offer to buy something,
you should not be subject to no-call lists.
Put yourself in an owners shoes. Would you rather receive a call from a small
investor poking around with some tax sale properties they found out about, or
from a go-getter expert that is going to try to trick or pressure you? Dont try to
be something youre not. Just be yourself. Dont talk about your company name
or all the deals youre doing. Have a laugh or two and sympathize with all the
problems the owner may tell you about. It works wonders and makes calling a lot
more fun.
Door Knocking
If you have done everything you can to contact the owner by mail and phone, and
the owner lives in your area, you may want to consider knocking on the owners
door and using the same approach you do on the phone. Some owners who are
having financial problems do not have a phone, or change their number so much
you cant find a good number for them. They also may not read unknown mail, so
your message doesnt come across. Sometimes you just have to get in front of
them to get the ball rolling.
Make sure their home is not in a dangerous location, and back way off the front
door when you knock. Then just use the same script you do on the phone when
someone answers.
I usually only door knock when Im sure I have located the owner and the
property looks like it has a lot of potential equity. It can really be a waste of time
driving around looking for owners when you cant reach any at home, though if
you leave a handwritten note on their door youll get a pretty decent rate of
callbacks, especially if the deadline is approaching. Arouse their curiosity with the
note; write something like Dear Owner, There is an important situation over at
{property address} Id like to discuss with you right away, please call me.
Rather than spending a lot of time driving around, I suggest you get more leads
after you exhaust your first list, perhaps in other counties, and again contact by
phone. Its a lot more efficient.
Chapter 7
Structuring Your Offers
From your initial talk with the owner, you hopefully will have gotten some
valuable information about the property; whether it is abandoned, whether it has
piles of liens or judgments, and whether the owner is willing to basically give it to
you to get it out of their hair.
Lets first talk about taking property subject-to taxes and other liens.
Its a common misperception amongst beginners and even experienced investors
that you can only get a deed to property that has all encumbrances (liens, taxes,
mortgages, etc.) paid in full. The fact is, you can get a deed to any property at any
time, regardless of whether there are liens or mortgages against it.
Another concern is that if an investor gets a deed to property that has mortgages
or liens, that the investor will now become responsible for payment of these
items. This is not true as long as you make no such promises to the owner and
document this in your purchase agreement.
When an owner indicates that there are liens or mortgages against the property,
immediately tell them that though you hope to be able to do something with the
property and get all issues resolved, you cannot promise that any liens, taxes, or
mortgages will be paid off. But make sure they realize that they will be in no
better position if they do nothing. At least if you can do something with the
property (resell it!) you might take care of some debts against the property in the
process and the owner will be better off for it.
With all of this said, keep this in mind: you never want to RECORD a deed that
you have gotten until you have received a title report to the property. If the city
is chasing the owner to clean up the property, or there are other problems with
the property such as environmental cleanup issues, you do not want to be the
record owner of that property until you can be sure that these problems do not
exist, or are fixable. If you record a deed to a property, and the city continues
action against the property for cleanup or other problems, you could become
responsible for all of these future complaints.
You should also be doing business under a corporate name so that if you do get
pinched by a lien that is placed on the property after you take ownership, you will
not be personally liable for any debts associated with it.
You should use a standard purchase agreement for all deals. Any time youre are
getting a property for a few hundred dollars, and are not going to run a title
report first, you will be sending the entire paperwork package out at once (more
in Chapter 9). Put the following in your Purchase Agreement:
This agreement is subject to Buyer approval of title report and Property condition.
At this time Buyer is relying on Seller representation of property condition and
status of title. Should Buyer determine that Property is not suitable for acquisition
due to title issues, property condition, or any other reason, Buyer will destroy the
attached deed to Property, and this contract will be cancelled. Seller shall then
retain the purchase price paid by Buyer as full consideration of cancellation of
agreement. Regardless of whether Buyer elects to record deed or cancel this
agreement, Seller understands that Buyer has not promised to pay any associated
taxes, liens, or mortgages against property, and may elect not to do so until a
suitable third party purchaser is found for Property. Both parties agree that Buyer
is purchasing property in as-is condition, and Seller makes no warranty as to
property or title condition.
Basically what youre saying here, is that you are going to roll the dice and go
with what the owner has told you, and that if you find anything that you dont like
about the deal, you can cancel the agreement for the amount you just paid the
owner. Ive almost never had an owner object to this. Again, this is only in a
situation where the owner is giving you the deed for an amount you can afford to
lose. I never pay more than $500 for a property without a title report, and usually
not more than $200.
If the owner wants a more substantial amount of money for the property, you
should have the owner sign a purchase agreement immediately, but you will need
to order a title report before you send the deed for the owner to sign and pay for
the property.
You should still put a similar clause in your contract in case there is trouble later:
Buyer has received a preliminary title report on Property and has found the
following encumbrances:
List Here
Should Buyer determine that Property is not suitable for acquisition because of
title encumbrances listed above or other encumbrances that Buyer may discover
after this Agreement, or should Buyer discover adverse property conditions, Buyer
will destroy the attached deed to Property, and this contract will be cancelled.
Seller shall then retain the purchase price paid by Buyer as full consideration of
cancellation of agreement. Regardless of whether Buyer elects to record deed or
cancel this agreement, Seller understands that Buyer has not promised to pay any
associated taxes, liens, or mortgages against property, and may elect not to do so
until a suitable third party purchaser is found for Property. Both parties agree
that Buyer is purchasing property in as-is condition, and Seller makes no warranty
as to property or title condition.
You always want to give yourself an out on any contract, and to document that
you have agreed with the owner that you are not committing yourself to any
course of action with the property. If you are paying real money for the property,
you should have already determined that there is a very good chance you will be
reselling it for a profit, but you still want to keep your options open in case of
unexpected problems.
Regardless of whether you have agreed to get the deed for a couple hundred
bucks, or have agreed to pay a more substantial price for the property, you should
research it first to the best of your ability. There is no reason to waste any money
whatsoever, even on postage, if there are dealkillers you can discover first.
Chapter 8
Researching Properties Before Purchase
Most investors research properties first and then make contact with owners to
make an offer. If you think about it, this is a huge waste of time. Why not see
who shakes out as an interested seller, and only then spend time researching the
underlying property?
By now, you have either made contact with a walkaway owner who was going
to let the property go, or an owner who wants to sell at a discounted price. The
first seller is basically giving the property away. The latter seller wants a more
substantial amount of money but has indicated that its OK for you to make some
money on the property and that he believes you can do so at the price youve
agreed on.
Start out by adding up everything that will have to be paid, that you know of, in
the event you resell the property. This includes back taxes, liens, mortgages, a
Realtor fee of at least $2000, and the purchase price youre about to pay to the
owner. Realize that property taxes are billed in arrears, and that there will
probably be a year or more of additional taxes to pay when you resell, above and
beyond the amount you will pay to redeem the property.
Most counties have property information available online. Go to the property
information site for your county and use the parcel number to pull up the
property. Try to figure out how much the yearly taxes are on the property, and
get an idea of square footage and assessed value from the site. The assessed
value will not accurately reflect the propertys value in most cases but is useful to
get in the ballpark. Now youre ready to start screening the property.
Most properties you acquire will be in bad shape. Therefore, you will be looking
at the cheapest properties for sale in that zip code as your comparables. This will
not necessarily establish a value for the property you are about to buy; it will
simply indicate the maximum amount you should plan on selling the property for.
The easiest thing to do to screen a property is to go to Realtor.com and type in
the property zip code into the search screen on the home page. Start on page
one and get a feel for what the cheapest properties in that zip code go for. Use
properties similar in size to the one youre about to buy, and ignore properties
with fire damage or other severe problems.
