Buying properties on the cheap at the DC Tax Auction
I was listening to the radio the other day when they were interviewing the District official in charge of the auctions of property with delinquent taxes. It seems like a smart enough financial strategy.
Buy a delinquent tax lien, and:
- either foreclose on the property and get a bargain, or
- receive your money back from 18% annual interest.
I mention this to Sarah and we both knew this was better money than any
of our IRAs or mutual funds were getting, and so I started to pay
attention. The problem, of course, is that it takes dealing with
lawyers (I hate that) and up to five years to get a foreclosure.
A crash course in how people are trying to make money this way can be found in this week’s Washington City Paper article, "Lien and Mean", by Maurice Martin.
Note that since there are financial types already investing in this
way, it’s certainly much easier to just invest in their funds than to
try it yourself.