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Go Ahead, Be A DeedGrabber! Start Getting Deeds to Tax Sale Property WITHOUT Attending Auctions or Buying Tax Liens By Rick Dawson Revised February 2012 WITH SPECIAL BONUS SECTION ON TAX-DELINQUENT INVESTING Copyright 2012 Richard Dawson, DeedGrabber.com Inc DeedGrabber.com Copyright 2012, Richard Dawson Page 2

Legal Disclaimer This book is intended to provide accurate and authoritative information on the subject of tax sales and purchasing property that is in some stage of the tax sale process. It is offered with the understanding that the author is not an attorney or accountant, and is not offering legal or tax advice. Please consult with an attorney in your area before you proceed with any of the suggestions found in this book. This book is intended for instructional purposes only. Every effort has been made to reflect the applicable laws as of the date of the publication of this book. However, this is a dynamic field of endeavor in which new laws are enacted, old laws revised and/or reinterpreted on a continuing basis and where statutes, rulings, and case law are constantly changing. Readers are advised to proceed with the techniques described herein with caution. The author, printers, licensees, nor distributors make no warranties, express or implied about the merchantability or fitness for any particular use of this product. Copyright 2012, Richard Dawson Published by DeedGrabber.com PO Box 3348 Munster, IN 46321 (800) 528-9149 http://www.deedgrabber.com All rights are reserved under State and Federal Copyright Law. No part of this book may be reprinted, reproduced, paraphrased or quoted in whole or in part by any means without the express written permission of the publisher and author. Copyright 2012, Richard Dawson Page 3

Introduction I m glad you ve decided to give DeedGrabbing a try. In case you re not a subscriber to my email list, DeedGrabbing is the process of getting deeds to tax sale property from the owner right before the owner loses the property to taxes. I can t take credit for making up the term; it was actually made up by tax sale investors who thought they were about to get a bargain property before I came along and bought the property directly from the owner. Now that we ve defined DeedGrabbing I won t have to put it in quotes any more! I m sure you re looking forward to getting started. As an avid reader of ebooks, I ve always been annoyed at the fluff that many writers introduce into the material in the beginning and throughout. Therefore I ve left off Chapter 1 ( How I Went From Living in a Tiny One-Bedroom Apartment to A McMansion in 2 Short Years ) and Chapter 2 ( How to Motivate Yourself to Make Money in Real Estate ). Seriously though, I m going to cut to the chase and make this as easy and step-by-step as possible. Our goal is very simple: find unwanted property that we can immediately resell for a profit. We will be finding owners who are about to lose their property, purchasing the property, and reselling it for a profit. That s it; buy low and sell high at its simplest. Or maybe buy super-low and sell low would be a better description. We ll be looking to make $5,000-$20,000 on most deals, and occasionally get a whopper where we can make $100,000 or more. In case you re new to tax sale investing or real estate investing in general, let s talk a little bit about the tax sale process and how it leads to opportunities to acquire real estate for pennies on the dollar, without going to auctions and investing large amounts of money. Copyright 2012, Richard Dawson Page 4

Every state in the country has a process for handling real estate on which real estate taxes are not paid. Sometimes you ll even find that there is an alternate process for a certain city or county within your state. In all locations, it s safe to say that if an owner ignores the payment of his or her property taxes for long enough, he will lose the property and an investor or the local government will get a chance to purchase the property or otherwise take title away from the owner. In some states it takes several years of non-payment of taxes to result in a property being put on the sale list. And sometimes there is an additional time for the owner to bail out the property after the sale. We will be finding the owners who are at risk of losing their property, and buying it before it s lost. Your first job will be to look up your state s tax sale statute and to get a good understanding of the process. In most cases the statute will only be a few pages long, and you will only be paying close attention to the parts which concern us as DeedGrabbers (Chapter 1). Studying the statute a few times will give you a good idea how your state s tax sale process works, and you ll find the rules are usually pretty simple once you grasp them. It doesn t hurt to go to your local county tax office and talk to a clerk once you ve read the statute to make sure you understand everything perfectly. While you re there speaking with the clerk in the tax office, you ll also find out the date of the tax sales in the past or future that will give you the properties at risk of loss, and get a list of the properties (Chapter 2). Next, you ll update the owner addresses on file with the county and try to get a phone number for each owner. You ll do this by uploading the owner addresses you got from the county to a website that will return updated addresses and phone numbers if available (Chapter 3). Copyright 2012, Richard Dawson Page 5

