5 Reasons Why You Should Participate in an Online Tax Sale Auction

This March, over 2,000 tax defaulted properties in eleven California counties are slated for online auction, which makes now the perfect time to start investing in tax sale property.

Interested in investing in tax foreclosures and seized property, but unsure of how to get started? The easiest way to start is through an online tax sale auction. Bid4Assets.com hosts online tax sales for over 50 counties throughout the United States.

Registration on Bid4Assets is free & easy and the only bidding requirement is a fully-refundable deposit, generally due a few days before the auction begins, and is either applied to your winning balance or promptly refunded by check.

Participate from the comfort of your home or office

• Skip the drive to the crowded county courthouse or convention center. All you need to participate in an online tax sale is a computer or tablet and an internet connection.

More time to research the properties that you're interested in

• Rather than placing blind bids on property at a live auction, the auction information for tax sales is generally available on the Bid4Assets website several weeks before the auctions start, allowing time to thoroughly research and make informed decisions about the homes and land being offered
• Stay informed with tax sale email alerts, which notify Bid4Assets subscribers when an upcoming tax sale has been posted

Save thousands of dollars when you buy at online tax sale auction

• In general, the minimum bid price on a property auction is set at the amount of delinquent taxes, fees and other expenses owed to the county by the previous owner
• Therefore, property valued at thousands of dollars can be won at online tax sale for literally a fraction of the assessed value, or "pennies on the dollar"
• In most cases, any existing back taxes or mortgages are wiped out when the property is transferred to the winning bidder

The online auction experience is fun and exciting!

• Online auctions allow you to challenge yourself and exercise your competitive edge
• Unlike other auction sites, Bid4Assets county tax sales have no reserve price that must be met. Popular and high value tax sale auctions often extend into periods of overtime bidding, which is extra competitive and exciting
• Don't bid over your budget! buyers should be prepared to set a bid limit and be careful to not get carried away by the excitement of the online bidding process

Use the online auction model to maximize your return on investment (ROI)

• Want to flip your tax sale property for profit? Use the Bid4Assets online auction platform to sell your newly acquired investment
• Design your auction, set your minimum bid/reserve price and watch the bids roll in
• Nearly 100,000 properties have been sold on Bid4Assets via the online real estate auction model

3 Risks Involved with Purchasing a Rental Property

Becoming a landlord is looking more and more attractive with rental property functioning as a long-term, stable source of income. Nearly 4 million families have become renters in the past year, with rent prices rising rapidly.

However, there are several obstacles that explain why not everyone rushes to fix up and rent out properties in distressed markets. Here are some important risks to consider before starting a portfolio of rental property:

1. Rental property requires initial investment and doesn’t guarantee a quick return

• In addition to a down payment, monthly payment, mortgage interest and other purchase fees, considerable time and energy may be required to get your investment off the ground
• Consider the total purchase price, maintenance costs, management fees, HOA fees, property taxes, as well as the monthly rental cash-flow, and always Calculate the ROI (Return on Investment) before signing any checks
• Your rental property could quickly turn into a negative cash-flow “money pit” if payments and expenses exceed the monthly rent

2. Maintenance may be required before the property is considered “rent ready”

• Depending on the property age and location, your new single or multifamily home may not be in turnkey condition at the time of purchase
• In distressed markets, such as Detroit, Cleveland & Chicago, where the unemployment rates are high and the incomes are lower, vacant properties may be stripped of appliances, copper pipes and plumbing.
• Unless a property is completely turnkey at the time of purchase, necessary maintenance may range from light cleaning and dusting to heavy rehab
• Even after you have secured tenants, regular maintenance must also be factored into the monthly overhead costs

3. Employing a reliable property management company is essential to ROI

• Will you have time for advertising and showing the property, screening tenants, collecting monthly rent payments, making simple repairs and, in general, keeping an eye on your investment?
• Especially if you are purchasing a rental home out-of-state, employing a reliable property manager will give you peace of mind and reduce stress
• Property managers offer a wide array of services and typically only charge 10-15% of the monthly rent

Why You Should Invest in Distressed Market Rental Property

In today’s real estate market, investing in residential rental properties has become extremely attractive.

·       In 2012, 36% of renters preferred single family homes as opposed to apartments, up 5% since 2006 (The Kiplinger Letter).

