Learn How To Buy A House By Just Paying The Taxes
Summary
TLDRIn this video, Ted Thomas, a tax lien certificate and tax deed authority, explains how you can buy properties at significantly reduced prices by paying delinquent property taxes. He outlines the process of purchasing such properties through county auctions, emphasizing the importance of thorough research, understanding legal implications, and checking property conditions before bidding. Ted also shares success stories of people who have profited from this strategy, while cautioning about potential pitfalls, such as remaining liens and poor neighborhood conditions.
Takeaways
- 🏠 You can buy a house by just paying property taxes, which is legal in all U.S. counties.
- 💼 If property taxes are not paid, the county may place a tax lien, followed by a levy, and eventually auction the property to recover the owed taxes.
- 💲 Properties can be purchased at auction for just the amount of delinquent taxes, sometimes for less than $500.
- 🌍 This opportunity exists in all states, with examples of properties being bought for a fraction of their value, such as in Los Angeles County.
- ⚠️ While mortgages and deeds of trust can be wiped out at tax auctions, other liens like IRS or municipal liens may remain on the property.
- 📊 Researching and identifying profitable properties requires examining the neighborhood, property condition, and title records.
- 🛠️ Buyers should be cautious of buying properties without physically inspecting them and understanding potential defects or title issues.
- 🚨 Attending auctions in person and conducting thorough due diligence is crucial, as there are no refunds once a property is purchased.
- 📈 The goal of this investment strategy is to buy low and sell high, with margins potentially leading to significant profits.
- 🗺️ Ted Thomas offers a tool called the 'magic map,' which helps users find tax auctions nationwide and identify potential properties.
Q & A
What is the primary concept discussed in the video?
-The video discusses the concept of buying properties through tax lien certificates and tax deed auctions, where properties can be acquired by paying the delinquent property taxes owed.
Why do counties auction properties with delinquent taxes?
-Counties auction properties with delinquent taxes because they need the tax revenue to fund essential services like schools, police, fire departments, and county employees. The auction helps the county recover the owed taxes.
What types of properties can be bought at tax auctions?
-At tax auctions, various types of properties can be bought, ranging from small homes to large colonial houses. Some properties may be in good condition, while others might be neglected and require repairs.
Can mortgages and deeds of trust be wiped out during a tax auction?
-Yes, mortgages and deeds of trust can be wiped out during a tax auction. However, other liens like IRS liens or municipal liens may remain on the property.
What should potential buyers do before purchasing a property at a tax auction?
-Potential buyers should conduct thorough research, including checking the property’s condition, title defects, and the neighborhood. It’s advisable to have professional help from attorneys or financial experts to navigate the complexities of liens and other legalities.
What are some common mistakes people make when buying properties at tax auctions?
-Common mistakes include buying properties without physically inspecting them, not checking for title defects, and purchasing properties in bad neighborhoods. Additionally, relying solely on online information without doing due diligence is risky.
What is the significance of doing homework before participating in a tax auction?
-Doing homework is crucial because it helps buyers understand the property’s value, condition, and any potential legal issues. Proper research ensures that buyers make informed decisions and avoid costly mistakes.
What happens if the property purchased at a tax auction has defects or issues after the sale?
-If a property purchased at a tax auction has defects or issues after the sale, the buyer is responsible for them. There are no refunds from the county, so it’s essential to conduct thorough research before bidding.
How can someone find out where and when tax auctions are happening?
-People can find out about tax auctions by using resources like the 'magic map,' which provides information on auctions across different counties in the United States. The map helps identify auctions by state and county.
What is the potential profit margin in buying properties at tax auctions?
-The potential profit margin in buying properties at tax auctions can be significant. For example, a student mentioned in the video bought a property for $9,100 and sold it for over $100,000 after making necessary improvements.
Outlines
🏠 Discovering Property Deals Through Tax Liens
The speaker introduces the concept of buying houses for a fraction of their value by paying delinquent property taxes. This is a legal process across all U.S. counties, where the county seizes and auctions properties whose owners fail to pay taxes. The county needs tax money to fund essential services, so properties are sold for at least the amount owed in taxes. The video promises to show examples of properties bought this way, sometimes for as little as $500, with no mortgages or deeds of trust involved.
