5 Ways How to Find Properties with Tax Liens or Houses that Owe Back Taxes (Free & Paid Methods)

For real estate investors trying to find homes that owe back taxes, there are five effective ways to do it.

This article will show you how and where to find tax delinquent properties in your area.

Let’s start by looking at the easiest and most straightforward method.

HouseCashin is an innovative online platform for real estate investors. They have a search engine for off market properties for sale that can be used to find tax delinquent homes.

In the Deal Types filter, select “Delinquent property taxes”. Also, set your target location.
The marketplace will show you listings of houses for sale for back taxes.

Among these listings, there may be properties added:

• by homeowners themselves
• by real estate wholesalers
• by investor-friendly real estate agents or other professionals

The respective labels on the property preview pictures will show you what type of listing it is.

Listings added by wholesalers and other real estate professionals may contain very helpful data giving you an approximate estimate of the deal’s ROI — for flippers and landlords separately.

Learning how to find out who owes back property taxes for yourself will lead you to the office that collects taxes in your area.

Your county or city will have a Tax Assessor or Tax Collector. Their office compiles and maintains a complete database of all parcels in their jurisdiction.

The information in these records includes ownership information, value and tax payment history, and whether or not taxes on the property are current.

Contact the appropriate office in your market and ask for a list of properties with unpaid taxes. It may be called Tax Forfeitures, Delinquent Tax Roll, or a Tax Sale List.

Municipalities are eager for these properties to find their way into the hands of people who will pay their taxes consistently.

It’s in their best interests to help various types of real estate investors who will bring tax delinquent properties up to market standards and sell them to taxpayers.

Some offices have a mailing list of people who regularly receive updated tax delinquency lists. Make sure that you get on that list.

Most counties and cities have interactive sites that enable you to search the sub-markets that you have identified as potential investment markets.

Without much time or trouble, an investor can search each property and quickly see if they are current on their property taxes.

The next method is one of the most classic ways for those thinking of how to find leads for wholesaling real estate or home flipping.

Driving for dollars is a solid strategy for finding motivated sellers that is taught probably at any wholesale real estate training courses.  It works great in conjunction with searching public records.

When you are driving your markets and see a house that is run down or possibly vacant, you can immediately search the online tax records and find out whether or not the taxes are being paid.

Some real estate wholesaling software tools, such as driving for dollars apps, automatically pull such information from public records for you.

From there, to find the up-to-date owner’s contact details, you may need how to do real estate skip tracing. Use one of the specialized skip tracing tools for real estate investors that we reviewed to help you choose one.

As you build your investment business, you should have a pipeline of property owners whom you contact on a regular basis.

In most counties, the tax bills are mailed out around September, but they are due by the end of the year.

You should look up your pipeline of possibly distressed properties in early January to see whether they paid their property taxes.

If they are behind on their taxes, you may be able to get a foot in the door before the property goes to foreclosure.

Convincing the property owner that you can help them with their problems before they get any worse will put you ahead of your competition.

Most homeowners pay their property taxes along with their mortgage payments. If they have less than 20% equity in your home, their lenders often require these “escrow” payments.

Delinquent taxes may mean that the mortgage payments are also not current, and the owner may be in default.

You may save time by going straight to the mortgage company with your offer.

Let’s look at how else to find homes with tax liens with the help of your local government. Your county may directly offer tax lien properties for sale, which is a free source of leads if you want to start wholesaling real estate with no money.

A municipality can foreclose on a property for non-payment of taxes. When this happens, the property is sold at an auction.

You may be able to buy the foreclosed property by paying the delinquent taxes.

If the tax deficit isn’t too large, you are more likely to get into a bidding contest with other local real estate investors. As long as the eventual price meets your budget number, you can still make a good return.

Winning bidders are required to complete the transaction immediately. In addition to paying a deposit to participate, you’ll have to have the balance owed on hand.

Be careful to search for any other liens on the property before the auction. You can’t afford surprises like a mortgage or workman’s lien that you have to pay.

Researching the condition of the property is important. Find out whether or not your county allows bidders to inspect the property before the auction.