If you received a similar amount to the lower-priced properties in the area, would
you make some money after you deducted the expenses listed above? This is a
good sign that you may have a deal.
One thing to watch out for: If you see dozens of houses in the price range you
have determined for the subject property, these can be other foreclosures that
you will be competing against. You must be able to lower your sales price to
become the cheapest in the market, and still make a profit, if you need to.
Next, see if you can research liens and mortgages recorded against the property
youre about to buy. Many counties also have online recording information, or at
least a terminal at the courthouse to search an owners name for recorded items.
See if you can find any liens or mortgages that the owner was not aware of, or
neglected to tell you about. Make sure these liens or mortgages are against the
subject property and not another property he owns. If you find some items that
are unexpected, call the owner back and ask about them. In some cases the
owner has already taken care of the issues but hasnt filed a release. You can
usually easily obtain the appropriate releases you need if the problem has already
been cleared up and this wont affect your deal.
If everything looks good at this point, I will usually move forward on a cheapo
$200 deal. If not, I dont waste my $200 for the deed, and call the owner back to
let him know what I found. If there is not a satisfactory explanation and solution
to the problem, I move on.
For deals with a more substantial purchase price, I then send out an appropriate
purchase agreement for the owner to sign. Make sure to use the language I
showed you in the previous chapter, and review the chapter coming up on
paperwork. If its an exciting deal, or on a tight deadline, I even send a mobile
notary to get the purchase agreement signed so I know I will get it back in a few
days.
Once I get the purchase agreement back, I order a title report. Use the phone
book or an online search to find title companies in the county where the property
is located. Explain to them that you want to order a simple title search on the
property, not a title commitment. This simple search will usually be under $200,
unlike a title commitment which can be $350 or more. Be sure to ask what the
turnaround time will be, and if it is more than a few days, call more title
companies and see if you can get one faster. Once you have ordered the title
report, stay on top of the title company if it does not arrive in the indicated time.
After you get the title report, read it carefully several times. First it should list the
owner(s) you are dealing with as the titleholder. If there are additional names on
the title you were not expecting, you will need to call the owner you talked to and
make sure you can get all additional owners to sign.
Second, it should have a section where liens, mortgages, and taxes are listed.
Read each item carefully and bring up any unexpected liens with the owner. You
can usually negotiate a lower purchase price to make up for any liens the owner
was not expecting.
If there are any liens or other encumbrances against the property at all, whether
you were expecting them or not, you should call back the title company and ask
for the title examiner. Ask the title examiner what they will need in order to
remove those exceptions from the title report, and how to get this
documentation. In many cases it simply involves getting a payoff from the
lienholder and paying the lien off only if you resell the property. Dont tie up your
cash paying these off now when you can just use your buyers funds to do so
later, unless the lien has the potential to blow up on you later. Of course, you will
need to pay the taxes owed on the property by the drop dead date if you want to
avoid losing the property yourself. Call the tax office if you havent done so
already to get a redemption amount and redemption deadline for the property.
At this point you have researched a conservative value for the property, received
a title report, and learned what will need to be obtained or done to remove any
liens against the property. You have gotten payoff amounts for all liens and
renegotiated with the owner in the event unexpected liens showed up on the title
report.
You should now look ahead to what will happen if the property does not sell by
the tax sale deadline. You should probably have enough additional cash available
to redeem the property unless youre willing to lose the sales price you are going
to pay to the seller.
If youre going to pay a significant amount for the deed to the property, visit or
call a Realtor and get a list of comparable properties that have SOLD recently, not
just a listing of the properties that are for sale now on the Realtor website. Also
look at the time it took for the properties to sell. Assume the worst when you
sell, and if you can still make a potential profit of $10,000 or several times your
investment, you should consider moving forward.
One thing Ive learned the hard way is that it is best to avoid investing any real
money on marginal deals. If the market for your properties is crowded with other
foreclosures in your price range, and youre only going to make a few thousand
on the property, its best to pass unless you can get a deed for under $200. Youll
know when you have a killer deal on your hands when you have a few hundred or
a few thousand invested and you stand to make $20,000-$50,000. If you know
your market very well, or you have other exit plans for the property in the event it
does not sell as expected, you may want to continue on a deal with an expected
profit of $5,000 or less.
One technique you may want to try, is to run an ghost ad in your local newspaper
that says Handyman Special Cheap, Cash. Call Rick 219-555-5555. When you
get calls from this ad, tell the caller that you have already sold the property but
youd like to call them with other properties you will be getting soon. Take down
their information. Then when you have a deal in the future, you can sometimes
get a buyer lined up from this list before you even get the deed to the property.
This eliminates all doubt that youll be able to resell for a profit.
Some Real-Life Examples
Ill share with you some successful and faulty property research examples from
my past.
Example 1: Terre Haute, IN
I contacted the seller and was told that she was going to let the property go. I
asked if it would help to get $200 for the deed to the property since she was
letting it go, and she agreed. I asked if there were any mortgages or liens against
the property, and was told that it was clear as far as she knew except for the
taxes. I asked how bad the repairs on the property would be. She replied that it
needed extensive fixup and remodeling, but that the roof was not leaking and the
structure of the property was good. This told me that the property would sell at
the bottom of the market and that I would definitely need to look at the least
expensive properties for sale for an indicator of possible sale price.
I called the tax office and learned that about $5000 in taxes would need to be
paid to redeem the property, with a deadline one month in the future.
I then got on the Realtor.com website and found that there were a few badly
damaged properties available in the area starting at $8000, and a few dozen
foreclosures in the $10,000 - $20,000 range that approximately matched the
subject propertys condition.
I decided that this would be worth the risk of $200, and sent out the paperwork,
including the deed and the $200 money order. After I got the paperwork back, I
got on the Realtor.com site again and found a few Realtors who were listing
foreclosures in the area. I contacted one who immediately got the property on
the market. The Realtor assured me that the property should sell for close to
$20,000. I should have made her produce comps to show what had sold recently,
but I went with her recommendation to list for $20,000.
A month went by and we had no showings. I decided to redeem the property to
keep from losing it, and sent the tax office a check for $5,000 after I ran a title
report to make sure there were no other liens (the title report was clean).
Months went by, and I finally forced the Realtor to price the property to sell.
After almost a year I got an offer for $9,000 and closed. My profit after tax
redemption, closing costs, additional taxes, etc. was less than $2,000.
Lessons Learned:
1. Do not expect to quickly sell a property that has dozens of foreclosures
competing with it in the same price range, even if your property is listed the
cheapest.
2. Do not allow a Realtor to overprice a property you want to sell quickly.
Unless they present compelling comparable sales that show your property
can sell quickly at a higher price than you estimated, stick to your guns on
the price you have estimated.
3. If you take a chance on a property like this (which I still would for $200),
resist the temptation to redeem the property if there is no indication of a
quick profitable sale. At the time I redeemed this property there had been
few showings and no offers.
4. Dont invest several times what you expect to make into a property.
Rather, plan to MAKE several times what you invest or cut your losses.
What I Should Have Done:
I was correct to take a risk a $200 risk on the property even though the market
was crowded and the property needed repairs. However, I should have insisted
that the Realtor initially price the property for $12-$14,000 to be at the bottom of
the market. If there had been few showings and no offers by the time the tax
deadline arrived, I should have taken my $200 loss and moved on. In the end, the
effort and investment to make less than $2000 was not worth it.
Example 2: Muncie, Indiana
I contacted the owner, who had moved to California, and found that she was not
willing to let the property go for a couple hundred dollars because she had spent
a lot of money on it over the past few years, including new siding and roof. She
indicated that family had been living in the property until recently and that it was
in above-average shape. She also stated that there were no liens against the
property. She initially asked to come out of the deal with $7,000.