Once you have the best information possible, you ll send letters to the owners of the property, letting them know about the tax sale of the property and offering to talk to them about buying the property (Chapter 4). Mail is all the contact you will need to do to make money. But if you want to double or triple your business, call or visit the owners as well (Chapter 6). You ll be offering to purchase the property for a small amount of cash-in-hand to the owner, and you ll take the property subject-to the back taxes, meaning you won t pay them off just yet (Chapter 7). Your contract will state that you can back out of the purchase agreement if you don t like what you find out about the property later, before or after you get the deed. Don t bother doing any serious research on the property until you have a deal penciled in with the owner! What do you say to the owner when they call or you call them? We ll talk about that in Chapter 5. After you ve struck a deal with the owner, you ll either close the deal immediately, or do some further research on the property. This will be covered in Chapter 8. Once everything looks good, you ll quickly prepare the paperwork and send out a mobile notary who will take it to the owner to get signed and notarized (Chapter 9). Now it s almost payday. Depending on the situation, we ll get the property cleaned up a bit and get rid of any junk on the premises. Then we ll get a Realtor out to the property and get it listed on the MLS. Or maybe you ll want to rehab the property or sell it on contract to someone. I personally like to cash out in as-is shape and move on to the next property (Chapter 10). Copyright 2012, Richard Dawson Page 6

Wouldn t it Be Easier to Just Invest Right at the Tax Sale? Right now you might be thinking it would be easier to be a tax sale investor than a DeedGrabber. Plus, you ve seen websites and infomercials that show the incredible bargains that investors have gotten at tax sales (the $286.12 house free and clear on TV comes to mind). If $286.12 for a free and clear house sounds exciting to you, I ll tell you first that I ve gotten deeds to houses for as little as $10.00, so you won t be missing out on super-bargain purchases. Not only is it more time-intensive to be a tax sale investor than a DeedGrabber, it takes a lot more cash and involves a lot more risk. If you buy liens or deeds at a government tax sale, you will have to research hundreds or thousands of properties when the delinquent list comes out, and assign a value you are willing to pay for each. Therefore you will have to know your market extremely well. You also may have to predict what properties may be worth years from now when you actually get title to them through a tax lien (more on that later). You will not be allowed to inspect the interior of any of the properties you re researching, and the actual address of the property may even be difficult to pinpoint based on the information in the list. After you have driven around the county until you re blue in the face, and attempted to assign a maximum value you are willing to pay for each property, you will then attend a sale with other bidders. If the county is offering a deed to the property (immediate ownership) you will be bidding against many other investors, many of which will likely bid the price of the property to near retail value. No money to be made there. If the county is offering a lien against the property, which you will use to try to get ownership of the property later, you will have to wait 1 to 5 years to acquire Copyright 2012, Richard Dawson Page 7

marketable title to the property, and along the way you will probably be paid off by the owner or a mortgageholder. I would estimate 95% or more of liens are paid off during the course of the tax sale process, resulting in no property acquisition by the tax sale investor. You are also risking that the property will sustain damage during the acquisition process, and will not be in the same condition as it was when you made your bid. Finally, there is potential for legal problems throughout. You will most likely have to hire a lawyer to send notices to owners and lienholders on every property lien you buy. And finally, whether you got a deed directly from a deed sale or acquired it through your tax lien, you will probably have to do an additional legal procedure called quiet title to get marketable title. The quiet title procedure is where owners and other interested parties love to crawl out of the woodwork and challenge your deed. I ve seen tax sale buyers invest up to $20,000 in additional legal fees to protect their deed from being overturned in the quiet title action. Contrast this with buying unwanted properties now, with little cash invested, and making immediate profits. Additional Tools Throughout this ebook I will mention many extra tools or publications that you can get to learn more in-depth about a particular topic, save you time, or get you to your next deal faster. You DO NOT need to get ANY of these extra tools to succeed at DeedGrabbing. I completed my first dozen or more deals without any of the tools I now use today, and offer on DeedGrabber.com and elsewhere. However, if you become serious about making money with tax-delinquent property, I can assure you that each and every one of the additional tools or Copyright 2012, Richard Dawson Page 8

information products I offer is a product I ve benefitted from myself, or possibly even had created for my own use at dozens or hundreds of times the cost I offer it for. Let s get started! Copyright 2012, Richard Dawson Page 9

Chapter 1 Learning the Tax Sale Procedure in Your Chosen State(s) Before you get started contacting owners and buying properties, you need to take a little time to learn how the tax sale works in your state. I recommend starting in your home county to learn the procedure your state uses to process taxdelinquent properties. As you begin DeedGrabbing you will see that it is quite easy to work in other states as well, even if they are far away. In general, your state will be a deed state or a lien state. A few states have both liens and deeds. The easiest way to get started is to go to taxsalelists.com and under the Resources tab, click Tax Sales. Then register for a free account. This site is geared toward investors who want to invest directly at the tax sale, not DeedGrabbers like us, but it also has a lot of resources we will use later. After you get your confirmation email, log in and follow the Resources -> Tax Sales procedure again. You ll find a map of the US that is color-coded to show which classification your state falls under. If you click on your state on the map, you will see a display on the left which will give additional information. So what is the difference between a deed state and a lien state? Counties in a deed state generally auction off delinquent properties at a periodic sale, and the winning bidder is awarded a deed to the property immediately. That bidder now owns the property, free and clear, and after doing some additional legal work, can sell the property or do with it as he or she wishes. This also means Copyright 2012, Richard Dawson Page 10

