Tax Delinquent Houses Explained

May 7th, 2021

In this article, you’ll learn what tax delinquent houses are, how to find them, and how to flip them for profit!

What Is A Tax Delinquent House?

A tax delinquent house has an owner who is behind on their property taxes. In these situations, the county wants to recoup the taxes they’re owed. They do this in different ways depending on the state and the county. Some states will sell lien certificates and others will go straight to a tax deed sale, where the house is foreclosed on and sold at auction. Local regulations and laws vary widely, so do your research (they can even be different from county to county in each state).

Video Tip:

Watch this YouTube video with Jerry Norton where he explains the ins and outs of tax delinquent houses.

Why Would Someone Not Pay Their Taxes?

Typically, tax delinquent houses are owned free and clear, which means they don’t have a mortgage. The owner could have inherited the house or paid off the mortgage completely. Typically, property taxes are paid through the mortgage, so after the house is paid off the owner becomes responsible. Those taxes can add up to thousands of dollars a year (or more) depending on the area. There are a lot of reasons people can get behind. They may be on a fixed income. They may have lost their job or gotten injured. Or, they don’t want the house and don’t want to pay taxes on a house they aren’t using.

Regardless of the reason, tax delinquents are great leads for wholesalers and flippers! They are motivated to sell because they are going to lose their home and they are out of options.

How Do You Find Tax Delinquent Houses?

One way is to go to your county office or visit your county website. Each county is different, so you will have to do research on the process in your area. Some require in-person visits, others have websites where tax delinquent houses are posted.

But, by far the easiest way to find tax delinquents is to subscribe to Jerry Norton’s wholesaling and house flipping system called Flipster. If you haven’t heard of Flipster, it’s a cloud based all-inclusive platform that helps you organize, streamline and automate all the steps to wholesaling and flipping houses. It also comes with millions of motivated sellers leads across the country, including tax delinquent leads. Click here to see it in action.

How To Talk to Tax Delinquent Leads

After you find a tax delinquent house, it’s time to contact the seller. Keep in mind, they have probably been contacted by other investors, so you want to approach them in a way that lets them know you are there to help. You want to be compassionate and empathetic, so they feel like you are on their side. In some cases, you can even offer to pay for movers to make the process as easy as possible. You will run into a lot of different situations with tax delinquent leads, so you need to gather the right information to know how to handle each situation. Click here to get Jerry Norton’s Motivated Seller Scripts so you know the right questions to ask to get the information you need.

Video Tip:

Watch this YouTube video with Jerry Norton where he lists 10 “must ask” questions when talking to motivated sellers.

After you talk to the seller and find out how much they owe in taxes, you will treat this amount just like a mortgage when it comes to making your offer. Remember, all mortgages and liens (including back taxes) must be paid off prior to closing. Whatever your max offer is, it must account for the taxes owed in order for the sale to go through.

5 Steps To A Tax Delinquent Deal

  • Step 1: Find a tax delinquent house
  • Step 2: Talk to the seller
  • Step 3: Make an offer
  • Step 4: Get the house under contract
  • Step 5: Assign the contract and collect your wholesale fee!

Tax delinquent houses are one of the best lead types out there. They are always motivated, they are off market, there is less competition, and you’re helping the seller out of a tough situation.