I got on Realtor.com and discovered that the property was located in a
neighborhood with asking prices of $7,000 - $30,000 on the low end. I contacted
a Realtor and asked her to snap some pictures of the property for me, and in
return I agreed to list the property with her if I bought it. When I got the pictures
back from the Realtor, I confirmed that the property looked great and did indeed
have the exterior work done that the seller had indicated.
However, I was facing the same market I had in Terre Haute: lots of foreclosures
in the price range I expected to sell in. After learning from the Terre Haute deal,
which had not yet sold at this point, I knew that I was not willing to have
$5000-$7000 invested in the property. However, because the house had some
nice work done on it, I felt I would risk up to $2000 to purchase the property. I let
the owner know what I had found in my research, and that the market was
crowded in the propertys price range. She eventually agreed to take $2000 for
the deed and we closed.
This time I had several months to market the property before I had to pay the
taxes of $3000 or let it go. We listed the property for $15,000 and got absolutely
no showings or offers.
As the deadline approached, we still had no buyer interest in the property and the
Terre Haute property remained unsold. I decided to cut my losses and let the
property go.
Lesson Learned:
1. Do not invest more than a few hundred dollars in a property in a crowded
market, unless there is a very high expected profit. I knew going in that I
would only make about $5000-$7000 on the property if it sold as expected
and yet I invested $2000 to buy the property.
What I Should Have Done:
I should have only done this deal if the seller was willing to sell for a few hundred
dollars. Instead I risked a substantial amount of money compared to the amount I
expected to make. At least I did not throw more good money after bad to
redeem the property.
By now I had finally gotten my education from The School of Hard Knocks. A
series of successful deals now followed.
Example 3: Elkhart, IN
Once again, I contacted an owner in California who owned a property he had
inherited in Elkhart, IN. In fact, it had been his childhood home.
This owner wanted to see it go to someone other than the tax sale investor, as he
felt that the tax sale investor had caused the impending loss of his property. He
indicated that the property needed loads of repairs, and that he had tried to sell it
by owner in the past and had no luck trying to handle things from California.
Most recently, some family members moved in and left it completely trashed.
I let him know that the tax amount owed was about $8,000, and that due to the
repairs I didnt know if I could offer him much for it. He didnt come up with a
price, so I asked him if $1000 would help. He said he could buy a nice memorial
for his parents at their gravesite, and at least that would be a somewhat positive
outcome to the whole experience.
Not knowing the market in Elkhart, I got on Realtor.com, and discovered that the
cheapest house on the market in the entire town was $29,900. The next highest
price was about $35,000, then $40,000. Most of the foreclosed houses seemed to
hover in the $40-60,000 price range. I contacted a Realtor who ran by the house
and indicated that he would market it for about $40,000, even considering the
extensive repairs needed.
I ordered a title report and found it was clear. I then sent a mobile notary to the
owner who got the paperwork signed, and I talked to the Realtor again. I
explained that I wanted to list the house for $29,900 despite his
recommendations. I was determined to sell the house in the 6 weeks I had left
before the tax deadline, without paying those taxes myself.
Because we priced it so low, we got many showings, and after a couple weeks I
got a cash offer for $22,000. I accepted that offer and made over $10,000 on the
property.
How I Used What I Learned:
I knew this would be a profitable deal because there was a large spread between
the cheapest property on the market and what I would have to recoup for taxes
and purchase price to the owner, so I acted quickly. I did not allow the Realtor to
price the property too high. I accepted an offer that resulted in a substantial
profit, even though I might have made more if I left it on the market longer. As a
result, I did not have to pay more money for taxes and I was able to concentrate
on other deals.
Example 4: Gary, IN
I contacted the owner and discovered that she had lived in the property for the
previous 30 years but had recently moved to a nearby government-sponsored
apartment. She indicated that she just couldnt keep up with the repairs,
including sewage coming in the basement, and would take $1000 for the deed
rather than nothing.
I did a title report, and it turned out that 2 of her daughters were on title as well.
Both agreed to sign off on the property so their mother could get some cash from
it. This property was in my home county so I asked for the keys to the property
and took a look.
The property was in surprisingly good condition. From experience I knew that
sewage coming up in the basement usually only indicated the need for a $100
sewer rodding from a plumber. I also had worked extensively in this
neighborhood before and knew that the property was in an exceptionally good
area relative to other nearby properties.
I called the tax office and discovered that only $2500 was needed to redeem, but
that the deadline was only a few days away.
I looked at comparable properties in the zip code, and found that they were
selling for $6,000 - $50,000. Many of the lower-priced properties were in poor
areas nearby. I got the deed and purchase agreement signed from the owner and
her daughters, and paid the taxes of $2500 the next day.
I listed the property for $30,000, and got limited showings. I then lowered the
price to $19,900 and almost immediately got a cash offer for $16,000. I closed on
the property shortly thereafter and made another easy $10,000.
I knew my area well, so I was willing to invest $3500 in the property because I
knew I could easily sell it for a good profit. If I was working in this area from out
of town, I probably would have passed on the property since I couldnt inspect it
and the comparables on Realtor.com indicated a possible low sales price. In
addition, I had a backup plan.
From inspecting the property, I felt it would sell quickly for the right price, and
that I could even rent the property for $700/month with a little bit of work if I had
to.
I also priced the property right for a quick sale and took an offer that would allow
for a good immediate profit, even if I might have made more by waiting.
Example 5: St. Augustine, FL
By now I had also begun experimenting with working in other states. I realized
that since I had learned how to investigate properties a few hundred miles away
in my state, I could work deals anywhere in the country using the same method. I
looked into a few different states to try, and I noticed that Florida had excellent
online access to tax deed sale dates and lists, as well as excellent access to
property information online.
I sent some mailers out to St. Johns county prior to their tax deed sale, and I got a
call from a gentleman who was living in the property that his mother, now
deceased, once owned. He had a life estate in the property, and his several
brothers and sisters were on title as the owners (a life estate means that though
you dont technically own the property, you have the right to occupy the property
for life). The property needed some repairs, and the gentleman was ready to
move out. He was looking for some cash, and he indicated his brothers and
sisters would be interested in signing off as well if they could get some cash.
I called the county and discovered that taxes in the amount of about $16,000
would have to be paid in a few weeks in order to get the property out of the tax
deed sale. I also got online and saw that the assessed value of the property was
$89,000 (in Florida these values are often the low end of true market value). I got
on Realtor.com and found that the lowest-priced property available in town at
the time was $99,000. From the information he had given me, I figured that
actual selling price would be closer to $130,000.
I ran a title report and found no liens. Since I hadnt dealt with a life estate
before, I asked what would need to be done to clear it up, and title company told
me that the brother living in the property would just need to sign a deed as well
as the others.
Since this was a new market for me, and was very far away, I figured that I would
be OK if I invested $10,000 to purchase the property and paid the $16,000 in
taxes. I called the owners back and offered $2000 each to sell the property and
they agreed that something was better than nothing.
I had an additional problem: all the owners were scattered throughout the
country, and were not willing to attend a closing in Florida since they were only
receiving $2000 each. I ended up sending a mobile notary to each one, at the
exact same time, and waited until each mobile notary called me to say the signing
was a success. Then I called each notary back and told them they were able to
disburse the $2000 check I had sent for each owner. I then sent a check to the tax
office to redeem the property because I didnt think I could sell by the deadline.
We found a Realtor for the property, and when he visited the home it was in
worse condition than we expected. By now the market in Florida had cooled off
significantly, and he recommended listing the property for $119,000. The
property had a few showings but did not sell for a few weeks.
Eventually we lowered the price to $99,000 and got an offer for $79,000. We
accepted it and the profit on this deal was about $40,000 after all expenses,
subsequent taxes, commissions, and other closing costs.