📈 Research and Caution in Property Auctions
The speaker explains the importance of thorough research before purchasing a property at a tax auction. Potential buyers should start by selecting a specific county and understanding property values to ensure a good investment. Properties are sold 'as is,' meaning the county does not guarantee the condition or clear title, so defects might exist. The importance of examining the property's neighborhood and condition is emphasized, as well as the risks of buying unseen or without proper due diligence.
❗ Common Mistakes in Tax Auction Purchases
The speaker highlights common pitfalls in purchasing properties at tax auctions. Many uneducated buyers make the mistake of not visiting the property or checking its condition and title, leading to poor investments. The importance of inspecting the property and understanding the auction rules is reiterated, as auctions are final with no refunds. Buyers are cautioned against relying on luck or prayer in these transactions, as due diligence is crucial to avoid costly mistakes.
💼 Steps to Success and Profitable Reselling
A case study is presented where a student successfully bought a property at a tax auction for $9,100, significantly below its value. After researching the neighborhood and understanding the market, the student resold the property for a profit of over $100,000. This example underscores the profitability of the tax lien business when proper research and strategic thinking are applied. The speaker encourages viewers that anyone can learn and succeed in this business by following a step-by-step process.
🗺️ Finding and Navigating Property Auctions Nationwide
The video concludes by guiding viewers on how to find property auctions across the United States. The 'magic map' tool is introduced, which allows users to locate auctions in every county. By using this tool, buyers can easily find opportunities and begin their journey into the tax lien and deed investing business. The speaker reiterates the accessibility of this business, encouraging viewers to explore the opportunities available to them.
Mindmap
Keywords
💡Tax Lien
💡Tax Deed
💡Auction
💡Due Diligence
💡Mortgage
💡IRS Lien
💡Caveat Emptor
💡Property Condition
💡County Treasurer
💡Title Defects
Highlights
It's possible to buy a house by just paying the property taxes, which is a legal process in all counties in the United States.
When property owners fail to pay their taxes, the county files a tax lien, followed by a levy, eventually leading to a property auction to recover the unpaid taxes.
Properties at these auctions can be purchased for a fraction of their value, sometimes as low as $500, depending on the state and auction.
Properties bought at tax auctions often come with no mortgage or deed of trust, making them particularly attractive for buyers.
While the mortgage and deed of trust can be wiped out, other liens, such as IRS or municipal liens, may remain on the property.
It's important to consult with professionals, such as attorneys or financial experts, to navigate the complexities of these transactions.
Research is critical when buying properties at tax auctions. Buyers should start by identifying the right county and understanding property values and neighborhood conditions.
All properties sold at tax auctions are sold 'as is,' with no guarantees on the condition or title of the property.
Common mistakes include buying properties without physically inspecting them or understanding the title and neighborhood conditions.
Once you pay for a property at an auction, there are no refunds, so due diligence is essential.
Auctions are public, but it’s crucial to attend in person or at least thoroughly research the property before buying.
One example shared is of a student who bought a property for $9,100, which had a tax liability of $66,000, and later sold it for over $100,000.
The 'magic map' is a tool that allows users to find tax auction properties in every county in the United States.
This business model doesn’t require any special licenses, making it accessible to anyone willing to learn the process.
Ted Thomas emphasizes that this is a step-by-step process that anyone can learn and succeed in with proper research and guidance.
