Deed Grabber Basics as You Learn to Invest in Real Estate
What the hell is a write grabber? He is a person who obtains the deed to a property, whether it is being foreclosed for mortgage default or tax lien, without attending the sale on the courthouse steps. This is done by contacting the property owner just before the sale is scheduled. You make a deal with the owner and then own the property without competing or bidding against other interested parties. If you’re eager to learn how to invest in real estate, read on as I go into detail on this important topic.
After the real estate debacle of the past few years, people realized that foreclosure bankruptcies were bad options for deed squatters because home values fell so low that they weren’t worth what it would take to pay the mortgage. mortgage. . But tax bond properties are still great for this profitable venture.
Note that the deed hijacker does not wait until tax liens are sold to pay back taxes. The successful deed capturer will contact homeowners when their taxes are delinquent. Often when taxes are behind, the tax liens are sold to large corporations, but the home still belongs to the owners for a state-by-state specified period of time. Real deed hoarders contact homeowners during that period, offer a really low price for the house, and get the deed.
The companies that own the tax liens are the ones that invented the term deed grabbers (or collectors of deeds, or bottom feeders) because they do not like someone interfering with their investment strategies. But owners are generally happy to sell to deed takers because they resent the parties who put up money for the tax liens, and would rather see the property go to someone else.
Some homes are in tax delinquency because the owners fell behind. But this usually doesn’t happen if the homeowner’s mortgage is current. Typically, the bank will pay the taxes and increase the homeowner’s monthly mortgage payment to create the escrow account to meet the next tax payment. This, of course, only puts the homeowner in a greater struggle to meet the higher mortgage payments and usually results in a foreclosure. The owner is happy to sell you.
Other homes are tax delinquent because the owner simply gave up his or her interest in the property. Just a few examples of this include:
1. A house that someone can no longer afford to maintain.
2. A house that someone inherits.
3. A dwelling inhabited by relatives of the owner; the owner loses interest in the house and the inhabitants do not know or do not care about taxes.
As you learn more about investing in real estate, you’ll see many other examples as well.
How does this work exactly? Those who know how to invest in real estate will tell you when taxes are due on a home, the county will allow investors to make offers on the right to pay taxes. The winning bidder then owns a tax lien on the property. If the property owner is in compliance with the taxes, then the bidder gets his money back, plus interest. If the property owner does not pay the taxes, then the bidder can sue to recover the investment from him, which usually results in a foreclosure. Often the bidder will seek to accrue interest in a specific property, meaning if the owner is in default for more than a year, the bidder acquires the tax lien for each year, thus gradually accruing a lot of interest in that property. .
Here’s to your success as you learn to invest in real estate!