I was working in a remote area, and did not know the market conditions. I also
knew I was going to have to invest a very significant amount of money to
purchase the property and pay the taxes, so I had to be very conservative on
value when I made my offer. I knew that the property was facing imminent loss
so I made a low offer to the owners, and since each owner was from out of town,
I knew they would probably take what they could get.
I also called the title company and had them walk me through what I needed to
get to obtain clear title. They prepared all the deeds I needed as well as Florida
transfer documents that were required. In some states it is customary to use a
attorney to prepare these documents. I would have asked for a recommendation
of a good attorney if that had been the case.
Even though I was disappointed with the eventual listing and sales price, I had
built a large cushion into my numbers to make sure I would show a profit even if
everything went badly. I walked away with a large check nevertheless by selling
the property for what the market would bear, even though I might have made
more by waiting for higher offers.
How Will You Get Started?
Now youve seen 5 examples of what to do, and what not to do. You should get
started doing some cheap, $200 walkaway deals until you have had some success,
and then you can move up to larger deals like the one outlined in Example 5.
No matter how small your initial budget, you can get a few deeds for as little as
$10, and roll the dice to see if you can sell before the tax sale deadline. You can
then use your profits from these to finance higher-investment deals and make as
much money as some people do all year, from one deal.
Chapter 9
Getting Your Paperwork Together
We got a little ahead of ourselves in the previous chapter when we discussed the
examples about property research. You will need to have a paperwork package
prepared in advance for your area if you want to be able to move quickly. If
youre trying out a new area, it may be OK to start marketing before you
understand how to put the paperwork together for the deal. Just be prepared to
hustle to get it together when a deal comes along.
For the state(s) youll be working most in, you should have templates for all of
your documents on your computer ready.
A common misperception among beginners is that the deed to a property is
something similar to a car title: you need to have a copy of it in order to transfer
it. This is not true; a deed is simply a document that you can generate from
scratch on your computer, using information from a title report or data from the
county. When it is recorded, it transfers the ownership of the property from the
owner to you. Most states also require additional transfer documentation
showing the purchase price paid, and some require tax stamps in order to transfer
a property.
The first step I always take when working in a new area is to call a local title
company and ask them whether it is customary for them, or an attorney, to
prepare most of the paperwork for their closings. In some states it is customary
for attorneys to attend every closing, and in other states an attorney does nothing
more than prepare deeds for closings or nothing at all unless he is retained by a
party to the transaction. Explain to the title company that you will be buying
properties and preparing your own paperwork, and see what transfer documents
will be needed along with the deed when you want to record it.
For your first deal, if you are a beginner, absolutely use an attorney to prepare
the deed and other documents for the transfer. Explain to the attorney that in
the future, you may have to prepare documents yourself, and you want to make
sure you have everything youll need to prepare these documents. Take a little
time to explain what youre doing to the attorney, and learn all you can about the
process. Then use the documents he prepares for you as templates for future
documents youll prepare yourself.
Any time there is a high expected profit or large investment required for a deal, I
always use an attorney if at all possible. It is not worth it to foul up a great deal
with bad paperwork.
Here is the deed template I use for every state:
Mail Tax Bills to: Parcel Number XXXXXXX
YOUR NAME
YOUR ADDRESS
YOUR CITY STATE ZIP
QUIT-CLAIM DEED
THIS QUITCLAIM DEED, is executed this ____ day of _________________, 2007 , by
{OWNER NAME(S)}
Hereinafter referred to as First Party, to
{BUYER NAME}
Hereinafter referred to as Second Party,
WITNESSETH, that the First Party, for and in consideration of the sum of $10.00 and other good and
valuable consideration in hand paid by the said Second Party, the receipt whereof is hereby
acknowledged, does hereby remise, release, and quit-claim unto the Second Party, all right, title,
interest, and claim which the First Party has in and to the following described lot, piece, or parcel of
land situate, lying and being in the County of {COUNTY NAME} , State of {STATE NAME}, to wit:
{LEGAL DESCRIPTION}
Also known as street and number {PROPERTY ADDRESS}
TO HAVE AND TO HOLD the same, together with all and singular the appurtenances thereunto, of all
interest, equity, and claim whatsoever the First Party may have, either in law or equity, for the proper
use, benefit, and behalf of the Second Party forever.
IN WITNESS WHEREOF, the First Party has signed and sealed these presents the day and year first above
written,
__________________________________
{OWNER NAME(S) PRINTED}
STATE OF {STATE} )
)ss:
COUNTY OF {COUNTY} )
On ___________________, 200_____, before me, {NOTARY NAME}, a notary public in and for said state
personally appeared {OWNER NAME}, personally known to me(or proved to me based upon satisfactory
evidence) to be the person(s) whose names(s) are subscribed to the within instrument and
acknowledged the (s)he /they executed the same in his/her/their signature on the instrument the
person(s) or entity on behalf of which they acted executed the instrument.
Witness my hand and official seal
______________________________
NOTARY PUBLIC
My commission expires________________ [NOTARY SEAL]
This instrument was prepared by Richard Dawson.
Each state will have different requirements for the deed. Some states require the
full address of both seller and buyer to be listed after their name at the top.
Others require certain statements about the homestead status of the property.
My state, Indiana, requires me to put a statement at the end of the deed that I
have made sure not to include social security numbers on the document.
Your attorney will be able to show you all of the elements you will need to have in
the deed to make it recordable. If you want to research this prior to contacting
the attorney, take the template above to your local recorders office and ask them
what additional elements would be needed in this deed in order to record it. You
can also sometimes find guidelines for recording on your county recorders
website. You may also learn of additional transfer documents needed.
You will be able to get started DeedGrabbing by using an attorney to help you
draft your paperwork. However, I highly recommend continuing your education
in the legal aspects of paperwork preparation. Bill Bronchick has an exhaustive
course on the subject which I recommend you to get your hands on as soon as
youre able its available at http://www.legalwiz.com/realestatelawyer.
Additional Paperwork
You will need to back up your paperwork package with additional documentation.
At minimum, you will need to also have a purchase agreement signed by the
owner. I also like to document any special circumstances that I may have
negotiated with the owner. Always get an authorization from the owner to
inquire into any liens, mortgages, or other issues you may discover with the
property. The authorization I use is here:
AUTHORIZATION TO RELEASE INFORMATION
I hereby authorize you to release to Richard Dawson, any and all
information regarding property at ____________________, including, but not
limited to, mortgage information, insurance information, or any lien information.
Richard Dawson may reproduce this document to acquire reference from more
than one source.
Thank You
Signature SS# Date
Name of Mortgage Company:_________________________________
Account Number: __________________________________________
Phone#___________________________________________________
Name of Insurance Company:_________________________________
Policy #__________________________________________________
Phone#___________________________________________________
Keep in mind that after you have purchased a property for $200 and made over
$10,000 profit when you resold it, the owner may find out about your good
purchase and try to cause trouble for you. Therefore, I always add a Sellers
Acknowledgement page to my Purchase Agreement. Take a moment and read
Joe Kaisers free article on creonline.com discussing the subject. In the article, he
includes the Sellers acknowledgement that he uses, and I use it almost verbatim
as well.
Incidentally, creonline is an excellent free resource to use when youre trying to
learn about any aspect of real estate investing. You can even ask questions in the
online forum and almost always get a great response.