Top reasons to invest in rental property:
 
Passive income with positive monthly cash-flow

Current widespread increase in rental demand

·         Inventory is down due to a decline in residential building activity

·         Creditworthy homebuyers can’t secure financing for mortgages due to stricter underwriting and increased regulation

Having a sense of financial security

·         Sell off your cash-flowing fully rented property to an eager investor if you are ever in need of quick cash

·       

Rental Property in Distressed Markets, Cash-Flow & Monthly Mortgages:

Source	Location	Price	Rental Income	Mortgage Payment*
Sold on Bid4Assets	Cleveland, OH	$19,900	$700/month	$110/month
Sold on Bid4Assets	Fort Myers, FL	$48,250	$700/month	$267/month
Listed with Agent	Los Angeles, CA area	$320,000	$1,775/month	$1,770/month

*Based on 30 yr mortgage, 100% loan amount, 3.5% interest, 1.25% property tax, and .5% PMI

In highly distressed markets like Cleveland, Detroit, and Buffalo, you can buy a house for around $20,000 that will rent for $700/month. Financing will be difficult on a property like this, but if you were able to get a 30-year mortgage, the payment would be in the ballpark of $110/month. You can buy a home in mid-range market like Fort Myers for around $50,000, which may rent in the ballpark of $700-$800.  A mortgage payment on a house like this might be around $267/month.  In the more expensive Los Angeles market, an agent has a cash flowing duplex listed at $320,000, which generates $1,775. 

While the rental income is 2.5X that of the more distressed markets, the price is six to fifteen times higher.  In other words, you could buy around FIFTEEN cash flowing houses in highly distressed markets like Cleveland for the same price as a cash flowing duplex in parts of Los Angeles!!!

In summary, distressed markets have a massive gap between rental income and mortgage payments, while in stable, higher-priced markets rental rates tend to be close to mortgage payments.

Over 12,000 Properties Sold with $51.8M in Revenue for Wayne County, MI

I am proud to announce the completion of the most successful tax sale in Bid4Assets history!

The Wayne County, Michigan tax foreclosure sale, hosted on Bid4Assets this past October, grossed $51,814,456 in revenue for the Wayne County Treasurer’s Office.

With a 53.5% sell-through rate and 12,049 properties sold, this year’s tax sale has become the biggest online real estate auction in history!

To date, Bid4Assets has helped over 50 U.S. counties recoup over $433 million in revenue from unpaid back taxes.

I’d like to thank all of our participants for helping to make this such a successful sale. I wish you the best of luck with your investments!

Sincerely,

Matt Baker, CEO

Why Invest in Detroit Metro Real Estate?

The Wayne County Tax Sale Re-offer  is rapidly approaching with thousands of residential, commercial and vacant land properties on the auction block and minimum bids at a fraction of the county assessed values.

Whether you’re an experienced investor or a real estate rookie, see why the media and analysts are raving about Detroit real estate. Check out the October tax sale re-offer on Bid4Assets and buy now while prices are at historic lows!

The Michigan economy is growing rapidly

• The Michigan Economic Activity Index rose 2.0 points in June, to a 10-year high of 105.9 according to economists at Comerica Bank (CBS News)
• Consumer sentiment increased unexpectedly in September to 79.2, up from 74.3 in August (Bloomberg)
• Helped by the auto industry recovery, Detroit unemployment rates have dropped by 2.4 % over 12 months (CNN Money)

Home prices are on the rise and inventory is decreasing

• The number of single family homes sold in July 2012 increased by 14 percent compared to July 2011, according to the Michigan Association of Realtors (CBS News)
• Between the first quarter of 2011 and the first quarter of 2012, the median price went up by 8.6%, one of the largest increases in the country (24/7 Wall St.)

Rental rates have exploded in the metro area

•  Average rental prices in the Detroit market have shot up 5% over past year, according to Rent Jungle (CNN Money)
• Rents are projected to climb to $720/month and vacancies will decrease to 4.5%, which is on par with the national average for metropolitan areas (Wall Street Journal)

Still not convinced? Read why Forbes is calling Detroit the “Comeback Kid”

Sources

1 CBS News Detroit: Michigan Economy Returns To 10-Year High In June
2 24/7 Wall St: Ten Towns That Cannot Turn Around

3 Bloomberg News: Michigan Consumer Sentiment Unexpectedly Rose in September

4 CNN Money: Best cities to buy rental properties

5 Wall Street Journal: Even Detroit Looks Good for Rentals

6 Forbes: Detroit Real Estate: Comeback Kid?

Researching Quitclaim Deeds

How to Check the Status of a Property's Title

Real estate transactions involving quitclaim deeds have become popular in the sale of bank-owned properties and especially with low-value homes in depressed markets. When a property changes ownership with the issuance a quitclaim deed, the seller is transferring the parcel with no warranty as to the status of the title.

When a property is up for auction on an online venue and will be conveyed via quitclaim deed, interested buyers must understand that the parcel may carry delinquent taxes, liens and encumbrances, which will be assumed by the winner bidder after the sale. Homes issued on quitclaim deeds are often found listed in the $1 No Reserve category on Bid4Assets.

Here are some free and easy tips on researching property titles:

• Contact the County Treasurer/Tax Collector's Office
  
  • Verify the amount of back taxes
    
  • Learn what payment options are offered and in what timeframe
    
  • Contact information can usually be found online
    
  • Some county websites allow you to search by property to obtain instant tax information
    
• Contact the County Recorder's Office
  
  • Request information on any notices or violations that were recorded in association with the property in question
    
• Contact the County's Code Compliance Division
  
  • Confirm whether any notices have been issued against the property
    
  • Citations may include debris or weed abatement, demolition liens, a notice of condemnation, etc.
    