that the owner of the tax sale property loses it permanently if the taxes are not paid before the sale. In a lien state, the county only sells a lien against the property to recover the unpaid taxes. Unlike a winning bidder at a deed sale, the investor who buys the tax lien does not usually have any ownership rights in the property at that time the lien is purchased. However, after a certain amount of time set out in the state statute, called the redemption period, the investor can apply for a deed to the property. If the owner pays the taxes during the redemption period, the money the bidder invested in the lien is returned with interest, and the lien is released. We as DeedGrabbers are looking for what I call the Drop Dead Date for the owner - that is, the date that the owner will lose the property permanently. If the property is in a tax deed state, the Drop Dead Date will usually be the date of the tax deed sale. If the property is in a tax lien state, we first need to find out what the redemption period is in the state. Say the redemption period is 2 years; the Drop Dead Date will be 2 years after a tax lien against the property is sold. These are very general guidelines. Each state is different, and little details can matter. Here are some interesting variations I ve encountered in some of the areas I ve researched: Indiana and Washington, DC: Both issue tax liens against property, and have a one-year redemption period after which the tax lien holder can apply for a deed to the property. Indiana has a strict one-year deadline to redeem, and will not accept redemptions past the 365th day after the sale. However, Washington DC allows redemptions all the way until the court grants the investor his deed, which may be a significant time after the end of the redemption period, especially if the owner appears in court to ask for extensions. Florida: Offers liens as well, with a redemption period. However, at the end of the redemption period, the investor does not get the property. The property is auctioned at a tax deed sale which generates the money to pay Copyright 2012, Richard Dawson Page 11

off the lien. Therefore you would ignore the lien sales, which do not result in the loss of the property, and concentrate on the deed sales, which do result in loss of the property. Even though Georgia is a tax deed state, it is a redeemable deed state, meaning that even though the bidder at the sale gets a deed, it can be set aside if the owner pays the delinquent taxes within a certain amount of time after the tax sale. Therefore for our purposes it is more like a tax lien state because the drop dead date would be some fixed period of time after the sale. Texas offers redeemable tax deeds against property with a fixed redemption time. The investor who buys the deed can immediately evict the owner or occupant and demand rent even though he can be still be redeemed! This is not meant to be an exhaustive explanation of how all states tax sales work. You will have to read your state s statute carefully, and confirm with your county that your understanding is correct. What I ve tried to show here is that each state will have quirks that could be important to understand. Also, while you re at it, take note of the name of the governmental agency that handles delinquent property taxes. This could be known as the auditor, treasurer, tax collector, or something similar. If you re not inclined to read your state s statute, or you re having trouble understanding it, we ve written comprehensive state manuals for each state that show you the exact tax sale process from tax delinquency through tax foreclosure, show you each point in the process that lists can be obtained, and cover the state s freedom of information laws in depth. When you show up to get your list at the county office, having the exact law in hand, and knowing your rights to public information for that state, can make a huge difference. Get your state s manual at Copyright 2012, Richard Dawson Page 12

http://www.deedgrabber.com/statemanuals or pick up a 3-pack if you have a few different states you d like to explore. As you read through the statutes, or the state manual, all you have to do is put yourself in the shoes of an owner who will stop paying his property taxes forever. Ask yourself: When will his property be offered at some kind of sale? Will he lose his property right then? Will he get more time after the sale to pay, in the case of a lien or redeemable deed? How much longer? Will he be able to redeem all the way until the deed is actually issued or even beyond? Will the property appear on several lists once it becomes tax-delinquent, before the property is lost? When are those lists prepared? Let s look at the statute in my home state, Indiana. Tax Lien State Example I ve researched many states statutes and in every case I ve been able to find the statutes online. On the off chance your state s statutes are not online, go to the library and find the latest written version. I simply Google *state name+ code or *state name+ statutes. When I Google Indiana Code I get: Copyright 2012, Richard Dawson Page 13

There it is, right in the first position. Try to find a version where you can start at a root page and go deeper into the code by clicking on main headings. That s what we find on Indiana s main page. The main title under which the code is found is usually Taxation or Revenue and Taxation. When I go to the main page, I click on Title 6 ( Taxation ), then Article 1.1( Property Taxes ), then Chapter 24 ( Sale of Real Property When Taxes or Assessments Become Delinquent ). I notice that I ll want to read Chapter 25 also, Redemption of and Tax Deeds for Real Property Sold for Delinquent Taxes and Special Assessments. Copyright 2012, Richard Dawson Page 14