Here is the purchase agreement I use:
PURCHASE AGREEMENT
Date: {DATE} Purchaser agrees to buy real estate (the Property) known as {ADDRESS} in
{COUNTY} County, {CITY} , {STATE}, {ZIP} Zip Code, which is legally described as:
{LEGAL [or put see title report if not available]}
in accordance with the terms and conditions set forth below in this Purchase Agreement (the Agreement):
A. PURCHASE PRICE: ___{PRICE SPELLED OUT} ($_{PRICE IN NUMBER FORMAT}_____)
B. IMPROVEMENTS AND FIXTURES: The above price includes all improvements permanently installed and
Affixed, such as, but not limited to, electrical and/or gas fixtures, heating equipment and all attachments thereto,
gas grills, incinerators, windows shades, curtain rods, drapery poles and fixtures, awnings, TV antennas, all
landscaping, mailbox, garage door opener with control(s), ceiling fans, smoke alarms, mini barns/storage sheds,
satellite dish with control(s). The Property has been inspected and accepted by the Purchaser as is in its present
condition and shall be delivered in such present condition to Purchaser at the time of possession, free of all liens
and encumbrances except as otherwise provided herein. Acceptance of this Agreement by the Seller shall
constitute a warranty that all of the articles, fixtures, accessories and appliances above described are fully paid for
or will be fully paid for by the Seller prior to closing of the transaction.
C. METHOD OF PAYMENT: CASH: The entire purchase price shall be paid in cash, by certified or cashiers
check at the time of closing the transaction. No financing is required.
D. TIME FOR OBTAINING FINANCING: N/A
E. CLOSING DATE: Closing date shall be on or before {DATE OF CLOSING}
F. MISCELLANEOUS PROVISIONS: Conveyance of the property shall be by Quitclaim Deed, subject to all
special exceptions which will be contained in the title insurance policy, unless otherwise agreed to herein.
G. TITLE COMPANY FEES: Purchaser shall pay any closing fees
H. INDEPENDENT INSPECTIONS: No Inspection Required
I. TAXES, ASSESSMENTS, AND PRORATIONS: Purchaser to accept property subject-to all past due taxes, tax
certificates, and liens.
J. TITLE EVIDENCE: Purchaser shall provide own title evidence
K. SURVEY Purchaser shall not receive a mortgage survey at Sellers expense.
L. RISK OF LOSS: All risks of ownership and loss, whether by fire, vandalism, theft, casualty or otherwise,
shall belong to Seller until closing. In the event there are any damages to the Property prior to closing, Purchaser
shall have the right to complete the sale, at his sole option, and have the insurance proceeds assigned to him after
closing. If Purchaser declines in writing to close with assignment of insurance proceeds, Seller shall have the option
to cancel this agreement.
M. MAINTENANCE OF PROPERTY: Seller shall maintain the condition of the Property and related equipment
until possession thereof is delivered to Purchaser.
N. EXPIRATION AND APPROVAL: (Mark (x) in appropriate box.) This Agreement is void if not accepted in
writing on or before {DATE AND TIME}
O. TIME PERIODS: Time is of the essence, and time periods specified in this Agreement shall expire at
midnight on the date stated unless the parties agree in writing to a different date and /or time.
P.
FURTHER CONDITIONS: Purchaser is accepting property title and condition as-is with no warranties. Both parties
agree that if Purchaser is able to generate a profit from Property through resale or any other means, such profit is
justly earned and is the sole property of Purchaser. Both parties also agree that Seller will retain the purchase
price paid today regardless of whether Purchaser is able to make a profit from Property.
This agreement is subject to Buyer approval of title report and Property condition. At this time Buyer is
relying on Seller representation of property condition and status of title. Should Buyer determine that
Property is not suitable for acquisition due to title issues, property condition, or any other reason, Buyer
will destroy the attached deed to Property, and this contract will be cancelled. Seller shall then retain
the purchase price paid by Buyer as full consideration of cancellation of agreement. Regardless of
whether Buyer elects to record deed or cancel this agreement, Seller understands that Buyer has not
promised to pay any associated taxes, liens, or mortgages against property, and may elect not to do so
until a suitable third party purchaser is found for Property. Both parties agree that Buyer is purchasing
property in as-is condition, and Seller makes no warranty as to property or title condition.
____________ Seller _____________ Purchaser
By signature below the parties verify that they understand and approve this Purchase Agreement and acknowledge
receipt of a signed copy.
_____________________________________
{YOUR NAME}
RESPONSE TO PURCHASE AGREEMENT
The above terms and conditions are: ________Accepted ___________Rejected ______Countered
At ___________(time) ______/________/_______(date)
_______________________________________ ________________________________________
Sellers Signature Sellers Signature
_______________________________________ _________________________________________
PRINTED PRINTED
This purchase agreement is the one I use for all walkaway deals. Youll notice
that the Seller is not expected to pay for any type of title report, title insurance, or
anything else since theyre only receiving a small amount of money. However, we
make sure to point out that we are not committing ourselves to pay anything that
is outstanding against the property. We also make the Seller acknowledge that
we might make a profit on the property and that it is OK for us to do so.
The Actual Signing
With the paperwork package prepared, we are now ready to sign up the owner
and pay the amount we agreed for the deed.
I always use a mobile notary to visit the owner to have them sign the paperwork
and disburse the money order or check to the owner. You must make it as easy as
possible for the owner to complete the transaction; they will not jump through
hoops to complete the transaction when they are only receiving a small amount
of money.
To locate a mobile notary near the owner, visit www.123notary.com and do a zip
code search for the area the owner lives in. These notaries are mostly used to
doing loan closings. Many times they are expected to print out hundreds of
documents and spend hours with the client signing all of the documents. When
you call a notary, explain to them up front that you only have a few documents
that need to be signed and/or notarized, and that you will be sending the
documents to them overnight. Then ask for a quote. I very rarely pay more than
$75 for the notary service unless the notary has to travel a long distance to visit
the owner.
Once you have set a time with the owner and the notary to sign the documents,
prepare the documents and overnight them to the notary along with the notarys
fee and the check you will be giving the owner. Type up a quick set of instructions
for the notary including owners name, address, and phone number, a list of the
documents enclosed, and instructions to disburse the funds to the owner upon
successful signing of all documents. Also include your phone number and be sure
to be by the phone when the signing occurs in case there are any questions.
Include a prepaid overnight envelope with the package for the notary to send
back the signed paperwork. Also include unsigned copies of all documents for the
notary to leave with the owner.
I usually leave as little as possible for the notary and owner to fill in on the
paperwork. Dates and signatures are often the only thing the owner will be filling
out. Buy some of those SIGN HERE stickers an office store, and indicate where
everyone is to sign and date so there are no problems later.
Keep in mind that this may be your only chance to get the owner to sign anything
again, now that he has been paid. Go over the paperwork several times before
you send it to make sure there are no errors.
Finally, before you send the paperwork out, determine if you want the notary to
record the paperwork for you at the county. More on that later.
After You Receive the Paperwork Back
If you have not already ordered a title report because you got the deed for a
couple hundred bucks, order one now. Do not record the deed until you have a
title report and can be sure that all issues can be handled with the title. If you
record it now, you could set yourself up for being responsible for environmental
or city code issues. Youll be letting a new buyer handle those, and you want to
make sure that a buyer is lined up before you record anything with cleanup or
code issues.
Recording the Documents
If the title report is clear, or shows no indication of environmental or code issues,
you may want to record the deed now. Just keep in mind that you could be
responsible for anything that happens at the property, now that youre the
owner. It can be a good idea to get property insurance if youre worried about
liability issues. I usually just take title in a corporation with few other assets, and
take my chances on liability occurring.
For closings that occur in faraway areas, I usually ask the notary to record the
documents after the signing if Ive already received a satisfactory title report. This
is not something most notaries are used to doing, but if you provide explicit
instructions on how to do it, and remain by the phone to provide help, most will
do it for an extra fee. Call the clerk at the recorders office in advance, and have
the clerk walk you through the exact process for recording so you can provide this
information to the notary.
Chapter 10
Payday
Now you are the owner of a tax sale property that you have acquired for very
little money. There are dozens of ways to make money from real estate that you
own, and I cannot cover all of them here. You may choose to redeem the
property and rent it, sell it on contract to someone, or get in there and fix it up.
