Hey everyone! After binging as much content as I possibly can (you all have been very helpful without even knowing it!) I want to jump in and try to get my first deal.
I am considering an approach that I haven’t seen covered, and want someone to stop me before I do something stupid!
The state I’m in is a tax lien state, but the county I’m looking at does both tax lien sales and they have “county-owned properties” that I can buy. They told me the minimum bid is almost always accepted (no competition really), and the amount is based on the last appraised value.
However, the most recent sold comps I pull in zillow show similar land going for about 2-2.5x what the county is selling it for.
Seems like an easy win that lets me skip the mailers for now while I don’t have much capital, and should let me get my feet wet. Any red flags I should be aware of here?
They told me the minimum bid is almost always accepted (no competition really), and the amount is based on the last appraised value.
(Note: I would question what they mean about “last appraised value.” They probably mean assessed value, which is not an appraisal.)
However, the most recent sold comps I pull in zillow show similar land going for about 2-2.5x what the county is selling it for.
If both of those statements are true, then you probably can avoid mailers altogether.
The issue you’ll probably find is, those statements aren’t both true, or at least, there are some very big caveats to both of them.
These things have a lot to do with size, location and desirability. If you’re talking about trashy, 0.1 acre lots in the middle of nowhere, then you probably won’t see as much competition. But if you’re talking about a beautiful 20 acre tract with sweeping views, you’ll never get that thing at the minimum bid amount.
These are vacant lots in a subdivision, with utilities on the street, about 0.5 acres each, selling for about $4-5k. Sold comps seem to be going for about $8-12k for the same-sized lots in the same subdivision. It’s definitely a tiny little town, but there are comps.