If you have local property inspectors in your network or use a contractor for repairs and renovations, make sure that you take them with you when you inspect the property.

In assessing a potential purchase, real estate investors calculate the After Repair Value (ARV).

The ARV is equal to the current value or cost of the property plus estimated repairs and/or improvements. This tells them whether or not the venture can be profitable.

The difference between the ARV and the price that you sell the property for is your profit.

If you start with the market value for similar properties that are in good condition and subtract your desired profit margin and the cost of repairs, you’re left with your maximum bid.

The only way that you will know how much your maximum bid can be is to know how much your improvements will cost.

Ask the tax collection office if they use a particular auctioneer and who it is. Auction firms will often provide a list of upcoming auctions to buyers. That’s another list that you should be on.

Counties can hold online real estate auctions via foreclosure websites and REO auction sites.

Auctions can be a good way to find cheap properties, but they are better be avoided by those who are only starting a house flipping business.

It’s easy to get excited and buy a seemingly cheap property that is in reality too expensive because of problems you can’t see because of the lack of experience.

When thinking of how to look up properties with tax liens as well as how to find foreclosures resulting from mortgage debt, one way that is often overlooked is to let someone else do it for you. That’s exactly what real estate wholesalers do.

Wholesalers look for properties that their investor clients want to buy. Their frequent customers are investors needing to find cheap homes to flip and landlords.

Wholesalers negotiate with motivated sellers, determine properties’ investment potential, and put suitable homes under a purchase contract in their name.

The contract can be assigned to someone else. An investor who likes the property will pay the wholesaler a fee to take over the contract.

The contract price has to be low enough for the investor to pay the wholesaler, make repairs or improvements, and still be able to sell for an acceptable profit.

In exchange for the assignment fee, you don’t have to look for properties yourself and you get an investment-ready deal already pre-negotiated by the wholesaler.

These professionals know many places where to find houses to wholesale, including county records. Among potential investment properties they can suggest for you, there may be tax delinquent homes.

And when you establish a relationship with a good wholesaler, they will look for deals that suit your specific criteria.

Some investors don’t work with wholesalers or brokers because they don’t want to pay their fees.

The idea that the investor will make more money without the help of others is short-sighted. Many wise investors think of how to find wholesale properties rather than motivated sellers, to speed up their ongoing buying, rehabbing and reselling process.

Spending time looking for investment opportunities yourself can cost you more than the wholesaler’s contract assignment fee.

A well-chosen network of referral sources will save you a lot of time and expense.

With the help of a team of professionals whose business is finding distressed properties, you can secure opportunities ahead of your competition.

The last method on our list is for those thinking about how to find houses to wholesale or flip without doing any search at all. It’s simply buying leads from real estate investor lead generation companies.

By using diverse modern online marketing strategies, lead generation companies conduct ongoing campaigns that identify motivated sellers across the country.

You can get motivated seller deals from various companies that focus solely on selling leads or as a part of features offered by the best tools for real estate investors.

Pricing for leads can be subscription-based or a la carte. For comparison, some investors like to reduce the pricing to a per lead basis.

Consider the number of deals that you are likely to do each year and how many leads you need per deal.

If you want more exclusivity, look for providers who restrict the number of users in your area. Or search for sources that use an automatic auction process where subscribers bid on leads.

We at Real Estate Bees also have a program through which you can receive motivated seller leads according to your criteria, including properties with delinquent taxes.

The advantages of our REB Leads program are its affordability and the fact that our leads are highly motivated and highly converting.

Unlike many other lead providers, we collect very precise data related to each lead so that you can estimate the seller’s motivation level.

Learn about REB Leads here in more detail.

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About the Author

Kristina Morales is a REALTOR® with over 20 years of professional experience. She actively practices real estate in Ohio but also has practiced real estate in California and Texas. Conducting her real estate business in three states has allowed her to gain unique experiences that make her a well-rounded realtor. She obtained her Bachelor of Arts in Business Management and her MBA with a concentration in Banking and Finance. Prior to real estate, Kristina had an extensive corporate career in banking and treasury. She ended her finance career as an Assistant Treasurer at a publicly traded oil & gas company in Houston, TX.