I have found that I make the most money with my time by putting these deals
together, not fiddling around with the property I acquire. Therefore I sell them
for cash using a Realtor.
During your research phase, you may have already gotten the assistance of a local
Realtor to establish a value and get other market information. Now is the time to
call them again and get the property listed. This is a relatively simple process; the
Realtor will mail or fax you the listing agreement, and once its signed the
property will be placed on the MLS and have some signage dropped off. You may
need to find a property maintenance company to change the locks on the
property and keep the yard mowed. If youve contacted a Realtor who deals with
foreclosures as I previously suggested, the Realtor should have the contacts you
need to maintain the property.
Be sure to carefully read the examples I gave in the research section about cutting
your losses. If you do not get a lot of interest in the property right away, drop the
price if you can. Should there be little interest in the property after the price
decrease, you may want to think about letting the property go and finding other
deals to work on.
When you get a contract on your property, be sure to go over it carefully with
your Realtor. Make sure that the buyer provides proof of funds or a mortgage
preapproval with your offer. Be wary of offers with a lot of unusual weasel
clauses in them (ways for the buyer to back out). An inspection contingency is
OK, but dont allow another real estate investor to tie up your property and
attempt to flip it for profit. Deal only with legitimate end-buyers who are going to
purchase the property themselves.
Be aware that if youre selling a property that is located far from you, you can set
up a remote closing where the documents will be overnighted or emailed to you.
You do not have to attend the closing in person. I usually have the title company
then wire the funds right to my account.
Conclusion
In my opinion, DeedGrabbing is by far the best way to get started in the real
estate business, yet it provides opportunities for advanced investors as well. Here
we have covered relatively simple transactions where you buy very low, and sell
low.
Once you have gotten some deals under your belt, youll be ready to start taking
on more complicated situations that youll encounter while DeedGrabbing. Here
are a few that will be covered in my Advanced DeedGrabber Toolkit, under
development now:
Making money with partial interests in property (buying out some, but not
all, owners of a property when you encounter a difficult seller)
Partnering with owners of property rather than buying them out upfront
Taking advantage of title issues to make additional profits
Using automated tools to do your research for you
Hiring assistants that can do 99% of the day-to-day work, including phone
work
Using online Filemaker databases to keep track of your leads, and share
real-time contact information between you and your assistant(s)
Becoming an expert dealing with inheritance and probate issues (youll
encounter lots of these!)
Securing your deals with documentation including audio and video taping
the client (actual video and audio of my closings and conversations
included)
And much more
I wont be holding anything back in the Advanced DeedGrabber Toolkit. Go ahead
and make some money flipping tax sale properties, and when youre ready to take
the next step, visit Deedgrabber.com to order your kit!
Please email any questions you have about this material, or deals your doing now,
to deedgrabber@gmail.com. Ill be happy to answer them to the best of my
ability, and will cover your issues in upcoming editions of this ebook and
DeedGrabber Toolkit.
Finally, whatever you do, dont let a lack of funds stop you from DeedGrabbing. I
have several funding sources I may be able to make available to you on high-profit
deals. Email me when you get a deal lined up and well go over it if you need
funding.
-Rick Dawson
The DeedGrabber
Appendix 1
Selections from the Tax Sale Statute Indiana
IC 6-1.1-24
Chapter 24. Sale of Real Property When Taxes or Special Assessments Become Delinquent
IC 6-1.1-24-1
Delinquent list
Sec. 1. (a) On or before July 1 of each year or fifty-one (51) days after the tax payment due
date, the county treasurer (or county executive, in the case of property described in subdivision
(2)) shall certify to the county auditor a list of real property on which any of the following exist:
(1) In the case of real property other than real property described in subdivision (2), any
property taxes or special assessments certified to the county auditor for collection by the county
treasurer from the prior year's spring installment or before are delinquent as determined under
IC 6-1.1-37-10.
(2) In the case of real property for which a county executive has certified to the county
auditor that the real property is:
(A) vacant; or
(B) abandoned;
any property taxes or special assessments from the prior year's fall installment or before that
are delinquent as determined under IC 6-1.1-37-10. The county executive must make a
certification under this subdivision not later than sixty-one (61) days before the earliest date on
which application for judgment and order for sale may be made.
(3) Any unpaid costs are due under section 2(b) of this chapter from a prior tax sale.
(b) The county auditor shall maintain a list of all real property eligible for sale. Unless the
taxpayer pays to the county treasurer the amounts in subsection (a), the taxpayer's property shall
remain on the list. The list must:
(1) describe the real property by parcel number and common address, if any;
(2) for a tract or item of real property with a single owner, indicate the name of the owner;
and
(3) for a tract or item with multiple owners, indicate the name of at least one (1) of the
owners.
(c) Except as otherwise provided in this chapter, the real property so listed is eligible for sale
in the manner prescribed in this chapter.
(d) Not later than fifteen (15) days after the date of the county treasurer's certification under
subsection (a), the county auditor shall mail by certified mail a copy of the list described in
subsection (b) to each mortgagee who requests from the county auditor by certified mail a copy
of the list. Failure of the county auditor to mail the list under this subsection does not invalidate
an otherwise valid sale.
IC 6-1.1-24-4.7
Judgment and order of sale; defense; form of judgment and order; jurisdiction; official
irregularities
Sec. 4.7. (a) No later than fifteen (15) days before the advertised date of the tax sale, the court
shall examine the list of tracts and real property as provided under section 4.6 of this chapter. No
later than three (3) days before the advertised date of the tax sale, the court shall enter judgment
for those taxes, special assessments, penalties, and costs that appear to be due. This judgment is
considered as a judgment against each tract or item of real property for each kind of tax, special
assessment, penalty, or cost included in it. The affidavit provided under section 4.6 of this
chapter is prima facie evidence of delinquency for purposes of proceedings under this section.
The court shall also direct the clerk to prepare and enter an order for the sale of those tracts and
real property against which judgment is entered.
(b) Not later than seven (7) days before the advertised date of the tax sale, the court shall
conduct a hearing. At the hearing, the court shall hear any defense offered by any person
interested in any of the tracts or items of real property to the entry of judgment against them, hear
and determine the matter in a summary manner, without pleadings, and enter its judgment. The
court shall enter a judgment under this subsection not later than three (3) days before the
advertised date of the tax sale. The objection must be in writing, and no person may offer any
defense unless the writing specifying the objection is accompanied by an original or a duplicate
tax receipt or other supporting documentation. At least seven (7) days before the date set for the
hearing, notice of the date, time, and place of the hearing shall be provided by the court to any
person filing a defense to the application for judgment and order of sale.
(c) If judgment is entered in favor of the respondent under these proceedings or if judgment is
not entered for any particular tract, part of a tract, or items of real property because of an
unresolved objection made under subsection (b), the court shall remove those tracts, parts of
tracts, or items of real property from the list of tracts and real property provided under section 4.6
of this chapter.
(d) A judgment and order for sale shall contain the final listing of affected properties and the
name of at least one (1) of the owners of each tract or item of real property, and shall
substantially follow this form:
"Whereas, notice has been given of the intended application for a judgment against these
tracts and real property, and no sufficient defense has been made or cause has been shown why
judgment should not be entered against these tracts for taxes, and real property special
assessments, penalties, and costs due and unpaid on them, therefore it is considered by the court
that judgment is hereby entered against the below listed tracts and real property in favor of the
state of Indiana for the amount of taxes, special assessments, penalties, and costs due severally on
them; and it is ordered by the court that the several tracts or items of real property be sold as the
law directs. Payments for taxes, special assessments, penalties, and costs made after this
judgment but before the sale shall reduce the judgment accordingly.".
(e) The order of the court constitutes the list of tracts and real property that shall be offered for
sale under section 5 of this chapter.
