Some interesting properties in the Shelby County tax sale had no bidders this year. I think there were missed opportunities for local investors. By August, you should be able to find those properties on the Alabama Department of Revenue website, and request purchase quotes. If you are interested in other counties, download my free list of auction dates, HERE.
One parcel is a slender finger of land making up significant road frontage on an important artery. Behind that parcel is a major landowner with plenty of money, and only half the frontage it should enjoy. Look for similar opportunities in your searches, because that is an easy flip to the rear-ward property owner.
Several parcels were landlocked. Some of those were properties owned by the same person as owned the frontage piece. For example, a homeowner might own 1/4 acre on the road, with their house, and a separately-taxed 1/4 acre in the rear. They paid the taxes on the home site, but not the rear parcel. Why? Maybe money was tight. Maybe the lender paid the taxes on the home site, and the property owner didn’t realize they were supposed to pay taxes on the rear lot. Who knows? Such a property has tremendous hostage value, because the owner will almost certainly redeem. If they won’t, then contact the lender with the mortgage on the front parcel. As the owner of a landlocked parcel of land, you are entitled to condemn a right of way across the parcel with the frontage. That decreases the value of the frontage lot. Lenders will redeem, or force the homeowner to redeem, to protect their collateral.
There were some infill parcels-undeveloped lots in a subdivision, but with homes on either side. If you can get good title, you can usually sell such a lot to one of the adjoining property owners, if you give them a bargain price. You can afford to do that, because you bought it for a bargain! Don’t be greedy. Or, you might be able to sell it to the homeowners association for a community garden or other amenity.
I saw some small lakes and green areas, originally just surplus land after subdivision development, and possibly retention ponds. Such properties can be purchased for very little money at tax sale, held for three years until you get a deed, and then held for one more year. At that point, appraise the property and then donate it to a conservation group, to be kept as green space in perpetuity. Write off the fair market value on your taxes, and shelter ordinary income. Saving money on your taxes is the same as making money, isn’t it?
Entire blocks of subdivision lots went to the State. Assuming infrastructure is in place (sanitary sewer, power and water to the curb, roads, etc.) then those lots WILL be built in the future. It might be you, or it might be an Adams Homes or Horton. Contact them for their site requirements, and cut a deal.
Some interesting statistics from the Shelby County sale. This excludes the 21 properties that sold while I was taking a phone call from someone, and could not write down the sales info.
- One investor purchased 145 properties with overbids totaling $3,861,000, plus some other properties for only the taxes due. Property values were all over the scale.
- Another investor targeted mostly high-dollar properties, spending a total of $8,290,000 of overbids on only 32 parcels.
- There was a scattering of small investors who managed to pick up some bargains for only the taxes due, or very small overbids.
- Not counting what I call the “busted subdivisions,” a total of 78 parcels had no bidders, and went to the State.
I’ll post on other auctions, as I go to them.