Elle wrote:
- quote -

No but I've worked with a lot of regulatory law and it's full of
acronyms, or as an ironic friend calls them, TLAs (three-letter
abbreviations).

My other favorite is RPITA, the R being "royal" and PITA not being a
bread product...a very useful acronym in tax law!

But on-topic -- I don't hear about these as much anymore but sometimes
nasty environmental issues would come up with small properties. An old
underground tank (you know, a UST!), or even a home business where a guy
dumped a lot of chemicals into the back yard.

For a "deal on a property" I think I'd look for opportunities for a
private-sale rather than a tax lien that might ripen into a useful
holding. All the best stories I can think of are about properties that
never went on the market, sold to someone who had a relationship with
the buyer, who maybe put out feelers years in advance.

-Tad

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Sandybeth, this surely is the same thing. I am looking at
land far from a major city. Hopefully this is an advantage.
Chances are I will do a bit of research, attend an auction
and get some kind of sense of the local competition. I
suppose it's best to keep in mind the tenet, "there is no
such thing as a free lunch." OTOH, times are hard.
Opportunities for those with cash may exist. Thanks for
sharing your specific experience.

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On Feb 8, 1:01*pm, "Elle" <honda.lion...[at]nospam.earthlink.net> wrote:
- quote -


I don't know if this is the same thing, but our township puts out a
yearly paper listing of property addresses where taxes are overdue. A
friend got me involved in this useless and time-consuming endeavor for
cheap property about 10 yrs ago. We spent several days driving
around, trying to find all these weird properties, some seemingly
ditches, landlocked property, long strips, etc. After finding only
one piece I was even partly interested in, I went to an auction at the
courthouse, only to be quickly outbid by business-type people who
seemed to know the game much better than I did.
SandyBeth

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Tad Borek wrote:

- quote -

I pulled a copy of my towns current tax lien sales, and found just that.
It's amazing to me how a 4 acre parcel can be landlocked, no right of
way to get in, and no abutter cares to add it to their backyard. But I
got to know the people at my town's tax and assessor's office. Nice bunch.
JOE

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"Tad Borek" <borekfm[at]pacbell.net> wrote
- quote -

For the layperson, I think TB means the land is a toxic
waste dump subject to laws known collectively blah blah as
CERCLA. Are you ex-military, Tad? With all the acronyms you
insert, I wonder. CYA may be best.

If one has researched the land and would like to own it
(even if that's not definite), develop it, and one day maybe
live on it, then I am not so sure the risk is comparable to
a medium grade preferred stock also paying 8%.

All other caveats noted. I agree significant research is
necessary. I just had a friend email me that, indeed, beware
institutional etc. lawyers more familiar with the properties
snapping up the best.

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Elle wrote:
- quote -

Check your local stats but in most areas #2 only happens with properties
you wouldn't want like
2a. you get the property and meet a new friend named CERCLA
2b. you are the proud owner of a worthless strip of undevelopable land
2c. you own a vandalized wreck of a crack house in Detroit that will
cost more to demolish than the land is worth (and the city requires that
you remove it)

3. owner files bankruptcy and your rate is adjusted or lien deemed
worthless or nearly so

4. you waste countless hours researching and bidding on properties with
$5k and under tax liens and never win one because institutions grab all
the low hanging fruit.

5. you end up blowing 2X your $5k investment on foreclosure proceedings

Also - keep in mind the lien is illiquid and produces cash flow only at
the end. For a measly 8% on $5k it's a lot of risk and work compared to,
say, www.quantumonline.com.

-Tad

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I would like to hear anyone's experience with buying "tax
liens" as a way of obtaining high interest and/or a nice
property at a low price. Purchasing tax liens seems to boil
down to two possible outcomes

1.
One loans money for not more than three years (where I live)
at very low risk and a good interest rate, typically between
6% and 16%, averaging around 8% in 2008 where I am, based on
one county I examined.

2.
After three years (where I live), one then owns property
bought for the price of about several years (worst case) of
back property taxes.

Tax liens where I am are typically bought through auction,
where one bids the interest rate one is willing to accept
for as much as three years. The lowest interest rate bid
wins the auction.

I am considering putting about $5000 into this, which is
well south of 5% of my total portfolio. I would like to own
some land (carefully researched in advance). This means I
would likely have to hold a few properties and, after three
years, be prepared to own all.

I would deal directly with the involved local government,
who "oversees" the person currently owning the property and
owing property taxes on it.

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