bidding strategies

[twinn1]

A lot of discussion lately on the right strategy to wining bids:  Just thought I would start a new thread to that effect.  If you guys think this info is proprietary I understand.

Things I look at before making a bid:

Lien information, is the property vacant? if occuiped will it be worth the while to bid, evict, if so then i factor that into the bid
MLS past and present sales, the volume of sales, % to asking price and time on the market.
Local considerations, ie, is the tax sale property owned by a neighbour? If i win will it be worth my while having to fight immediate neighbours on zoning, building code etc...
How much similar properties in the past have sold for at tax sale auctions.
Zoning considerations, variances, if I need a varience to make it work, then I will research the local city council's past voting record on those type of issues., would the property hold value if I give the neighbours a ROW?
Other avenues of profit, is the land wooded? what kind? how mature?
Possible zoning changes that are in the pipeline, how will this effect the property?


When deciding on bid amount
It depends on the specific property, if I really like it I dont mind paying over what ever the market value is, as there are imporvements I can make that will increase the value of the property.  If  I am going to build, I dont really care about it costing 10-20K more.

Feel free to add comments

[Dave2]

A little off topic but an interesting story from US about someone paying taxes and then renting out a house. 

http://www.idahostatesman.com/235/story/915580.html

I wonder if you could make it work here. 

[Pfm1011]

Make it work here This guy is a scammer who should be charged with fraud..

As per the strategies..Each piece is different..I have a profit target but I cant specifically come up with a formula or what I look for.  I do know I do not even consider previous tax sale results as they are like nailing jello to a wall. one day sane, next day insane.

My primary factor is if I would like the land/property for myself. If I don't like it personally, I presume others wont like it   and I wont bid on it. IE  can I see myself living there?

I also wont touch variances or zoning issues. If it isn't clear to go , I cant be bothered as a zoning change can eat up your entire profit and I don't play well with bureaucrats .

[Dave2]

Make it work here This guy is a scammer who should be charged with fraud.

I agree he is both a scammer and a scumbag.  But in certain cases I could see it working here, more likely with rural land.  I mean if you wandered into your typical rural township municipal office and offer to pay the taxes as "the distant relative of the former owner who just got gifted the land" and by the way would they please update their tax records.  Think about it. Would your average municipal employee question someone who wants to pay taxes. Just keep paying and keep a low profile and after 10 years file a quit claim.  If someone checks the municipal tax registry your name is on title but not on the land registry. 

I am not certain if this would work from a legal sense if challenged in court but taxes on rural property
are often low.  If the real owner shows up you are SOL and have lost your money.

I mean this might be an effective but admittedly dishonest way to get affordable waterfront land.     
Would sure beat having to bid more then $200,000 at a tax sale for property on Pigeon lake.   
Come to think of it that might be too public.  For hunters who want moose pasture not a on public
road it might work.

For me with my luck it would never work.  The municipal tax person would be related to the owner. 
 

[Pfm1011]

The best you could do in a scam like that is collect 5 % interest on the money and if the landowner never appeared you could eventually sell the land at PUBLIC auction ( ie mls or actual auction) and get to keep the principle and interest only  NOT THE LAND

The residual would go to province.. No lawyer would help you any other way  as they  would be disbarred

If the owner appeared  and the land hasnt been sold , they could laugh at you and keep the tax payment as a gift. If you even attempted to make a claim . the judge would slaughter you, nail you with full legals and possible damages. Mortgage fraud is frowned upon.

If you have sold the land they will get insane amounts of damages from you. If the land was worth 100K , by the end of your scam you would pay them 200 plus legals

Now if the owner was just a tad bit offended , they could have you criminally charged with fraud , every judge in the province would convict you and probably give you time as an example since I  suspect you cant afford the same lawyers as Garth

Might be a good idea to just bid like everbody else

[Dave2]

With a very few exceptions most of my bids are local (say within 1.5 hours driving time)
  Interestingly enough I will rarely through in a bid just for the hell of it.  If I am going to bid I will be serious but to my limit of perceived value.  Being local allows me to do some key research work:
                      - Look at the site
                      - Monitor the competition
                      - Attend bid openings (you can learn a lot by just hanging around waiting for your
                         refunds or hopefully they are held because you are 1 or 2)
                      - Specifically: Determine who the winner is and why he won (Purpose is important)
                                          (E.g. Pro; purchase for own use, neighbour,amateur)
                                          Examine range of bids in addition to winning bid.                           
                      - Do the standard things that have been mentioned earlier.
                      - Most importantly get a continuing education.
 Finally I have some profiles that I am interested in but these are not in the public domain.

[Alice]

Hello,
I am new to this forum, although I have been following it for a while trying to educate myself.
I bought a tax sale property on Monday.  I would like to ask you experts if you insure your properties, even if you think they will be redeemed.  "My property" is mortgaged, so I assume the bank will redeem it shortly.  If I put insurance on the property against "waste", will I get the insurance money back if the property is redeemed?  Thanks for your help.

[worldjohn]

quote from twinn1
When deciding on bid amount
It depends on the specific property, if I really like it I dont mind paying over what ever the market value is.

The problem with logic like that is that most of these properties have hidden problems many of which you wont find out about till later.  Thats why tax sales should only be bought far below market value.  If you dont mind paying market value go look at MLS as there is a far far far greater selection and agents have to disclose any problems that they know about regarding the land.  Yes some wont but there is far less risk than tax sales.

NEVER PAY MARKET VALUE AT A TAX SALE!!

[markymark]

A lot of discussion lately on the right strategy to wining bids:  Just thought I would start a new thread to that effect.  If you guys think this info is proprietary I understand.

