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Anybody buying tax liens?

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  • Anybody buying tax liens?

    Just wondering if any of you all have invested in tax liens. If so, did you get a profitable system set up?
    james.c.hendrickson@gmail.com
    202.468.6043

  • #2
    I would to hear from someone about this too...

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    • #3
      a bit unrelated, but I know a fellow who does quite well buying bad debt.
      How can you have any pudding if you don't eat your meat?

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      • #4
        I annually attend the tax sales in my county but most of the inventory contain small undesirable undeveloped residential lots with other liens like association dues. The good stuff is usually paid off at the time of the auction or goes through a bidding war sometimes at levels near appraisal.

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        • #5
          I would like to buy two specific, adjacent vacant lots that were seized or ceded to the city 20+ years ago, but they have a policy only to sell for a house or business to be built. In the meantime, I have been taking care of the property for six years. This started when I signed a lease with the city to use the land for gardening. The city offers garden leases on vacant land it has seized for tax liabilities. That way the city turns over responsibility to keep it clean, mowed, and tidy.

          My city has 25,000 vacant properties. Some have buildings on them, some do not, especially where the city has had to bulldoze a house that declined so far that it became a nuisance. So the city finds it advantageous not to have the expense of sending tractors out to mow three or four times a year.

          So I signed a five year lease to garden there, with the understanding that if they found a developer-buyer, I could lose the garden at any time. Toward the end of the fifth year, a buyer put in an offer and he was given an entire year to come up with financing and building plans. In the meantime, the city did not even tell me that they had this contingent offer which was to expire in one year. I found out because when I went to the website to renew my five year lease, the property was no longer on the list of those for sale, or those which could be leased for gardening. I confirmed the situation by finding the public meeting minutes at which the sale was tentatively agreed to. Never a word to me, who was actually taking care of the property.

          Well, the year went by, and I just continued to garden there (big garden of 80 feet x 140 feet) and do the mowing, waiting to be informed by the city, or the supposed buyer. No one has ever contacted me. The Forestry Department, which mows these lots should have my garden back on their list of land to come mow. But as far as I know, they just keep seeing it is already magically mowed and drive on by.

          So I am using the property; I am saving the city money; I want to own the property; the property has been removed from the tax base for 20+ years; But city policy is that it cannot be sold to me, as I only want to garden it, not build a house or business there.

          A bird in hand is worth two in the bush. I'm the bird in hand. I'd pay taxes immediately on this albatross on the city's neck, whereas the supposed buyer has strung the city along for a year. Sure, a house on the property would be assessed at higher value than a garden, so would bring in more tax money, but my garden is here and now, not a pipe dream.

          I would consider such a buy an investment. No money return, but the returns are fabulous. It is an investment in my health to get out there and do the work. It is an investment in my health to eat the freshest food. It is an investment in my mental and spiritual health to work with nature.
          "There is some ontological doubt as to whether it may even be possible in principle to nail down these things in the universe we're given to study." --text msg from my kid

          "It is easier to build strong children than to repair broken men." --Frederick Douglass

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          • #6
            Joan - great points. Is there a way get around the cities restrictions? Like build a shed on the property?
            james.c.hendrickson@gmail.com
            202.468.6043

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            • #7
              No, it has to be habitable with utilities, up to building codes, pass inspection for occupancy, etc. The city would have to pre-approve any financing and building plans before the sale could go through. Besides, this other person has dibs on buying it. Even though he was only to have a year, I'm aware of another case where a someone wants to by and build on another city tax-seized lot, but the next door neighbor to the lot (a prominent city employee) has had dibs on it for 10 years without going through with the sale. They just keep it mowed as a pleasant side yard. The guy who wants to buy "my" vacant lot/ garden is also a somewhat prominent city employee.... I'm not up for a big fight; it mostly just makes me sad.

              The one thing that might be a possibility is to incorporate my garden as a business. Actually its a small orchard, that does produce enough to sell. Under the lease, I was not allowed to conduct any business on the lot. But still, the way things are written right now, I think I'd have to promise construct a building for the business. Redevelopment is just the defined purpose of the city agency that land banks all these 25,000 lots. When the agency was constituted, no one had the idea that a garden could be part of redeveloping a city.

              But again, I'm just not up to fighting city hall. The neighbors like the orchard, my family and friends (and the neighbors) like the fruit. It's a wonderful thing to see in bloom as it is now. But I just don't have it in me to fight for it.
              "There is some ontological doubt as to whether it may even be possible in principle to nail down these things in the universe we're given to study." --text msg from my kid

              "It is easier to build strong children than to repair broken men." --Frederick Douglass

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