Your state may have the information listed first under Property and then Taxation. Search around these two key words until you reach a section about delinquent property sales. I ve included the important parts of the Indiana Tax Sale Code in the Appendix 1 so you can read along if you wish while we discuss the example. Or go to http://www.in.gov/legislative/ic/code/title6/ar1.1/ch24.html to view it online. To get our last-minute DeedGrabber list, we re not interested so much in the period before the property hits the sale list. Properties that are merely taxdelinquent are great to work on as well, which we ll discuss in the bonus section of this book. But for now, when we re DeedGrabbing, we ll let the county figure out which properties are delinquent enough to be offered at a sale of some kind. However, it s a good idea to read over the entire statute quickly to get a background on the process. We see that the county treasurer sends a list of delinquent taxpayers to the county auditor on or before July 1st each year, or 51 days after the tax payment due date, and that the taxpayer stays on the list unless he pays his taxes. This is the most preliminary stage in the tax sale process. The next few sections describe ways that the taxpayer can be taken off the list, and prescribes noticing that the county must do to each taxpayer on the list. Then IC 6-1.1-24-4.7 states that after the notices are made, the auditor must apply for judgment and order of sale of the property. The next section, IC 6-1.1-24-5, describes the conduct of the sale. This is important because it will state the terms of the sale. Subsection (e) states: The county treasurer shall sell the tract or real property, subject to the right of redemption, to the highest bidder at public auction. Copyright 2012, Richard Dawson Page 15

So, we know that there is a right of redemption for the properties that are sold. The rest of the chapter discusses technical details which generally affect people participating in the sale. Now we ll look at Chapter 25 to see how redemptions work, and learn how a tax sale buyer can eventually get a deed to the property. IC 6-1.1-25-2 describes the calculation of the amount needed to redeem the property after it is sold. You will usually just call the taxing body when you have a deal and have them tell you the amount needed to redeem. However, it s useful to have an idea how it works so you can estimate the amount while you re dealing with an owner. IC 6-1.1-25-4 is really the meat of the statute for DeedGrabbers. We see that liens not sold under special circumstances have a period of redemption of 1 year from the time of sale. Other liens, usually those that were not sold at a previous sale (leftovers), or acquired by a government body, only have a 120 day redemption period. From experience, I can tell you that liens or deeds that are not sold the first time they are offered are usually on worthless properties. Therefore we ll concentrate on the liens that were sold the first time they were offered, which carry a one year redemption date. In IC 6-1.1-25-4.5, we see that the tax lien buyer is entitled to a deed if the redemption period has expired, and they have given the proper notice to the owner and other interested parties in the property. Since the redemption period is 1 year for the liens we re going to research, we know we must add 1 year to the date of our county s last sale, and then we ll arrive at the drop dead date for the property offered at that sale. Other counties in the state may have held their sales on different dates, so we must remember to recalculate the sale date for each county we want to research. Copyright 2012, Richard Dawson Page 16

As we touched on earlier, Indiana, as well as most other tax lien states, issues a deed some time after the redemption period ends, and this can be many months after the redemption period. You will want to search your state s code to see if it allows for redemptions after the redemption period ends but before the deed is issued. Indiana is strict in not allowing redemptions of any kind after the redemption period ends. Washington DC allows redemptions after the redemption period but before the deed is issued. If you find out that your state allows redemptions after the redemption period, you will know that you have additional time to work with an owner to buy their property, even after the redemption period ends. I ve researched Indiana, and I ve found court cases on Google that have upheld that redemptions may not be made after the deadline, and judges are not able to grant any kind of redemption extension. You would do well to call a couple counties in your state and ask if they ve ever heard of anyone being able to redeem properties after the deadline, even if you don t find such a provision in your state s code. Tax Deed State Example If you re going to work in a tax deed state, your homework on the statute will be much easier in most states. The delinquent property is placed on the tax deed sale list, and if the owner does not get the property removed from the list by paying the taxes or taking advantage of some other provision in the statute, and the property sells at the sale, they lose the property. Therefore you will simply obtain the tax deed sale list, and the date of the sale is the drop dead date. Copyright 2012, Richard Dawson Page 17

However, in some states, including Michigan, Wisconsin, New York, and several others, the county forecloses the property PRIOR to the tax deed sale. So if you get the tax deed sale list, all properties on that tax deed sale list will already be lost by the owner to the county. In states where the county owns all property that is offered at a tax deed sale, you will need to read the statute to see when a final foreclosure list is prepared prior to the tax deed sale, and obtain that. One thing you will want to look for very carefully in the statute is a provision that allows the owner to redeem the property after the deed is issued. These states are referred to as redeemable deed states and operate much like a tax lien state for our purposes. Let s look at Georgia s statutes for an example of this. Google Georgia Codes. The first item in the listings says Georgia Unannotated Code General Assembly Search. Bingo. Actually, this takes us to a search page. I ve had a hard time using search boxes to find the codes, so I m going to look for the entire Georgia code. It s right under Legislation -> Code of GA. I see a heading for Revenue and Taxation, and when I click on that I see Tax Sales right in chapter 4. Article 1 looks like a good place to start. Article 1 (48-4-1) states that the property shall be sold in the same manner as provided for in executions and judicial sales. Further, 48-4-6 states that the validity of the deed shall be the same as that from an execution sale from a superior court. So far, it sounds like the sale is final. But when we keep reading on to Article 3, we see that 48-4-40 states: Whenever any real property is sold under or by virtue of an execution issued for the collection of state, county, municipal, or school taxes or for special assessments, the defendant in fi. fa. or any person having any right, title, or interest in or lien upon such property may redeem the property from the sale Copyright 2012, Richard Dawson Page 18

