How Other People’s Delinquent Property Taxes Can End Up Making You Rich

If you stumbled across this article, chances are you were just searching Google or some real estate websites trying to find out more about investing in tax delinquent properties. There’s no debate: it’s arguably the most profitable real estate investment you can make. But you’re not the only one who’s figured that out, so you’ll have to go the “back door” route of buying tax-delinquent property if you want to make big bucks.

This “back door” method is simply buying the property from the defaulting owners themselves. The secret is to buy the property after the tax sale. Owners often have a year to pay their back taxes after the property has been sold, and during that year it is do or die, pay or lose all. As the redemption deadline approaches, if they haven’t paid the taxes, you can bet they’ll be ready to sell you for a fraction of the property’s value.

If they can’t pay and you can’t find them, this presents another fantastic opportunity. In many states, when you lose your home, you lose all the equity and the government gets to keep the tax money the home generates. But in about half of the US states (and all of them, for foreclosures), overbids, that is, the amount offered in the tax sale over what was owed in taxes, hold up for previous owners.

Guess how often they notice this? Worse, the government keeps the money if you don’t collect it on time. You can provide a valuable service while earning a ton of cash by locating these funds and then locating their owners, and offering to collect the missing money on their behalf for a finder’s fee. Since these funds are not subject to money search limits, you can charge 40-50% or more, depending on the complexity of the case. The owners have no idea where this money is coming from (especially when it’s a weird type of situation) and will continue to do so, wasting a lot of time, without your help.