(f) The court that enters judgment under this section shall retain exclusive continuing
supervisory jurisdiction over all matters and claims relating to the tax sale.
(g) No error or informality in the proceedings of any of the officers connected with the
assessment, levying, or collection of the taxes that does not affect the substantial justice of the
tax itself shall invalidate or in any manner affect the tax or the assessment, levying, or collection
of the tax.
(h) Any irregularity, informality, omission, or defective act of one (1) or more officers
connected with the assessment or levying of the taxes may be, in the discretion of the court,
corrected, supplied, and made to conform to law by the court, or by the officer (in the presence of
the court).
IC 6-1.1-24-5
Conduct of sale; parcels subject to sale; minimum sale price; sale of vacant or abandoned
property; sale by electronic means
Sec. 5. (a) When a tract or an item of real property is subject to sale under this chapter, it must
be sold in compliance with this section.
(b) The sale must:
(1) be held at the times and place stated in the notice of sale; and
(2) not extend beyond one hundred seventy-one (171) days after the list containing the tract
or item of real property is certified to the county auditor.
(c) A tract or an item of real property may not be sold under this chapter to collect:
(1) delinquent personal property taxes; or
(2) taxes or special assessments which are chargeable to other real property.
(d) A tract or an item of real property may not be sold under this chapter if all the delinquent
taxes, penalties, and special assessments on the tract or an item of real property and the amount
prescribed by section 2(a)(3)(D) of this chapter, reflecting the costs incurred by the county due to
the sale, are paid before the time of sale.
(e) The county treasurer shall sell the tract or real property, subject to the right of redemption,
to the highest bidder at public auction. However, a tract or an item of real property may not be
sold for an amount which is less than the sum of:
(1) the delinquent taxes and special assessments on each tract or item of real property;
(2) the taxes and special assessments on each tract or item of real property that are due and
payable in the year of the sale, regardless of whether the taxes and special assessments are
delinquent;
(3) all penalties which are due on the delinquencies;
(4) the amount prescribed by section 2(a)(3)(D) of this chapter reflecting the costs incurred
by the county due to the sale;
(5) any unpaid costs which are due under section 2(b) of this chapter from a prior tax sale;
and
(6) other reasonable expenses of collection, including title search expenses, uniform
commercial code expenses, and reasonable attorney's fees incurred by the date of the sale.
(f) For purposes of the sale, it is not necessary for the county treasurer to first attempt to collect
the real property taxes or special assessments out of the personal property of the owner of the
tract or real property.
(g) The county auditor shall serve as the clerk of the sale.
(h) Real property certified to the county auditor under section 1(a)(2) of this chapter must be
offered for sale in a different phase of the tax sale or on a different day of the tax sale than the
phase or day during which other real property is offered for sale.
(i) The public auction required under subsection (e) may be conducted by electronic means, at
the option of the county treasurer. The electronic sale must comply with the other statutory
requirements of this section. If an electronic sale is conducted under this subsection, the county
treasurer shall provide access to the electronic sale by providing computer terminals open to the
public at a designated location. A county treasurer who elects to conduct an electronic sale may
receive electronic payments and establish rules necessary to secure the payments in a timely
fashion. The county treasurer may not add an additional cost of sale charge to a parcel for the
purpose of conducting the electronic sale.
IC 6-1.1-25-2
Amount required for redemption
Sec. 2. (a) The total amount of money required for the redemption of real property equals:
(1) the sum of the amounts prescribed in subsections (b) through (e); or
(2) the amount prescribed in subsection (f);
reduced by any amounts held in the name of the taxpayer or the purchaser in the tax sale surplus
fund.
(b) Except as provided in subsection (f), the total amount required for redemption includes:
(1) one hundred ten percent (110%) of the minimum bid for which the tract or real property
was offered at the time of sale, as required by IC 6-1.1-24-5, if the tract or item of real property is
redeemed not more than six (6) months after the date of sale; or
(2) one hundred fifteen percent (115%) of the minimum bid for which the tract or real
property was offered at the time of sale, as required by IC 6-1.1-24-5, if the tract or item of real
property is redeemed more than six (6) months but not more than one (1) year after the date of
sale.
(c) Except as provided in subsection (f), in addition to the amount required under subsection
(b), the total amount required for redemption includes the amount by which the purchase price
exceeds the minimum bid on the real property plus ten percent (10%) per annum on the amount
by which the purchase price exceeds the minimum bid on the property.
(d) Except as provided in subsection (f), in addition to the amount required under subsections
(b) and (c), the total amount required for redemption includes all taxes and special assessments
upon the property paid by the purchaser after the sale plus ten percent (10%) interest per annum
on those taxes and special assessments.
(e) Except as provided in subsection (f), in addition to the amounts required under subsections
(b), (c), and (d), the total amount required for redemption includes the following costs, if certified
before redemption and not earlier than thirty (30) days after the date of sale of the property being
redeemed by the payor to the county auditor on a form prescribed by the state board of accounts,
that were incurred and paid by the purchaser, the purchaser's assignee, or the county, before
redemption:
(1) The attorney's fees and costs of giving notice under section 4.5 of this chapter.
(2) The costs of a title search or of examining and updating the abstract of title for the tract
or item of real property.
(f) With respect to a tract or item of real property redeemed under section 4(c) of this chapter,
instead of the amounts stated in subsections (b) through (e), the total amount required for
redemption is the amount determined under IC 6-1.1-24-6.1(b)(4).
IC 6-1.1-25-4
Period for redemption; tax deed; limitations on expectation of tax deed; county auditor
removal of taxes from tax duplicate
Sec. 4. (a) The period for redemption of real property sold under IC 6-1.1-24 is:
(1) one (1) year after the date of sale;
(2) one hundred twenty (120) days after the date of sale to a purchasing agency qualified
under IC 36-7-17; or
(3) one hundred twenty (120) days after the date of sale of real property on the list prepared
under IC 6-1.1-24-1(a)(2) or IC 6-1.1-24-1.5.
(b) The period for redemption of real property:
(1) on which the county executive acquires a lien under IC 6-1.1-24-6; and
(2) for which the certificate of sale is not sold under IC 6-1.1-24-6.1;
is one hundred twenty (120) days after the date the county executive acquires the lien under
IC 6-1.1-24-6.
(c) The period for redemption of real property:
(1) on which the county executive acquires a lien under IC 6-1.1-24-6; and
(2) for which the certificate of sale is sold under IC 6-1.1-24;
is one hundred twenty (120) days after the date of sale of the certificate of sale under IC 6-1.1-24.
(d) When a deed for real property is executed under this chapter, the county auditor shall
cancel the certificate of sale and file the canceled certificate in the office of the county auditor. If
real property that appears on the list prepared under IC 6-1.1-24-1.5 is offered for sale and an
amount that is at least equal to the minimum sale price required under IC 6-1.1-24-5(e) is not
received, the county auditor shall issue a deed to the real property, subject to this chapter.
(e) When a deed is issued to a county executive under this chapter, the taxes and special
assessments for which the real property was offered for sale, and all subsequent taxes, special
assessments, interest, penalties, and cost of sale shall be removed from the tax duplicate in the
same manner that taxes are removed by certificate of error.
(f) A tax deed executed under this chapter vests in the grantee an estate in fee simple absolute,
free and clear of all liens and encumbrances created or suffered before or after the tax sale except
those liens granted priority under federal law and the lien of the state or a political subdivision
for taxes and special assessments which accrue subsequent to the sale and which are not removed
under subsection (e). However, the estate is subject to:
(1) all easements, covenants, declarations, and other deed restrictions shown by public
records;
(2) laws, ordinances, and regulations concerning governmental police powers, including
zoning, building, land use, improvements on the land, land division, and environmental
protection; and
(3) liens and encumbrances created or suffered by the grantee.