by the payment of the redemption price or the amount required for redemption, as fixed and provided in Code Section 48-4-42: (1) At any time within 12 months from the date of the sale; and (2) At any time after the sale until the right to redeem is foreclosed by the giving of the notice provided for in Code Section 48-4-45. So we see that there is actually a redemption period of 12 months, and possibly more if the giving of notice in part 2 is not done immediately after the 12 month period. Finally, we see in 48-4-43 that: When property has been redeemed, the effect of the redemption shall be to put the title conveyed by the tax sale back into the defendant in fi. fa., subject to all liens existing at the time of the tax sale So even though Georgia issues tax deeds at the sale, you will add one year to the sale date to come up with the drop dead date, and if someone contacts you immediately after the one year redemption, you could see if there was still a chance to redeem due to the notice not being sent yet. Other Ideas to Research Your State Reading your state s code is the best place to start when researching your state. But sometimes the code is a little tricky to translate into practice. Consider these additional resources and ideas: Pose as a tax sale buyer, and look for print and website information in your state that explains the tax sale to prospective tax sale buyers. Tell the tax clerk you re considering investing in the next tax sale and ask if I buy a tax lien at this tax sale, when is the owner s absolute last chance to pay me off? Or if Copyright 2012, Richard Dawson Page 19

you re in a deed state: If I buy a deed at this sale, is there any way the owner can still pay the taxes off at a later date and cancel my deed? The tax clerk is used to answering tax sale buyers questions and should be able to explain to you when you can be assured you would be able to get a deed to the property if you were to buy at the tax sale. Then you will know the drop dead date for an owner. Once again, DeedGrabber.com offers state manuals for every state that break down all the codes for tax delinquent property, tax sale property, and your public records act and quote the actual law with citations, so you can t be turned down at the tax collectors office. They re available at http://www.deedgrabber.com/statemanuals. At this point, we ve done our homework and we know when an owner loses his property after it enters the tax sale process. The next step is to find out who is on the verge of losing their property. Copyright 2012, Richard Dawson Page 20

Chapter 2 Obtaining or Making a List of Properties Subject to Loss at Tax Sale Now that we ve figured out how to determine a drop dead date for our state, we need to obtain or make a list of properties and owner names/addresses that are at risk to be lost at tax sale. By now, you have determined if you re working in a state with absolute auctions (tax deed state) or a state that allows redemptions after the sale (redeemable tax deed or tax lien). Most, if not all, states have a liberal public records access law. These laws generally allow for all records held by counties to be inspected and copied by the public. There are exceptions for private information such as medical records, social security numbers, and the like, but these don t concern us. You may want to Google your state code and read its public information access statute. I ve run into quirks with these too. South Carolina, for example, prohibits release of any record for the purpose of marketing or selling a consumer product or service. You would have to be prepared to carefully explain that you are not marketing a product or service but actually offering to buy property, and not subject to the law. You will also want to be familiar with the public records statute if county officials give you trouble with your requests. More on that later. Tax sale records are most certainly public and obtainable. We ll start with the easiest type of record, those from tax deed states. Copyright 2012, Richard Dawson Page 21

Tax Deed States You will have absolutely no problem obtaining sale lists in states with tax deed sales. This is because the counties in the state have to make the list easily obtainable for bidders who want to attend the sale to buy property. A good portion of counties in these states publish the lists online free. Florida, for example is especially good in this area. If you do a Google search for *florida county name+ florida tax deed you will easily find sale lists online in nearly every county. Most even have direct links to the assessor s page so you can check out the property information. If you re working in a state with good online access like this, you ll go through the list and take down the property address, owner name and address, and the amount of taxes owed. If you wish you can even take down more information like assessed value which could give you a very rough estimate of the property s value. You can also go to the county in person a month or two before the sale and likely get a written list. Call the office that deals with tax-delinquent property and ask when the list will come out for an upcoming sale. Taxsalelists.com is a very valuable free resource when you re looking into tax deed sale dates. Just log in and click on your state and you can see all the counties having tax deed sales in the near future. If nothing else, it s a great way to quickly determine sale dates throughout your state. Though the site is geared toward tax sale purchasers, you can purchase most lists inexpensively, already typed into a spreadsheet. Consider how much time this might save you, if you otherwise would have to manually transcribe or obtain the list in person. Copyright 2012, Richard Dawson Page 22

The site also sells enhanced lists which contain detailed property information for each property on the list, at a premium price. You may want to purchase these to quickly sort properties by property value before you begin working on them. Before you buy any lists on the site, however, see if your county has one free online. Be aware that the site may not have an exhaustive list of sales in your area, so call any counties you re interested in and see if the site might have missed their list. Finally, the lists may not have owner names and addresses listed. You can also go back in time up to two years on the site and see when previous sales occurred to get an idea when the next sale might be coming up. Of course, these old tax deed sale lists are of no use to you because all of the properties would have been lost or redeemed by now. Tax Lien States The process for making your list in a tax lien state is much different than simply obtaining a list of properties about to be auctioned. A list for an upcoming auction for tax liens will be way too new to use; we want a list from a past sale, where the redemption deadline is approaching on the properties. We also want to know which properties actually had enough value to sell at the sale. You ve already determined the length of the redemption period for your state, and you ll want to go back to a sale that occurred in the past, slightly less time ago than the redemption period. For example, if the redemption period in your state is two years, you ll want to look at a tax lien sale that occurred 12-23 months ago. This way the owners who had a lien sold against their property have 1-12 months left to redeem the property. Copyright 2012, Richard Dawson Page 23

