I bought a piece of property in 1997 from a man who had bought it at tax sale. As we were sitting at the closing table I asked him politely for information about tax sales. He told me that tax sales were difficult and that you had to do alot of research and that I had small chance of making any money. So I sat there for a second, because I did not fall off of the turnip truck just this last week. I decided right then and there to go the tax sale the next coming year.
I saw this man at the next tax sale and I have seen him every year since. I bought my first property at tax sale in 1998, and I did miss one year since, but currently have several pieces of property in different stages of ownership, with interest and penalties just accrueing nicely.
I like the tax sales. Interest in St Tammany Parish is 1 percent (1%) a month, or 12 percent (12%) a year, with an additional 5 percent (5%) gross penalty of the tax lien as well as the interest earned. Unless there is a dual assessment, which is rare, then the worst that can happen is that you get your money back plus interest and penalties earned. Well over 90% of the of the properties sold at an any given tax sale will be redeemed. So do not expect to get the property. The odds are heavily in favor of you getting your money back plus earned interest. Research each property is wise, however there were over 2000 at last years sale. There is no guarantee on when the property will be redeemed. Each property is different, many of them will be redeemed within several months of the sale, and others will go for several years. In some cases the property is for sale and they are just going to let the taxes be settled at the closing through the title search, and the house might sell in a week or in a year. Some properties are going through a succession and so nobody is paying the taxes and letting it get settled through the estate. In these cases you will not get the property in 3 years, you will get your money back, you just do not know exactly when, though you will make a nice return on your money.
You must continue to pay the taxes on the properties year after year and you must be aware that the first year in St Tammany Parish, that the Assessor’s Address Roll is a year behind the Tax Collector. So if you do not go into the Tax Collector’s Office the first year after you purchase a property and pay the taxes, then they will go back up to tax sale again, and then you will have two choices, stand up when they call out the property the day of the sale and state that you have an interest in the property from the previous years tax sale, or just let them sell and redeem them in a month. Either way you will have to pay extra fees you can avoid by going in around March and checking on the previous years properties.
On average you can earn up to 17% interest return on your money through the St Tammany Parish Tax Sale. This is better ROI (Return on Investment) than you will receive from many bank accounts.
There are certain properties to try and buy as well as properties to avoid for various reasons. I will go into those on another rant. Also the property acts as a security for your investment, this is how you can actually own these properties if nobody ever comes back and redeems them. To own them though you must be able to obtain clear title to the properties. Therefor doing abstract/title research on each one of your properties is key to success.
Tax Sales are a great investment, but they are long term with a good ROI, and have the potential to have a great ROI.
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Contact me if you have any questions about the St Tammany Parish Tax Sale
marcp@scogginproperties.com
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