by Rachel Seidensticker
There are several ways to practice your due diligence when investing in tax liens and tax deeds. As stated in my previous article, it is important to know your state and county laws, contact local agents, and proceed with caution if using investments agents. I want to look further into investigating! The biggest step to your due diligence is knowing the property that you are investing in and what type of lien you are buying.
Even if you are only investing in tax liens, you still have the potential of OWNING that property one day, so it is crucial that you invest your hard earned money that will make a return on your investment.
Investigate, investigate, investigate.
Once you have a thorough understanding of the laws surrounding your county that you are investing in, it’s time to track down the SALE LIST! From this list, you can use the tax ID number (usually a geocode) of each property to search county property records. Most county property records are now available online. It is considered public information, so if it isn’t online, you can call or visit your local treasurer’s office to retrieve this information. These property records will give you the address of the property that you may want to invest in. This is where contact with a local real estate agent comes in handy or you can do more investigating on the internet on your own.
Here’s what you need to do:
1. Find out neighborhood information by searching other properties in the area that are for sale to see the potential market value. For this you can use websites like Realtor.com, Zillow.com and Domania.com.
2. Use a website like Google Earth to find the location and to see a glimpse of the area.
3. Check out a local newspaper to find out more about the town or certain section of a town.
All of these simple facts and steps safeguard your investment.
Tax sale lists are available from the county department holding the auctions, local newspapers, or even more convenient, on the Database in the Members Area of TaxLienLady.com. Tax Lien Lady Database has all the information you need to practice your due diligence including property record websites.
These lists are your connection to protect your hard-earned money! Don’t ever invest in anything with a blind eye! Get out the spy glasses and become an investigator.
Rachel Seidensticker is an administrator of the TaxLienLady-database for tax lien investors, part of the Members Area at TaxLienLady.com. You can find out more about Tax Lien Lady’s Members Area at http://www.taxlienlady.com/Membership.htm.
By Greg January 13, 2011 - 1:55 am
No offense, but this list of due diligence items is very incomplete. It does not tell you key things like whether the owner is in bankruptcy, whether there are environmental problems, whether there are liens (federal or other state/county liens) that will not be wiped out by foreclosing on the lien, whether the county has imposed fines on the property that will survive foreclosure (eg. ‘red flags’ by the city/county), etc, etc…
What I personally want in due diligence before feeling confident in bidding:
* a list of due diligence items grouped into brief vs. detailed. (eg. so that one can not bother doing detailed/harder/more expensive due diligence on properties that one will not bid on for reasons uncovered more simply/cheaply)
* for a particular county: the specific data sources (urls/providers/contact info/etc…) used to perform each of the due diligence items.
Where possible, national data sources for due diligence are preferred since this means less data sources to become proficient with / subscribe to.
I’m working on putting this together for the sales that I plan on participating in.
By Joanne January 13, 2011 - 1:18 pm
Hi Greg,
This is a guest article by Rachel Seidensticker of Tax-Lien-Database, now TaxSaleResources.com. She is just giving an overview here not a check list, but the county resources that you refer to are in the Tax-Lien-Database. You can also find them in TaxLienLady-database.com which is simply my branded version of Tax-Lien-Database. I go over due diligence thoroughly in lesson #3 of my Build Your Profitable Tax Lien Portfolio workshop which I will be doing live classes for again starting on January 25. I haven’t really announced this yet except in my “Jump Start Your Tax Lien Porftolio for 2011” webinar. But I will be doing the live classes and anyone who has purchased the course will be able to take these classes for free, as I consider it an update to the home study course.