Also, i was curious about Over the Counter Tax Liens…how do i find these?, Is it still sold by bidding or can u purchase it outright w/o competition?, & do the same rules apply for the over the counter purchases as the regular auction tax liens?

Anyways thx as always & hope to hear from u soon,

Jake

Approaching people in tax sale is a good strategy. Your exact strategy has a couple of flaws.
1) You are assuming that someone who is about to lose their house will give it to you cheaply – It does happen but it is not common.
2) A more important issue is that their will likely be other mortgages or liens against the property. They simply can’t give you the property for $200.

Yes you can do deals that way. I have. However just be aware that it is a numbers game. You may need to approach hundreds of people to find a deal that will work exactly that way. The way it will happen is to take action and start approaching those people. Good Luck – Ned

Yes I have gotten properties via tax sale. no I have not ever evicted anyone because I have only gotten vacant houses. I did get a court judgment on a house that did have a tenant in it, but the owner wanted to keep the house so I negotiated with him. He paid me what I was due (Taxes, Interest and legal fees) plus another $2500. Not a bad return for a $400 lien. I could have taken the house and made an easy $10,000 but I was a nice guy and negotiated a deal with him.

Other options,
*Rent back to the original owner – probably not a good strategy in MD because of the homeowners in foreclosure protection act.
*If the owner is older you could grant a life estate. That means they own it until they die and then you get it.
*Or you could only buy liens on vacant properties or at least non owner occupied properties.

I really don’t want to kick a little old lady (or anyone else) out of a home they own. I fell less concerned about taking a property from a landlord that didn’t bother to pay his or her taxes.

PS: Jake can you vote for me as the best blog in Baltimore? Go to the home page here and scroll down a post or two to see how – I can rally use the vote thanks

No that is not quite right. The tax lien or deed holder Does not owe the mortgage – it has been wiped out via tax lien foreclosure or tax deed sale. The previous owner of the property still owes the bank. The bank could go after the previous owner if they chose.

My point was that the tax sale releases the property as collateral from the mortgage loan. However the borrower (the previous property owner) theoretically still owes the money, just the collateral is gone.

Please keep in mind that I am familiar with the laws in MD however if you are talking tax deeds you are talking about a different state that may handle things differently. What I say will apply generally and in most states but you need to be familiar with the rules in the particular jurisdiction that you are buying in.

I don’t know the legalities of something like that, perhaps it could be considered a fraudulent conveyance. However I doubt that is the case, because the mortgage holder has the right to redeem to protect their interest. If the mortgage holder chooses not to redeem and protect their own interest I don’t see where they would have a right to complain.

However you must understand a tax sale wipes out any claim a mortgage holder has against the property but it does not necessarily remove personal responsibility for the debt. When you get a “mortgage” there is normally two documents; a note which you are personally responsible for and a mortgage or deed of trust which makes the property collateral for the loan. Just because the collateral is gone doesn’t mean the money isn’t still owed.

This actually came up recently. I got court decree giving me a tax sale property. I offered to sell it back to the previous owner saying that the mortgage was wiped out. The lender had loans on two other properties so he didn’t think it would be a good idea.

So I am not sure it is practical, but I really do like your creative thinking. I wtote a post about something similar here Why would you foreclose on yourself?