Doing your due diligence properly and thoroughly is critical to operational prudence. It’s the only way you’ll be able to accurately calculate your ability to purchase any property. You also can’t be certain that you’re even buying a real house. There’s also a risk of the sale itself being rescinded because of errors in the process.
“Learning is not attained by chance, it must be sought for with ardor and diligence.” – Abigail Adams
Here are some fairly common issues that can show up at a tax sale:
• The “house” that turns out to be a bare lot
• Vacant land that is deemed unbuildable due to environmental hazards
• A parcel of land that used to be easement or only part of someone’s yard
• Bare land that is actually the side of a mountain
• The parcel turns out to be inaccessible because it is land locked
• An amazing piece of land that is unusable because it’s a mine and the other owner has the mineral rights
• A house that is nothing but a burnt down shell
• The super cheap property that turns out to have a very expensive IRS lien on it
• Your amazing steal of a win that gets overturned because the Trust was never notified of the sale
• My personal favorite – The carry over “renters” that turn out to be squatters who trash the place after you leave
Every single one of these issues and more can and should be discovered through proper due diligence. You are bound to meet people who forego proper due diligence in an effort to save time. Don’t let yourself get persuaded by their bad habits. That little bit of time can cost you everything in the long run and it just isn’t worth it.
My rule is simple. If you lose a bid after doing proper due diligence and a great property evaluation, you didn’t actually lose. You’re ultimately the winner because you dodged a bullet and saved your money for a real deal!
Thank you so much for reading and for being a part of the TAI Community!