Thursday, May 14, 2015

Tax sale was a bust !

     Well me and my son attended the Blount county tax sale yesterday. We had a short list of 6 properties that we wanted to bid on . All but one was empty lots the one had an old mobile home that was in teardown condition/salvage . The highest tax bill was 145$ most were around 95$ each . We left with high hopes of being able to make a claim on up to 4 even if we had to pay a premium on a couple . A premium is anything above tax that the county gets but doesn't have to pay interest on .

      OK I am no expert but say a property has a tax and cost of 100$ but sells for 300$ . On the 100 you earn 12% from the property owner or 1% per month but the remaining 200$ earns ZERO . So on a couple I was prepared to pay 4 times the tax  and write the premium off if we got a deed in 3 years or make a 3% return on the amount if it was repaid . Ok that was my plan .

      When we got to the court house to register there was about 20 others waiting . Of the crowd I knew 5 to be multie millionaire's at that time and told my son 2 were going to picking and choosing what they bid on the other 3 would be looking for cheap places to park money. At this time I felt confident . By the time of the auction we were seated in the room with 12 millionaire's  5 attorney's and 5 representative's of investment groups and trusts. A total of 35 bidders and only 98 property's .

       Well when the bidding started I found out that there was a lot of money that these men were willing to park with the county for low return . Most of the parcels went for 8 to 12 times the tax owed  or less than a 1%  return . A few went as high as 20% of appraised value. Most of what we had come to bid on went for 6 to 8 times the tax owed . The one with the old trailer went for 1150$ which was 8 times tax  and 15% of appraisal.

      Looking back maybe I was to frugal and cheap with what I had planned on spending or the % of reclaim is such that these premium's are justified . Next year I will attend again and be prepared to select 2 to gamble on . Three years ago a friend picked up 6 liens 4 for tax only 2 with less than 100$ premiums each and got title to 2 this year. That year there was no money there. This year I know I saw 5 men all worth 20 million plus and that don't count the investment groups.

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