Tax Sale, by Design

Posted November 11th, 2007 by Joe Kaiser

Dear Rob,

Someone commented yesterday, wondering why I’m in foreclosure all the time.

Foreclosure investors, in foreclosure?

Ugh, yeah.

Have you figured out why?


It’s a Strategy

I’ve got a feeling, Rob, your office doesn’t really understand what I’m doing. Or, more likely, thinks it has something to do with a scam.

It’s not a scam, of course, it’s a strategy.

I like auctioning off my properties.


Auctions

There are all kinds of auction strategies, and I’ve played around with at least a few.

At one point I even hired an agent specializing in private auctions to list and sell my properties.

Today, I’ve got what I consider to be a better auction strategy . . . sell my properties at public tax sales.


Let the County Handle it

It’s really simple.

I look at tax sales as an excellent way to list, market, and sell my problem properties. It’s different from what other investors do, but then again, what do I do that isn’t?

When I say “list,” I don’t mean list in the MLS. Instead, I sometimes let county treasurers add my properties to their foreclosure lists.

I don’t actually market these properties by running ads or anything like that, I let county treasurers run those newspaper ads for me instead.

And at the auction, I let county treasurers sell my properties and by doing so eliminate closing costs and commissions and title defects and everything else problematic.

Need to clear title on a Washington property?

Running it through a tax sale works like a charm.


A Very Good Plan

A scam?

Ugh, no.

It’s just a good way to sell properties that are otherwise unsaleable. Or, any property for that matter.

Letting my properties go to the tax sale as a strategy to profit from the resulting overage is my right and just a part of the plan. And, it can be a very good plan.


By Design

Selling properties at tax sales, by design, is a strategy for sophisticated investors who understand what they’re doing.

These same investors know the risks and how to minimize them (bidding on your own properties, for example). They know they can come away with nothing, or on rare instances, hit it out of the park.

And that’s why I do it.


Profits From the Sale

That’s also why I buy junk properties from sellers who’ve decided to walk away and just let the county have them for back taxes.

I give them a few hundred or a few thousand dollars to buy their problem properties and if selling at the tax sale seems like a good way to go, that’s what I do.

Sellers who’ve accepted my offers, deeded their interests to me and are paid in full have ZERO claims on the profits I’m able to extract from those properties.

ZERO.

And whether I sell them by listing them or auctioning them or letting them go to foreclosure tax sales already in progress, those profits are my profits.

Interpreting RCW 84.64.080 to say those profits are the property of someone other than the property owner insults the intelligence of us all.

In the arena,

Joe Kaiser


One Response to: “Tax Sale, by Design”

  1. olyguy responds:
    Posted: November 12th, 2007 at 12:44 pm

    Well said Joe. Even my cats could understand the information in your column.

    OF course, my cats are a higher life form than the attorneys at the AG’s office and some of the county staff.

    Here’s some of my evidence to support my statement:

    1. My cats have never lied to me.

    2. My cats have never, ever, lied to citizens for whom they have taken an oath to serve and protect.

    3. My cats have never, ever, taken advantage of an elderly lady who lost her home.

    4. My cats have never held back material information that reverses the meaning of the information made public.

    5. My cats have never violated their oath of office or their code of conduct as an officer of the courts of the State of Washington.

    6. . . . well… you get the idea.

    Remember the old joke about lab rats and attorneys? Attorneys work better than lab rats as experimental subjects for two reasons:
    1. The scientists don’t get emotionally attached to the attorneys like they do with lab rats.
    2. There are some things that even a lab rat won’t do.

    Taking advantage of an elderly lady, gestapo-izing a citizen, lying to the press, holding back material information, etc. . . . no lab rat has ever done those things.


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