Going to the auction

I attended the St. Joseph County, Indiana tax lien auction last month and came away with a few new properties. I’ll have to wait the year’s redemption period of course, but it looks good for getting title.

This year’s auction wasn’t nearly as well-attended as those of years past, largely due to the economic recession. Local investors aren’t as well-monied as they once were, and real estate people, who had been frequent bidders in the past, are hurting from the poor home sales. Realtors aren’t making any money these days.

The auction was still attended by big-money investors, who spent hundreds of thousands of dollars each that day. One common sentiment at all tax auctions is resentment towards these deep-pocketed people, and sure, when you’re walking into the auction with five grand and they have a million bucks to spend, it’s easy to get discouraged. But this is the wrong approach.

I’ve heard so many people complain that the tax auction should be “for the people.” That there should be a separate auction where locals get priority. That there should be some sort of give-away for low-income bidders. Bla, bla bla. It’s all rubbish and nonsense when it comes down to it. It’s not a social program, it’s a method the county uses to raise money, get delinquent taxes paid, and get abandoned houses back on the tax rolls. That’s it. Turning it into a social program for giving away homes would defeat that purpose.

The fact remains that although there are big money investors, it’s still possible to play with only a few thousand. Your approach just needs to be different. The first thing to realize is that these guys with the golden pockets aren’t usually trying to get title to older inner-city homes, they are only trying to target higher-end, occupied homes and acquire deeds that are likely to be paid off. Their goal is to get a quick ten to fifteen percent return, it’s not to get old houses to fix up and rent out. People like myself, and low-budget people who attend, are going after a completely different market than the out of town investors, so they really present no major threat.

To find out more about how to get title to homes at the tax auction, get my book, “Learning to play the real estate tax auction game” (now available at Amazon).