This will be more involved than working in a tax deed state, and may be the most time-consuming part of the entire process. But it will be well worth it. Here are some reasons why: Because there is a tax lien sold against the property, this means that a tax sale buyer thought the property was worth at least as much as he paid for the lien, and probably much more. This automatically eliminates all of the worthless properties that you would have encountered on a tax deed list. A significant amount of time may have passed since the tax lien was sold, and the property still has not been redeemed. This is a strong indicator that the owner is unable to pay the taxes, or is not terribly interested in saving the property. This makes the owner a good candidate to sell the property to you. Since you wait until near the redemption deadline, you ll avoid wasting your time with people who can and will ultimately redeem without you. You will find much less competition DeedGrabbing here because hardly anyone goes to the trouble of going through this multi-step process. To get started, log onto taxsalelists.com and look at the past tax lien sale lists from your county or elsewhere in the state. The default lookback period on the site is 3 months; change the drop-down box setting to 2 years. Now look back to some sales that, when you add the redemption period, are nearing maturity. Take note of the dates and locations. If your redemption period is more than 2 years, you ll have to find out the older sale dates at the office of the governmental body who conducts the sale. Now you re ready to visit this office and start putting your list together. Copyright 2012, Richard Dawson Page 24

A Note on Governmental Employees at Your Tax Office I m sure we all love governmental employees, but to some extent you may find that some live up to their reputation as being bitter and uncooperative when you request records. After all, you re asking them to do extra work for you that they wouldn t have to do if you hadn t shown up. Especially in larger counties where the employees may perceive themselves as overworked, you could encounter resistance. If this happens and you have not mastered your state s public records access law, now is the time to do it. You should find that your law provides for reasonable access to records, though you may not be entitled to immediate access if the request is considered too labor-intensive for the employee to carry out right then. You may only be able to view records and write down the information you want. This makes it even more likely that you ll be the only one DeedGrabbing in this county. You may be required to specify your request with exact particularity. In other words, you may be forced to write on a form exactly what you re looking for, and come back later to retrieve or view the records. Keep in mind that the records you re about to request are not something the office may be used to providing. Also, in most states the employees are not required to spend time compiling lists for you that do not already exist. This is OK because when you re given access to the right records you ll make your own list. Above all, try to be polite and explain what you re looking for nicely to the employee, and be persistent. If you can t get anywhere, try going to another nearby county and see how things are done there. Then you ll be in a position to better request what you re looking for in your home county. Also keep in mind that the employees in the delinquent tax office may be verbally assaulted daily by homeowners who are losing their properties, and the Copyright 2012, Richard Dawson Page 25

employees may have dealt with scammers in the past that have lied to homeowners about the status of their properties and essentially stolen them while there was still time to redeem them. This may make them wary to provide you the records, but keep in mind that dishonest actions of others do not diminish your rights to public records access. Finally, if the clerk is completely uncooperative, make an appointment with the head of the department or a superior, and have the public records law in hand. Make them explain to you why you will not be given access to the records, and report them to the state if they don t give you a good answer. With my rant on tax sale clerks complete, I ll say that the vast majority of clerks will give you access to what you want, and some will be very helpful. When you encounter a helpful one, make sure to ask all of the questions you have about the recordkeeping process. You can then use that knowledge at other counties. What to Request You simply want the sale results of the tax lien sale that occurred on your target date. Some state statutes will specify where this information is recorded. For example, Illinois statute says that all tax sale records are to be kept in the Tax Sale Judgment Book, and that any redemptions are to be noted there as well. So when I go to a county in Illinois, I simply ask for the Tax Sale Judgment book from about 2 years ago (they have a 2 ½ year redemption period), and I write down the properties that sold back then without any note of a redemption. These will be about six months from the end of the redemption period. In Indiana, by visiting a few counties I learned that each keeps a sectioned binder with their tax sale information. When properties sell at the sale, a one-page Copyright 2012, Richard Dawson Page 26

record for each property is put into the SOLD section of the binder. Then when one redeems, the clerk moves the record to the REDEEMED section. Therefore I come in and request copies of the entire SOLD section these are the remaining properties that have not redeemed. Since Indiana has a one-year redemption period, I note the dates of the previous sales in the counties I m interested in, and I show up about 9 months after the sale to get the remaining records. Later I saw that Indiana code also specifies what is to be kept in the way of records, for each tax sale, hence the binder I found in each county office: IC 6-1.1-25-8 Tax sale record Sec. 8. Each county auditor shall maintain a tax sale record on the form prescribed by the state board of accounts. The record shall contain: (1) a description of each parcel of real property: (A) that is sold under IC 6-1.1-24; (B) on which a county acquires a lien under IC 6-1.1-24-6; or (C) for which a certificate of sale is purchased under IC 6-1.1-24; (2) the name of the owner of the real property at the time of the: (A) sale; (B) lien acquisition; or (C) certificate of sale purchase; (3) the date of the: (A) sale; (B) lien acquisition; or (C) certificate of sale purchase; (4) the name and mailing address of the: (A) purchaser of the property and the purchaser's assignee; or (B) purchaser of the certificate of sale; (5) the amount of the minimum bid; (6) the amount for which the: (A) real property; or Copyright 2012, Richard Dawson Page 27

