Which states have redeemable deed sales and which ones are coming up this fall?
What a redeemable deed is and what makes it different from a tax lien or tax deed?
Which are the best redeemable deed states to invest in?
Read on to get the answers to these questions…
What is a Redeemable Deed?
A redeemable deed is kind of in between a tax lien and a tax deed. When you buy a tax lien, you don’t get the deed to the property – you don’t own the property. But when you buy a deed you are purchasing the property. When you buy a redeemable deed, you’re buying the deed to the property, but you have to wait out the redemption period until you actually own it.
There are only 7 redeemable deed states in the US, plus the city of Philadelphia, PA. And each of these states has different laws regarding their tax sales.
The redeemable deed states are:
- Delaware
- Georgia
- Hawaii
- South Carolina
- Tennessee
- Texas
And Connecticut has both tax lien and redeemable deed sales, some towns have tax lien sales and others have redeemable deed sales.
Which Are The Best Redeemable Deed States To Invest In?
Each one of these states conducts their tax sales differently. Some states make it easy to get the property once the redemption period is over. In Texas, the deed buyer is considered the owner of the property as soon as they purchase the deed at the tax sale. The previous owner has a right of redemption, but the deed purchaser has ownership. Contrast that with a Georgia redeemable deed. In Georgia, the redeemable deed buyer must go through a judicial foreclosure process after the 1-year redemption period is over to own the property.
In the other redeemable deed states the deed buyer is not the owner of the property until the redemption period is over. But does not have to go through a judicial foreclosure in order to get the tax deed to the property. In all of these states, however, just like when you foreclose on a tax lien or buy a tax deed, you will have to clear the title to the property in order to get title insurance.
Another thing that varies greatly among redeemable tax deed states is the interest or penalty rate that the investor receives if the deed redeems. Texas and Georgia have higher penalty rates – 25% in Texas and 20% in Georgia, which makes for more competitive bidding. The more populous counties in these 2 states have tax sales every month. That makes for less properties available at each sale and more bidders, which leads to stiffer competition.
I like the states that have more modest interest rates like and Tennessee and South Carolina. The interest paid in these states is 12% per year. All of the SC counties and most of the TN counties have tax sales only once a year. Hawaii also has a 12% per annum interest rate paid on redeemable tax deeds, but there are only 4 counties in Hawaii and none of those counties have many properties in their tax sales. The state of Delaware has an interest rate of 15-20% and has only 3 counties. And one of those counties has a tax sale almost every month. So there are not a lot of properties available in each of those sales.
Is Redeemable Deed Investing For You?
What do you need to know about each of the redeemable states before you invest? Which states make it easy to get the deed after the redemption period is over? What do you have to watch out for? When do these tax sales take place and which ones are coming up this fall? These are just some of the things that I’ll be covering in our next live virtual workshop in October!
Join me for a 2 hour live virtual workshop on the Redeemable Tax Deed Sales on October 18, 2020. In this workshop, I’ll show you how to get all the information you need to buy profitable redeemable tax deeds. I’ll show you where and when these tax sales take place, which are the better counties to invest in, and what you need to watch out for. Registration is $149 and includes the recording of the live training, a workbook, and a copy of the slides for the workshop! And registration for the workshop includes a one month trial in the Tax Lien Profits Accelerator™.
Find out more about the Redeemable Tax Deed Sales Workshop at https://www.taxlienlady.com/redeemable-tax-deed-sales-virtual-workshop
Follow Us!