(g) A tax deed executed under this chapter is prima facie evidence of:
(1) the regularity of the sale of the real property described in the deed;
(2) the regularity of all proper proceedings; and
(3) valid title in fee simple in the grantee of the deed.
(h) A county auditor is not required to execute a deed to the county executive under this
chapter if the county executive determines that the property involved contains hazardous waste or
another environmental hazard for which the cost of abatement or alleviation will exceed the fair
market value of the property. The county executive may enter the property to conduct
environmental investigations.
(i) If the county executive makes the determination under subsection (h) as to any interest in an
oil or gas lease or separate mineral rights, the county treasurer shall certify all delinquent taxes,
interest, penalties, and costs assessed under IC 6-1.1-24 to the clerk, following the procedures in
IC 6-1.1-23-9. After the date of the county treasurer's certification, the certified amount is subject
to collection as delinquent personal property taxes under IC 6-1.1-23. Notwithstanding
IC 6-1.1-4-12.4 and IC 6-1.1-4-12.6, the assessed value of such an interest shall be zero (0) until
production commences.
(j) When a deed is issued to a purchaser of a certificate of sale sold under IC 6-1.1-24-6.1, the
county auditor shall, in the same manner that taxes are removed by certificate of error, remove
from the tax duplicate the taxes, special assessments, interest, penalties, and costs remaining due
as the difference between the amount of the last minimum bid under IC 6-1.1-24-5(e) and the
amount paid for the certificate of sale.
IC 6-1.1-25-4.5
Entitlement to tax deed under various circumstances; notice or requirements; reversion of
certificate of sale to county
Sec. 4.5. (a) Except as provided in subsection (d), a purchaser or the purchaser's assignee is
entitled to a tax deed to the property that was sold only if:
(1) the redemption period specified in section 4(a)(1) of this chapter has expired;
(2) the property has not been redeemed within the period of redemption specified in section
4(a) of this chapter; and
(3) not later than nine (9) months after the date of the sale:
(A) the purchaser or the purchaser's assignee; or
(B) in a county where the county auditor and county treasurer have an agreement under
section 4.7 of this chapter, the county auditor;
gives notice of the sale to the owner of record at the time of the sale and any person with a
substantial property interest of public record in the tract or real property.
(b) A county executive is entitled to a tax deed to property on which the county executive
acquires a lien under IC 6-1.1-24-6 and for which the certificate of sale is not sold under
IC 6-1.1-24-6.1 only if:
(1) the redemption period specified in section 4(b) of this chapter has expired;
4(b) of this chapter; and
(3) not later than ninety (90) days after the date the county executive acquires the lien under
IC 6-1.1-24-6, the county auditor gives notice of the sale to:
(A) the owner of record at the time the lien was acquired; and
(B) any person with a substantial property interest of public record in the tract or real
property.
(c) A purchaser of a certificate of sale under IC 6-1.1-24-6.1 is entitled to a tax deed to the
property for which the certificate was sold only if:
(1) the redemption period specified in section 4(c) of this chapter has expired;
4(c) of this chapter; and
(3) not later than ninety (90) days after the date of sale of the certificate of sale under
IC 6-1.1-24, the purchaser gives notice of the sale to:
(A) the owner of record at the time of the sale; and
(B) any person with a substantial property interest of public record in the tract or real
property.
(d) The person required to give the notice under subsection (a), (b), or (c) shall give the notice
by sending a copy of the notice by certified mail to:
(1) the owner of record at the time of the:
(A) sale of the property;
(B) acquisition of the lien on the property under IC 6-1.1-24-6; or
(C) sale of the certificate of sale on the property under IC 6-1.1-24;
at the last address of the owner for the property, as indicated in the records of the county
auditor; and
(2) any person with a substantial property interest of public record at the address for the
person included in the public record that indicates the interest. However, if the address of the
person with a substantial property interest of public record is not indicated in the public record
that created the interest and cannot be located by ordinary means by the person required to give
the notice under subsection (a), (b), or (c), the person may give notice by publication in
accordance with IC 5-3-1-4 once each week for three (3) consecutive weeks.
(e) The notice that this section requires shall contain at least the following:
(1) A statement that a petition for a tax deed will be filed on or after a specified date.
(2) The date on or after which the petitioner intends to petition for a tax deed to be issued.
(3) A description of the tract or real property shown on the certificate of sale.
(4) The date the tract or real property was sold at a tax sale.
(5) The name of the:
(A) purchaser or purchaser's assignee;
(B) county executive that acquired the lien on the property under IC 6-1.1-24-6; or
(C) person that purchased the certificate of sale on the property under IC 6-1.1-24.
(6) A statement that any person may redeem the tract or real property.
(7) The components of the amount required to redeem the tract or real property.
(8) A statement that an entity identified in subdivision (5) is entitled to reimbursement for
additional taxes or special assessments on the tract or real property that were paid by the entity
subsequent to the tax sale, lien acquisition, or purchase of the certificate of sale, and before
redemption, plus interest.
(9) A statement that the tract or real property has not been redeemed.
(10) A statement that an entity identified in subdivision (5) is entitled to receive a deed for
the tract or real property if it is not redeemed before the expiration of the period of redemption
specified in section 4 of this chapter.
(11) A statement that an entity identified in subdivision (5) is entitled to reimbursement for
costs described in section 2(e) of this chapter.
(12) The date of expiration of the period of redemption specified in section 4 of this chapter.
(13) A statement that if the property is not redeemed, the owner of record at the time the tax
deed is issued may have a right to the tax sale surplus, if any.
(14) The street address, if any, or a common description of the tract or real property.
(15) The key number or parcel number of the tract or real property.
(f) The notice under this section must include not more than one (1) tract or item of real
property listed and sold in one (1) description. However, when more than one (1) tract or item of
real property is owned by one (1) person, all of the tracts or real property that are owned by that
person may be included in one (1) notice.
(g) A single notice under this section may be used to notify joint owners of record at the last
address of the joint owners for the property sold, as indicated in the records of the county auditor.
(h) The notice required by this section is considered sufficient if the notice is mailed to the
address required under subsection (d).
(i) The notice under this section and the notice under section 4.6 of this chapter are not
required for persons in possession not shown in the public records.
(j) If the purchaser fails to:
(1) comply with subsection (c)(3); or
(2) petition for the issuance of a tax deed within the time permitted under section 4.6(a) of
this chapter;
the certificate of sale reverts to the county executive and may be retained by the county executive
or sold under IC 6-1.1-24-6.1.
IC 6-1.1-25-8
Tax sale record
Sec. 8. Each county auditor shall maintain a tax sale record on the form prescribed by the state
board of accounts. The record shall contain:
(1) a description of each parcel of real property:
(A) that is sold under IC 6-1.1-24;
(B) on which a county acquires a lien under IC 6-1.1-24-6; or
(C) for which a certificate of sale is purchased under IC 6-1.1-24;
(2) the name of the owner of the real property at the time of the:
(A) sale;
(3) the date of the:
(A) sale;
(4) the name and mailing address of the:
(A) purchaser of the property and the purchaser's assignee; or
(5) the amount of the minimum bid;
(6) the amount for which the:
(A) real property; or
(B) certificate of sale;
is sold;
(7) the amount of any taxes paid by the:
(A) purchaser of the real property or the purchaser's assignee; or
and the date of the payment;
(8) the amount of any costs certified to the county auditor under section 2(e) of this chapter
and the date of the certification;
(9) the name of the person, if any, who redeems the property;
(10) the date of redemption;
(11) the amount for which the property is redeemed;
(12) the date a deed, if any, to the real property is executed; and
(13) the name of the grantee in the deed.
Appendix 2
Sample Tax Sale Record Indiana

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