Things I look at before making a bid:

Lien information, is the property vacant? if occuiped will it be worth the while to bid, evict, if so then i factor that into the bid
MLS past and present sales, the volume of sales, % to asking price and time on the market.
Local considerations, ie, is the tax sale property owned by a neighbour? If i win will it be worth my while having to fight immediate neighbours on zoning, building code etc...
How much similar properties in the past have sold for at tax sale auctions.
Zoning considerations, variances, if I need a varience to make it work, then I will research the local city council's past voting record on those type of issues., would the property hold value if I give the neighbours a ROW?
Other avenues of profit, is the land wooded? what kind? how mature?
Possible zoning changes that are in the pipeline, how will this effect the property?


When deciding on bid amount
It depends on the specific property, if I really like it I dont mind paying over what ever the market value is, as there are imporvements I can make that will increase the value of the property.  If  I am going to build, I dont really care about it costing 10-20K more.

Feel free to add comments

I really wanted to add to this post but am putting a zipper on.

[Pfm1011]

When deciding on bid amount
It depends on the specific property, if I really like it I dont mind paying over what ever the market value is, as there are imporvements I can make that will increase the value of the property.  If  I am going to build, I dont really care about it costing 10-20K more.

There is alot of members shuttering at 20K , where I think 20K more for a piece you like is nothing so I agree with you..

Alot has to do with were you are from ..IE when I was in Marmora Im looking at 2 acres in the bush , gorgeous landscape , sells for 10K

Same piece in North Burlington 500K  . so its all what you are used to.   Hell in Oakville we will pay 300K to get the rocks in the backyard..so for a cottage lot that is perfect,,who cares about 20K

 I must admit that todays 285 and bobcaygeons 200K offer certainly are "testing my faith"  but last year had big ticket sales too ..Almost all house deals are close to and many times over value , ..

[twinn1]

To me its all about location, if something comes up in the specfic area i am looking at (ie. I have property nearby, have friends with cottages nearby, friends with heavy equipment I could use for nothing etc...) I would be willing to spend more.  I agree with MLS, but, truth is that if anything would have been available there,  I would have purchased  it by now.

I don;t mean grossly overpaying for it like recent sales, but there are things I could get done on the cheap, ie. putting in a gravel driveway, buliding a bunkie, clearing the brush, getting a survey done etc.. that would add that value that others may not be willing to do.

[spook]

Quite enjoy this site and I shall come out from the weeds to add my two cents after reading many other posts and stories (The one about a death freaked me out quite honestly).
Things I have seen missing to add to the extensive list I have seen on this site.  I have seen most of these personally over the years (my box of chocolate):
-flood zones.  Very hard to get insurance on a house or to build one.
-areas history:  was there logging or mining in the "good old days" within the watershed? Environment was not a huge concern then.  How did it affect the water table over time?  Is it sitting around waiting for discovery?  If I recall there is town in northern Quebec that is fighting the government over an old military base that had seepage.
-septic:  these days, to me, a major issue especially near water.
-well or city?:  wells can go bad, can?t be drilled or be really bad for you resulting from the above, cities like to tax.  Willow trees are nice but they do like lots of water.
-mold:  if your bid has a questionable structure, you'll probably never see it until you break the door in.
-Roof sagging?  Can you see it from the road?
-foundation or posts:  good luck looking since you can?t trespass.  What fill was used from way back when.  There is a major issue in Montreal on this.
-geography:  Is there a big hill or Farmer land sloping next door?  What happens in the spring?
-electrical:  is it close to the property?  If the is a house is it connected? And from there we could go on and one about the year with aluminum wiring, lead paint and the like.
There are many more ?why?s??  But most of the time it is how and why did it occur in the first place?
I like some of the prices I?ve seen.  I do wish I had the local knowledge on every scrap of land.  However, without that, evaluate the risk, roll the dice and bid smart.

[speedfreeksteve]

My bidding strategies..

1) Don't bid on anything that's occupied, or has even a sniff of an environmental, zoning, or right-of-way issue.
2) Bid a realistic amount based on what you would like to pay for the property, not based on what other people might bid
3) Don't pay anything in the ballpark of what you could get a similar property for on the open market. You're taking on higher risk by going the tax sale route, so there should be a discount.. even though some people bid otherwise.
4) If the property is something that will require "sitting on" for several years to make money.. then don't bid on it at all. Better off having the money working for you at 8-12% than having it take a vacation for many years.

[Prospector]

-foundation or posts:  good luck looking since you can?t trespass.  What fill was used from way back when. 

Dredging this post back up to point out the fill issue. If you are bidding on land in older industrial towns, beware what is in the ground. On a recent project in a southern Ontario industrial town which shall remain nameless, my crew unearthed the contents of old coke ovens used in steel processing. The fill material was a mix of coal, old bricks, hunks of metal, and blckened lumps of rock etc. All with a thick black goo running through it.

Since the project was on the muni's dime, we cleaned out the questionable material, and sent it for processing, then capped the area. All of it that was in the ROW. Trouble is the fill didn't end at the ROW, so adjacent landowners are sitting on a mess of who knows what. The neighbourhood (residential) had many century homes, and was a desireable area. Likely the "stuff" would never have been pulled to the surface without our project. Hopefully more doesn't surface. But maybe someone will put in a pool, dig a well for geothermal, or what have you. I hate to see their face when they get the bill to clean up their property.

This is exactly why I'm staying away from the St. Kitts bid. Looks homey, but too old and too close to the railroad for history to have been especially kind to it.