(B) certificate of sale; is sold; (7) the amount of any taxes paid by the: (A) purchaser of the real property or the purchaser's assignee; or (B) purchaser of the certificate of sale; and the date of the payment; (8) the amount of any costs certified to the county auditor under section 2(e) of this chapter and the date of the certification; (9) the name of the person, if any, who redeems the property; (10) the date of redemption; (11) the amount for which the property is redeemed; (12) the date a deed, if any, to the real property is executed; and (13) the name of the grantee in the deed. So in the case of the state of Indiana, you see that you need to visit the auditor, who is required to keep the records of each tax sale as shown above. As you can see, everything you could possibly need to identify the property, lien sales price, and owner s name and address can be found in this record. If you re unable to find such an easy recordkeeping system in your state, you re not out of luck. The thing to remember is, the county must have had some record at the time of the sale of what sold, and for how much. Your job is to find that record. You may have to explain this concept to the clerk to get his or her juices flowing. If you re fortunate, that same record will also show who has redeemed. You ll be ignoring these redeemed properties and noting the properties that are still active. At worst, you ll have to check each property that sold individually to see if it was redeemed. It may be labor intensive but the good thing is you ll only have to do it once for each sale. We ll talk later about contacting owners, but I ll say now that in certain circumstances I spend a lot of time looking for a particular owner. If you decide to do the same, you ll want to keep the records you get current. This means Copyright 2012, Richard Dawson Page 28

returning to the county with your list of unredeemed properties and crossing off the ones that have redeemed since your last visit. One failsafe method to get what you want, but possibly very time consuming, is to buy the tax lien list for the past sale from taxsalelists.com, and check each property at the county for a tax sale or redemption. Surely the county can tell you if a specific property was sold, and whether it was redeemed. Only use this method if you have hit a wall with the other methods above. Here are the items you want to come away with on your list: Owner name(s) and address Property Address Parcel/Key Number of Property (This is a tracking number the county uses) Minimum Sale Price (all states) / Actual Sale Price (certain lien states) Most counties now have online property information. If you can obtain owner name and address and property address online using the parcel number, you may just want to jot down the parcel number and sale info and look up the owner information at home. This is only if you can t get copies of complete tax sale records like in the Indiana example below. If you were able to get detailed printouts for each property, like I do in Indiana, be sure to save these in a folder. If not, you will be able to get any additional information you need later. Indiana Example In Appendix 2, I ve included a sample tax sale record from the SOLD folder in Indiana. Note that is contains all of the information above, plus other good info Copyright 2012, Richard Dawson Page 29

Chapter 3 Enhancing and Editing Your List Now you have a list of owner names and addresses, as well as property addresses or descriptions. If you weren t able to get your list in an Excel spreadsheet to begin with, the first thing you need to do is to type the tax sale list information into such a spreadsheet. If you don t have Microsoft Office, you can download OpenOffice, which is free and nearly identical to Microsoft Office, at www.openoffice.org. Make a separate heading for Owner Name 1, Owner2, as well as Owner Address, City, State, and Zip. Then put any other information you collected in further columns. Owner 1 Owner 2 Address City State Zip Parcel Number Property Address Amount Owed Rick Smith Dee Smith 123 Main St Reading PA 43983 403942830 123 Elm St $1232.49 Besides the columns shown above, ideally you will have an assessed value for each property, broken down by land and improvements. Most spreadsheets from taxsalelists.com, unfortunately, do not have the owner name and address provided. This is because the list is meant for tax sale auction buyers who are not concerned with the owner addresses. Most spreadsheets obtained directly from the county DO have the owner s name and mailing address included, so that s one advantage of going straight to the county. Copyright 2012, Richard Dawson Page 31

