Did you know that there are 2 states that currently have counties that have online redeemable deed sales? Each of these states only has a handful of counties that conduct their tax sales online, and they are not the best advertised tax sales. Even so, these sales are competitive.
Results From Hamilton County Tennessee
I just bid at an online tax sale for Hamilton County Tennessee (Chattanooga). I did not get any properties in this tax sale because I was not willing to pay more than 50% of the market value for any of the properties in the sale. Even distressed houses went for at least 50% of their after repaired market value. And the really nice properties were bid up to close to their market value.
Why You Need To Look At Properties Before You Bid
Here’s a picture of a house that I looked at and decided not to bid on because of its distressed condition…
This deed sold for $48,500, only about 42% of its after repaired value according to Zillow (The Zillow estimate for this house is $115,895). Keep in mind this house looked like it needed a new roof and new siding, and that was just the outside. Who knows what it needed inside!
Here’s a picture of what I would consider to be the nicest house in the sale:
The Zillow estimate on this house is $325,103, it sold in the tax sale for $195,000, 60% of its ARV. This house was in great shape and will probably redeem before the end of the redemption period (1 year). In this case the winner could receive 12% interest on $195,000 if the deed is held for the full redemption period. Not a bad deal either way if you have that much money to park in one place for a year!
After filtering the list of tax sale properties down to the type of properties I was interested in, we drove by them. I identified 16 properties to bid on. In the last few minutes of the online tax sale, most of my maximum bids were already exceeded. Therefore, I wound up bidding on only 2 properties. In both cases I was eventually outbid. All the properties I was interested in went for over $25K and the 2 that I got to bid on went for over $50K. And they were both vacant houses that likely needed a lot of work.
Suggestions For Future Online Redeemable Deed Sales
Although houses got bid up quite a bit, there was an opportunity in this sale to buy vacant land cheap. There were a few vacant lots in decent areas that went for or not much over the minimum bid. Although there was one large piece of land in a very nice area that went for $20K, most sold for under $5K. There were even a couple of lots that went for less than $3K.
If you’re interested in attending this tax sale in the future, or attending the Shelby County TN online tax sale (both are run by CivicSource.com), keep the following in mind:
- Make sure you have enough cash if you’re bidding on decent houses. I would suggest at least $100K and look at the houses before you bid.
- Check out the crime rate in the area of the properties you’re bidding on.
- If you’re looking to purchase land and have at least $5,000 to spend these tax sales are worth looking into, especially if you know the areas.
Interested in learning more about other states and other counties that have online tax lien or redeemable deed sales? Check out the Buying Tax Liens Online home study course.
Did you know that June is one of the biggest months for tax lien investing in New Jersey? There are 550 Municipalities in NJ and each one has a tax lien sale once a year. Many of them have their tax sale in June. If you want to learn all the details about tax lien investing in New Jersey, then meet me in New Brunswick next Wednesday!
Investing in online tax lien sales or redeemable tax deed auctions is a great way to invest your money for high returns without risking it in the markets. But what do you do if you don’t live in a state that sells tax liens, or if you live outside the US?
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