 

Ordering a title search from a reputable provider is the safest way to check the status of a property's title, and will give you peace of mind when you are bidding on a property at auction.

Here are some well known title search companies:

• Chicago Title Insurance Company
  
• Fidelity National Title Group
  
• First American Title Insurance Company
  
• Old Republic National Title Insurance Company
  
• Stewart Title Guaranty Company
  

*Bid4Assets has no affiliation with the listed companies and does not recommend or endorse any particular title company

Be sure to find a title company branch in the same market as the property you are researching, and to confirm how long it will take to perform a title search, to ensure that you'll receive the information in time to place your bid.

While it takes time and sometimes money to research properties effectively, in the words of Benjamin Franklin, "The only thing more expensive than education is ignorance."

Bid4Assets Customer Service: Top 10 FAQs

    ·         How do I register on Bid4Assets?

o    In order to participate in any Bid4Assets auctions, you must first sign up on our site. You only need to register one time on Bid4Assets

o    Check your email inbox for the Bid4Assets Registration Confirmation message and click “activate your account” or paste the link into your browser. This will direct you to the Bid4Assets homepage

o    Finally, sign in to your account to begin bidding on property

o    Still having trouble with registration? Check out our video tutorial on How to Register on Bid4Assets

·         How do I place a bid on an auction?

o    Once you’ve registered, login to your account and navigate to an auction page

o    Enter your desired bid amount in the yellow box titled Place Your Bid and click “Bid on this item”

o    Confirm that you have reviewed the asset details and agree to our Terms of Service and non-performing bidder policy

o    Finally, enter your credit card information, your Bid4Assets password and click “Bid Now” to submit your bid

o    County Tax Sales and Department of the Treasury auctions may require a deposit to be submitted prior to bidding

·         How do I submit a deposit to bid on a Government Auction?

o    Login to your account, navigate to the auction page, and click on “Click Here for Deposit Instructions”

o    Follow the step by step instructions which include choosing your preferred deposit method (Certified Check/Money Order or Wire Transfer), reading the County Tax Sale Terms of Service document, and entering your social security number

o    Next, continue to the deposit page to display wire transfer or certified check/money order mailing instructions

o    Follow these steps, submit your deposit through your financial institution and refer to My Bid Deposits in your Bid4Assets "My Account" page for updates

o    For a video demonstration, check out How to Place a Deposit on the Wayne County Tax Sale

·         How can I become a seller on Bid4Assets?

o    To list an auction on Bid4Assets, you must be a registered user (See FAQ #1 for registration instructions)

o    Login to your Bid4Assets account and click “Sell” in the top navigation bar

o    First time sellers must complete the prompted identity verification process. You may also complete and return this form to IDverify@bid4assets.com

o    To create an auction, choose the “E-Z Lister” tool and fill in the relevant fields to complete your listing

o    Prior to releasing your auction, you may be required to submit proof of ownership documents to our Customer Service team

§  In order to expedite the process, you may fax a copy of your proof to (301) 650-9194. Please include a cover letter referencing the auction ID(s)

·         Does Bid4Assets offer insurance to protect buyers’ payment?

o    We do not offer any type of buyers insurance, but encourage users to perform property research and due diligence prior to bidding

o    All Bid4Assets sellers have passed an identity verification test, and may be required to provide proof of ownership documents prior to listing

·         When will my bid deposit be refunded?

o    Refund processing begins automatically at the close of the auction

o    In accordance with our Terms of Service, refund checks will be mailed within 10 business days of the auction close

o    You will receive a notification email when your refund check has been mailed

·         Can I really buy a house for $1 on Bid4Assets?

o    Auctions listed in our $1 No Reserve Homes category may have a final bid price of $1, but could carry additional buyer fees which are stated by the seller and vary by auction

o    Pay close attention to the seller's terms, closing costs and Buyer's Premium included in each auction to determine a final auction purchase price

o    Please be advised that some of these properties may carry liens, encumbrances or back taxes. Perform adequate due diligence prior to bidding

·         How long has Bid4Assets been in business and where is the company located?

o    Bid4Assets has been a trusted online auction venue for 13 years. The company was founded in 1999

o    Our offices are located in Silver Spring, MD, a suburb of Washington, D.C.

·         Can I bid on Bid4Assets without using a credit card?

o    In order to place a bid on non-government auctions, buyers must have a credit card on file. This minimizes non-performing bidders

o    Credit cards will only be charged if a bidder does not perform after winning an auction ($250 NPB fee)

o    Government auctions require bid deposits to be submitted prior to bidding, but do not require users to provide credit card information

·         Can Bid4Assets place a bid for me?

o    Bid4Assets is unable to manually place bids for customers over the phone or by email

o    Registered users who do not have access to the Bid4Assets website but are interested in participating in a County Tax Sale auction may use the offline bidding form found online or request one by sending an email to Service@bid4assets.com. Please note that this service is only available for County Tax Sale auctions