Can You Buy Government Tax Sale Properties For Profit?

Can you buy government tax sale properties and make a profit?  Why not?  Others do it every day.  But can you buy government tax sale properties and make a quick turnaround for profit?  Maybe, but probably not.  Government tax sale properties are properties that the government puts up for sale because the homeowner did not pay the taxes on it.  The government will typically try to sell the tax lien certificate to an investor who then needs to try to collect the back taxes from the homeowner.  Only after the homeowner fails to pay the investor can the investor foreclose on the property and then sell it. 

But, can you buy government tax sale properties that have already been foreclosed on?  Sometimes the government will go ahead and foreclose on the property and put it up for auction.  The reason for this can be that they were unable to sell the tax lien certificate or because they determine that foreclosure is the necessary step to be taken.  Regardless of the reason, the property is sold at auction to the highest bidder.  Can you buy government tax sale properties and resell them right away?  That depends on several things.

If you are asking, “Can you buy government tax sale properties for a quick turn around?” then you may want to look to a different source for property investment.  Once the government tax sale property has been foreclosed on and then sold the tax that is owed may not disappear completely.  There may be other liens on the house that must be paid as well.  If the federal government, such as the IRS, is due taxes then there is a period of 120 days in which the IRS can seize the property, even if you have purchased it already. 

Can you buy government tax sale properties from the IRS?  This is a possibility.  If you buy government tax sale properties from the IRS after they have foreclosed on the homes, then chances are the titles are free and clear of all liens.  It is a good idea to find out these details before bidding on a property, however.

How can you buy government tax sale properties for a quick profit?  You can buy tax lien certificates on a tax sale property and try to collect the taxes from the homeowner.  In this case you can attach a fee of about 20% to the amount owed, which would be your profit.  How quick you make your profit, however, depends on how quickly you can collect from the homeowner.

So, the question remains, can you buy government tax sale properties and make a profit?  Yes, you can, as long as you know the facts.
 

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