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Over-the-Counter Tax Sale Investing: Part 2
Hello Rogue Investors, 
Welcome to Part 2 of this three-part series on over-the-counter tax sale investing.
Why is this topic important enough to dedicate three special newsletter editions?
The answer is that there is limited information available on over-the-counter investing, and yet it is one of the most requested topics by tax sale investors.
For new Rogue Investors, or those of you who missed Part 1, it is archived at: http://www.rogueinvestor.com/real_estate_newsletter/archives.html
To summarize:
Tax liens or deeds that are not sold at an auction are often put into another system for reselling. This process is known as buying over the counter. Tax liens and tax deeds can then be purchased through the mail or literally over the counter at the county's office, and it is first-come, first-serve. There is no stressful auction to attend, and if you can find someone to help you do your field research, there is no traveling required.
How do tax liens and tax deeds end up on over-the-counter lists?
Here are a few reasons:
- Not enough investors at an auction. Although hard to believe, I have seen this happen many times. In Texas, where auctions occur every month, not having enough investors to buy all the properties is common.
- Not enough money. Investors, including me, do not have an unlimited supply of cash and, depending upon what happens at an auction, sometimes there is just not enough money to buy all of the properties.
- Some properties or liens are not desirable because of building restrictions, location, easements, market value in comparison to the taxes owed, or a host of other reasons. You will have to screen out these undesirable liens or deeds.
In total, although it is not well publicized, over 20 states offer some type of over-the-counter investing process. However, getting information about these over-the-counter sales can be difficult.
One of my favorite states for purchasing over-the-counter deeds is Texas. So in this issue I am going to focus on Texas Over-the-Counter Investing.
Texas "Struck-Off" Properties
In Texas, deeds that are not purchased at auction are referred to as "resales" or "struck-off" properties. In fact, if you attend an auction in Texas and no one bids on a property, the Constable conducting the sale will say, "Property XYZ is struck-off to the County." This allows the county to sell the deed directly to you.
It is important to remember that the redemption period for deeds in Texas is six months for all properties other than homestead or agriculture properties, which have a redemption period of two years. The redemption period starts from the date of the tax sale auction, so if you are looking at a struck-off list of non-homestead/non-agriculture properties older than six months from the date of the sale, you are buying a deed with no right of redemption period remaining.
On the other hand, if you find Texas struck-off properties that were recently added to the county's list, the redemption period may not have expired. In Texas, property owners or others with an interest in the property can redeem by paying the taxes, fees and penalties plus your 25% interest for the first year or 50% for the second year.
The truth is that most struck-off properties will be deeds, which is fine with me. I get excited about buying property for less than 50% of its market value and you should, too.
Why consider Texas "struck-off" properties?
In many Texas counties there are more liens and properties available than potential bidders. In some counties, the lists are so fresh that county personnel or attorneys who represent the county are surprised to see someone asking for the list.
Recently, I picked up a list from a county in Texas and the process was quite amusing. I started with the county personnel at the courthouse, I was sent to another county annex building, then to attorneys down the street, and finally to a third county annex. When I finally arrived at the office that handled the over-the-counter properties, they looked surprised and happy to see me. It was obvious that not many people had asked for the over-the-counter list in this county over the last several years.
In one county in Texas, my partner and I picked up lake lots for $3,000 to $5,000 that realtors sell for $15,000 to $25,000.
So, what are the secrets to investing in Texas "struck off" properties?
- Learn how to screen through the lists.
- Do your research and due diligence just like you would with any type of real estate.
- Find fresh lists. Remember, many Texas counties have sales each month, so keep checking for updated struck-off lists.
- You need to know how to navigate the Texas system. Every county is different and the agency or law firm that handles the tax sale auctions is often not the same agency that handles the struck-off sale process.
If you want to get serious about investing in Texas tax deeds by mail, or investing in any of the other states that sell over-the-counter liens and deeds, I invite you to join my partner (Bryan Rundell) and me in a two-hour telephone seminar with live website support. We will be profiling how to invest in liens and deeds through the over-the-counter process. We will cover-over-the counter investing in all of the states that conduct over-the-counter sales, including Alabama, Alaska, Arizona, Arkansas, Colorado, Florida, Iowa, Maine, Maryland, Massachusetts, Michigan, Mississippi, Montana, Nebraska, New Jersey, North Carolina, North Dakota, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Utah, West Virginia, Wisconsin, and Wyoming.
Included with the Over the Counter Teleseminar is the Over the Counter Super List. This list contains thousands of liens and deeds that can be purchased through the mail. Over the years, over-the-counter lists have given our company many good real estate investing opportunities.
As part of the Over the Counter Teleseminar, you will be given Rogue Investor's "Guide to Over-the-Counter Tax Sale Investing." This guide contains step-by-step instructions on how to screen through over-the-counter lists so you can work through an actual list and feel comfortable about your screening expertise.
If you've signed up for our Over the Counter Teleseminar, I will be going over how to screen through these lists in detail.
As a special bonus, I'm including a hard copy printout of thousands of tax liens and tax deeds from over-the-counter lists that can only be obtained in person. Bryan and I do so much research on tax liens and tax deeds across the U.S. that we pick up many over-the-counter lists in person that cannot be obtained any other way.
Talk about undiscovered. Some of these hard copy-only lists are located in counties where it is rare for anyone to request the information. In fact, I am throwing in the over-the-counter lists I picked up in Texas with my Over the Counter Super List.
And remember, if you have questions I will answer them during our live Over the Counter Teleseminar.
If you have been looking for some additional hands-on tax-sale mentoring, but cannot attend a physical seminar, this is your chance.
If you are interested, I need you to sign up by midnight, November 18, 2005 so I can get you registered for the Teleseminar and send you the Over the Counter Super List.
As an extra incentive to get you excited about over-the-counter investing, I am offering a huge discount for Rogue Investor customers.
Instead of paying $497, if you sign up by midnight, November 18, 2005 you will receive all of the following:
- The 2-hour Over the Counter Teleseminar
- The Over the Counter Super List containing thousands of over-the-counter liens and deeds
- Thousands of hard copy liens and deeds in lists I obtained in person by visiting undiscovered counties across the United States
Long live over-the-counter tax sale investing,
Michael Williams
P.S. In the next issue I am going to cover Florida over-the-counter liens and deeds. Why fight for 5% when you can earn the full 18% without attending an auction?
P.P.S. Attention: I want to remind you that we are holding a physical tax lien/tax deed investing seminar in Los Angeles, California on November 12-13 (Saturday and Sunday), 2005. You are invited to attend. For more information, please click on the link below:
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