If Your List Doesn t Have Enough Information At a minimum, you will need the owner s name and complete mailing address, as well as parcel number for the property. You should also really have the property address for easy reference (if the property has an address), and the amount of back taxes owed. Optional items that can help you target your list better are assessed value, broken down into land and improvements, square footage of the improvements, and property type. While not necessary, these optional items can help you eliminate properties that you don t want to pursue right up front. Most counties have an assessor s/treasurer s/appraiser s website where you can look up any additional information you desire for each property. I would probably not spend the time to get the optional items manually from the county website, but for obvious reasons it s essential to have the complete owner address information, and some lists may not contain this. For the first year I pursued tax sale property, I typed in the information to my spreadsheet as shown above, and spent hours manually getting additional information from my county website. And that s still the way you may want to do it while you re getting started, or if you re on a tight budget. This is also something a helpful family member could do for you to chip in, or you could find somebody on Craigslist who wants to work from home doing this for you (for as little as $6.50 per hour). One extremely helpful (though not inexpensive) tool I found a few years ago is a software program called Internet Macros. It has saved me literally hundreds of hours over the last few years eliminating typing and researching properties. Internet Macros takes a list of parcel numbers, and automatically types in each parcel number on the list into your county s website. Then it saves all the information you want for each property into a spreadsheet for you. Copyright 2012, Richard Dawson Page 32

So, now when I get a list of properties, I only type in the parcel number and the delinquent amount into a spreadsheet. The program then goes to the county website and enters each parcel number and pulls the owner name and address, assessed value, and sometimes dozens of other property details that I wouldn t mind having at hand. To use the program, the county you re working on must have a website where the information you want is available by typing in a parcel number. If you d like to get the IMacros program to speed things up, go to http://www.deedgrabber.com/imacros. I made a demonstration video there to show you exactly how it works, and you can get it right on my site. Anyone who gets the software through my site gets my office setup manual for the program as well as ½ hour personal setup assistance from me. What to Do After You Have Your List Complete in Excel Usually, most last-minute DeedGrabber lists have only a few dozen to a few hundred properties in any given county. But some of my lists in large counties like Cook County, IL have had over 1000 properties on them. Regardless of the size of your list, you may want to eliminate some of the properties based on the property information you have, before you go further. Most lists, for example, contain some properties that are assessed for a very low amount. Your opportunities with those properties, even if you could acquire them for free, would be limited. I certainly eliminate properties assessed at less than $1000, and in most areas I only work on properties that are assessed at $10,000 or more. Don t automatically use this guideline, because assessed values are not consistent around the country. In some areas, valuable properties can be assessed at $5,000 or less. In other areas, you would want to make your floor $20,000. Spend a Copyright 2012, Richard Dawson Page 33

little time on your county s website seeing what the lowest assessed-value properties on your list look like. As soon as you begin seeing properties that have buildable lots, houses, or land with acreage, you ll know about what your bottom limit on assessed values should be. A lot of lists contain some junk land on them. By establishing a floor you ll save yourself time and money by avoiding these properties. You also may want to take this opportunity to eliminate certain property types that you don t want to buy. For example, I always eliminate industrial properties at this point. If you aren t interested in land, you may even want to eliminate all land. Preparing Your Final List We ve made our list a little more lean and mean by trying to get rid of some of the junk. You can just go ahead and mail to list at this point, but as we ll discuss in an upcoming chapter, you ll do a lot more deals if you call the owners on your list as well, and mail to new addresses if they have moved. If you have a small number of properties left on your list after you narrow them down, and/or there is a very limited amount of time until the owner loses the property, you should consider one of these options to get updated addresses and phone numbers. If you have a large list, and some time to receive back undeliverable mail (which we ll discuss later), you might just mail to the list now. Copyright 2012, Richard Dawson Page 34

Options for Getting Phone Numbers and Updated Addresses Option 1: (Free) You can try to manually obtain phone numbers for the owners on your list using the internet. The best free site I ve found to locate owner phone numbers is www.zabasearch.com. However, as with most free sites, it can be difficult to isolate the owner s name if it is a common name, and phone numbers may only be available if the owner still resides at the address the county has on file. Option 2: (About 25 cents per record) There is at least one publicly available website I m aware of (w3data.com) that will take a spreadsheet of names and addresses, and append (add on) the best known phone number for that person. The site also claims to add new addresses for each record but since the publishing of the first edition of Go Ahead, Be A DeedGrabber, I ve found that they have rarely, if ever, provided useful updated addresses. However, w3 data is a very economical source of quickly getting phone numbers without having to manually type each search in. You just upload the names and addresses from your spreadsheet to them, and they return the phone numbers, if any, alongside. To use w3data, make a new spreadsheet with the following headings: First Name, Last Name Address1 City State or Province Zip or Postal Code Then copy the data from Owner 1, Address, City, State, and Zip from your original spreadsheet into this new spreadsheet. Insert a comma in between all owner names to separate first and last name. Save as an Excel file or a.csv file. You can Copyright 2012, Richard Dawson Page 35

choose the format when you save the file. Full instructions are available on the site. Now go to https://www.w3data.com/list-update/upload_file to upload your list. You will get a spreadsheet back with any new addresses or phones. You can also take all of the names from Owner 2, Owner 3, and Owner 4 and do the same procedure to get updated addresses and phones for any additional owners. What you will then do is make another file similar to the one you uploaded, only WITHOUT the commas in the name. Then for any owners where a new address came back, insert a new row, insert the name again, and insert the new address you just got. You will use this later for mailing. This way when you mail to the owners you will have multiple letters going out to some owners who show multiple addresses. Copyright 2012, Richard Dawson Page 36