Tax deeds are one of the best ways for an investor to purchase a cheap home and make a substantial profit right now. Homes are purchased for pennies on the dollar for back taxes owed by the former owner plus the fees and costs associated with the tax defaulted sale. When a Victorville, CA homeowner does not pay their property taxes, the county will auction the tax defaulted property after five years for sale at a public auction to the highest bidder for cash. The former property owner has a year from the date the tax deed is recorded to redeem the property through a court action. Title is unable to be cleared during this time so it is advisable if you purchase a tax deed property, you wait until the one year period has passed before making any substantial improvements to the property.
Advantages and Disadvantages
Purchasing tax deeds in Victorville is very profitable because property taxes are only a very small portion of a property’s value. For instance, if the property taxes are 1% of the assessed value and the home is worth $200,000, then you are purchasing the property at a very deep discounted price. You just need to do your due diligence and hire a real estate attorney to make sure there are no liens. Properties are sold as is. Otherwise, that deep discount could be eaten up in repairs and paying off liens. Since tax deeds are so profitable, there is a lot of competition to purchase them right now. You have to follow the county’s rules, and there is no guarantee that the former owner will not redeem the property. Also, if there is a first lien on the property, lenders will usually purchase the property and pay the tax lien off. If a property is an FHA property, FHA has one year to redeem the property. However, if you are the lucky bidder whose bid gets selected to buy a tax deed defaulted property, you are getting a property with a substantial built in equity.
How it Works
Victorville tax deed sales are advertised in the local San Bernardino newspaper. You can also contact the San Bernardino county tax assessor’s office to find out more information about the sale date, property address and auction rules. To find information on recent homes sales in the area, you can check with a local Realtor, online websites or the county recorder’s office. Payments for the tax deed must be paid within five business days after the sale with a cashier’s check or certified check, cash or by wire transfer. There is a $.055 document transfer tax for each $500.00 of the sales price that you must pay also. The buyer is given a tax deed which conveys title to the buyer. The buyer is responsible for paying any liens or special assessments.
Victorville properties tax deeds are terrific bargains as long as you investigate the property and understand the risks that are associated with purchasing tax deeds.