Transcripts
imagine you buying a house for pennies
on the dollar and you get the
[Music]
house hey there everybody I'm Randy much
more importantly this is Ted Thomas
who's a tax lean certificate and tax
deed Authority now Ted a lot of folks
who clicked on this video may not
believe what they just read that you can
actually buy a house by just paying
property taxes people don't believe this
but let me start off by telling you this
it's the law in all counties in the
United States everyone must pay property
tax now what if those people don't pay
the property tax so what we getting at
is could we buy some of these properties
just by paying the tax I'm going to show
you example of that but let me give you
the nitty-gritty the nitty-gritty is
this the legislature of the state makes
all the laws and they govern the state
they tell everyone in the state you must
pay property tax all Property Owners
must pay now if the property owner fails
to pay the taxes what's really going to
happen it's going to happen quickly
because the county needs that money to
run the county so what the County
Treasurer will do is they will first
file a tax lean that's a claim against
the property that will be followed by a
levy whenever you see that word Levy if
it comes to you in a written document
that means the government's coming to
take your property okay so they Levy
against the property so they take the
property they push the property owner
off the property why do they do all that
because now they're going to confiscate
the property and they're going to sell
it at auction the local County doesn't
want that auction that does not want
that auction property but they have to
sell it so they can get the tax money
now why do they want the tax money
because they got to pay the school
teachers the police department the fire
fighters they've got to pay the County
Employees so the county is now going to
sell that property they don't care what
they sell it for but they're going to
sell it for at least the back taxes what
if you could buy that that property at
the back taxes well I'm going to show
you how just one minute well Ted with
starting bids being just the delinquent
taxes what kind of prices are we talking
about here I've seen properties sold for
less than $500 two bedroom one bath
homes livable homes with people living
in them they didn't pay the taxes I've
seen people nobody showed up at the
auction they bought properties for less
than $500 now it doesn't matter what
state you're in I've seen people in Los
Angeles I have students actually dozens
of students that have bought properties
in Los Angeles County some have bought
the properties for 9 cents on the dollar
with no mortgage and no DEA trust in Los
Angeles County California I personally
have bought properties in places like
New York where they big colonial homes
on three or four acres of land okay no
mortgage no de of Trust on the property
so there's plenty of very nice
properties now some of them are used and
abused some of them need tend to 11 care
I'm not getting brand new properties for
that but I'm getting them for really
good prices wow so the mortgage deed or
the deed of trust just gets wiped out uh
I mean what about other leans that might
be on that property Ted okay now this is
a confusing part of the business okay it
confuses people because we always say
there's no mortgage and there's no deed
of trust okay those leans can be wiped
out by the treasurer but the treasurer
can't wipe out the other leans all right
so you don't want to try to navigate uh
all these obstacles by yourself you
probably want to have a skilled attorney
tell you a little bit more about it you
might not want to have some Financial
professionals on your team to help you
out about it I actually use a coach
because I like to talk to a coach that's
been through all this but the point is
other lean stay on the property what
other leans could stay on an IRS lean
could stay on the property a municipal
lean could stay on the property so I try
to find people that have already worked
their way through they've already
navigated these difficult times and I
try to talk to them about how they get
around all that you are probably going
to have to learn from someone that's
either a coach or you're going to have
to hire a financial professional that
understands these different loans in
different Lanes keep in mind they're not
going to be wiped out from the property
the tax man can wipe out only so much
what can they wipe out they can wipe out
the deed of trust and the mortgage all
the rest of those loans are staying on
the property well now that the people
who are watching kind of understand the
concept of what we're talking about here
Ted what are the steps involved with
researching and identifying potential
properties for them to purchase okay
well this is the challenge for everybody
uh everybody would like to say I'm just
going to go buy that property well you
don't want to buy a property by just
deciding that okay this is a business of
abundance Nationwide there'll be at
least 5,000 auctions so takes a little
time to learn how to do it but it's just
a really a stepbystep process and it all
starts at the counties now if you st in
Delaware you got three counties to check
out and not very much start in Texas you
got 250 counties so narrow it down to a
county that's the first thing you want
to do now from there you want to start
figuring out some margins on property so
you can make money you want to buy it at
the lowest possible price and you want
to have property that have a good
assessed value so that you can resell it
all right now that doesn't include what
the market is around you so you're going
to have to look around the property that
you're buying and see what the
