Traditionally, if you want to purchase a property, you have to save up the money for a down payment or get it as a loan from a bank. In this episode, I talk to my friend Mike Wolf on how you can acquire property through tax deeds.
Throughout his 31-year career in the real estate space, Mike has used every strategy known to build his portfolio. Using tax deeds to acquire property is the quickest route to owning a property.
Something that is most suitable for Canadians looking to purchase real estate in the U.S., as the Canadian foreclosure rules are vastly different than south of the border, tax deeds guarantee you another home or property in your portfolio.
There are many different types of tax deeds. The most common one, as Mike says, is you go to an auction to bid on the property and if you’re the highest bidder you get the home free and clear of any mortgages or liens on the home. The counties are expecting a profit from these sales. The auctions are set to pay off the taxes that the previous owner didn’t pay, that amount being the opening bid.
Make sure that when you are bidding on a property that you know what will be passed down to you other than just the home, as there are some exceptions with mortgages being left on the property when the home is brought to auction.
Another type of deed is a redeemable deed, which is only available in four or five of the 50 U.S. states. A redeemable deed is one where even after you’ve won it at the auction, the previous owner of the home has a window of six months to buy their old home back from you. However, because of the deed, the previous owners would have to not only pay the amount you did at the auction but an additional 25% premium, as well as any eligible expenses that are required to make the home safe. Even if you’re still waiting on whether the previous owner will buy the home back or not, you can still live in the home, rent it, or possibly flip it. Either way, you have acquired a home at pennies on the dollar with no mortgage to your name.
For more information about Mike and how he makes this strategy work for not only himself, but the many investors he teaches, go to www.MikeWolfMastery.com.