Tax deed auctions?

Question

How does this work? We are looking to buy a house (to live in) for cheap, even if it needs work. Any advice on where to get a list for cheap or free would be great. We live in Indiana. Thanks!

Answer 1

You only buy tax liens, the debt, at these, not actual houses.    It would take several years and a miracle for this to end up as home ownership for you.

If you need a cheap house you need to be looking at REO's, bank owned properties.

Answer 2

I've bought 100 of these over the years.  I pay their property tax.  I receive either:

all my money back plus 16% interest    or

the deed to the property.

Well, it doesn't work quite as well as advertised.  I own a ditch, an easement, and a road.  I never got a house.  

Anyway, you go to the auction in February.  The people are already 2 years behind on paying their tax.  You raise your hand at the auction when that property is announced.  You have 24 hours to bring in a cashiers check.  If the owners of the house don't pay their tax in 5 more years , i get the deed.  If they do pay, i get 16% interest.

The problem is that there were 50,000 properties being auctioned.  1/3 of them are "rescued" by the owners just prior to the auction-- they rushed in and paid their 2 years of tax.  All the house i wanted were "rescued".  So i just started raising my hand and buying anything. On some i received the check for one day of interest at 16%.  the owners had paid up the day after the sale.  One house didn't pay for 4 years and 11 months.  I was drooling.  They paid up.   I did get 16% interest.  I didn't want that .  I wanted the house.

At last year's auction there were 1,000 bidders.  When i started doing it in 1984, there were 15 bidders total for the whole city of PHoenix.

Anyway, attend the auction.  Don't get your hopes up.