neighborhoods like however all property
is sold by the county
as is that means caveat emper which
simply means beware as is okay now the
county makes no guarantee as to
condition and they tell you we're not
warrantee that the title is clear in
other words there could be defects in
the title so when you're buying you need
to have those two things in the back of
your mind all right so defects you can
find all this out because it's all at
the county records so you need to do
that research and do it right are there
any common mistakes that people make or
put pitfalls they should avoid uh when
they're buying a house through a tax
sale it would really be good if
everybody would ask themselves that
question because a lot of people just
decide they're going to buy they just
say I'm going to buy this one I'm going
to buy that one and I'm going to tell
you right now uneducated people I call
them risk-takers because what do they do
they go out and buy property without
having boots on the ground without
looking at the property in other words
observing the condition of the property
or checking the title as we talked about
just Min checking for physical defects
or when they're on the property looking
at it looking at the neighborhood what
if the neighborhood is bad but the
property is good well you can't fix the
neighborhood but you can't fix the
property so just probably going to have
a heck of a time trying to sell that
property so you don't want to buy in bad
neighborhoods you want to buy good
properties in reasonable neighborhoods
and if you can fix them most everything
can be fixed on the property but if it's
in a bad neighborhood you can't do that
now many people attend an auction and
they pray that they're going to get a
property or many people never even
attend the uh auction they'll buy online
okay when they buy online they haven't
looked at the property so they're
praying it's going to be good I can tell
you right now prayer is not a good
business strategy at all so auctions are
all public anybody can attend uh but
going to look at the property is a huge
thing that everybody should think of so
let me repeat byy everywhere the auction
rules are the auction rules and I can
tell you right now if you invest in an
auction and you give the county your
money you're not getting it back there
is no refund in an auction so if the
property was bad or did it burned down
or there' been a fire or there had been
a wind storm or a flood or anything like
that I can tell you right now whatever
you bought you bought so when you pass
your money across the county to the
county they're not doing any refund it's
the law that they can't refund the money
so you need to make sure that you've
done your due diligence if you've been
watching this video you might have a
question for Ted perfect I'll tell you
what you do just leave it in the comment
section below and you will get an answer
while you're down there be sure to like
the video and subscribe to Ted's Channel
Ted how do people go about finding where
and when these auctions are happening
you know I'm coming that we to find
these properties in just a second but I
want to explain this okay folks this is
a money business okay the objective here
is is you want to buy at the lowest
price you possibly can have enough
margin so you can make 25 or even
$50,000 on this property all right now
I'm going to show you an example before
I tell you more information about how
you can get to these auction this
example is a student that bought a
property by paying just a few dollars
over the taxes that were owed the taxes
were owed were
$66,000 the student only paid
$9,000 but the student did his homework
so as I've said all along do your
homework what did the student do for
homework well first of all the student
went and checked around the neighborhood
the student bought this property for
$99,100 you might want to remember that
number $9,100 all right so that was a
bargain it was a three-bedroom two bath
property they checked around the
neighborhood and they found properties
that were worth more than
$150,000 but this was a handyman special
had trees growing all over it from the
satellite it looked like a bunch of
trees you could barely see the property
but the St the student paid bargain
price for the property and then he
cleaned it up and started to go about
the process of reselling it well if
they're going to resell it he spent more
time checking in the neighborhood
talking to Brokers find out what it was
really worth all right he's thinking a
little bit out of the box he's saying
why don't I try to sell it with a lease
why don't I try to sell it with
installment payments all right so they
figured out the challenges to sell it
and sure enough they did sell it and
when he sold the property he sold it so
he made more than $100,000 now think
think about what we talked about he
bought it at very close to the tax value
all right the tax that were owed and he
sold it and made over
$100,000 what's the beauty of this
business you don't need a license from
the governor anybody can learn how to do
it it's a step-by-step process everyone
that's looking at me right now could do
do the exact same business all right now
if you want to check out properties
Nationwide you can go right below me
there's a there's a map that you can get
it's called the it's called the magic
map you can go to the magic map and you
can find properties in every county in
the United States you just move your
cursor around it'll tell you as soon as
you get to a white circle it'll tell you
how many auctions are going to be in
that state you can push the button and
that'll tell you take you to the
different auctions I'm Ted Thomas see
you on the next
[Music]
video
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