Sunday, June 10, 2012

CAMP 420!

Let’s face it, paying rent to somebody else month after month and year after year really sucks! I mean you shell out hundreds of dollars every four weeks or so and have nothing to show for it. I got tired of this crap and had to find a way out!

About five months ago I bought a piece of “junk” land for $400 plus $20 “filing fee” and named it camp 420, hence the title of this article. A few months later I bought an old 30 ft. travel trailer for only $200! I had to rent a truck to move it to my new kingdom but I still don’t have more than $800 invested. In my neck of the woods you can buy travel trailers all day long for under a thousand dollars on Craigslist. Over the last couple of months Craigslist has had more than fifty trailers in my area listed for under one thousand dollars each! Finding a trailer at a price that a poor dude like myself can afford was not really that hard.

The difficult task is usually finding a suitable patch of dirt to park it on. So how did I do this? The answer my friends is tax forfeited property. I purchased a piece of real estate from the county tax office. In The great state of Texas the association that collects property taxes is called the “appraisal district”, the Dallas county appraisal district, the Harris county appraisal district, the Taylor county appraisal district, etc. Your state and county real estate taxing entity may be called something else but hence forth I will refer to any county property taxing agency as “the appraisal district”.

Now let’s say you own a piece of property and don’t pay your taxes. You get assessed certain penalties with interest. After a certain amount of time if you still do not pay your property taxes your house or whatever gets auctioned off on the courthouse steps. But the highest bidder on your property doesn’t actually get to take possession of your house or land when he wins. He (or she) has only purchased a tax lien certificate. You as owner of the property still have a “right of redemption”, which means that you have a certain amount of time to pay off the lien with interest. Here in Texas the right of redemption is two years. Depending on what state you reside in it is anywhere from six months to two years. So if you do not pay off the tax lien (with interest) before the right of redemption is up the person who bought the tax lien certificate on your place can then take possession of your property.

Wow! This is great you say, “I can just go to one of these auctions, bid a thousand bucks or so and in two years have a three bedroom house”. Slow down Amigo, It’s not quite that easy. First of all most people who own a house or other piece of property that’s really worth something usually finds a way to pay off the lien against their property before their right of redemption is up. Secondly any kind of property that is worth real money is not going to be cheap because you will have other people bidding on it, driving up the price. Thirdly you only get a “quit claim deed” which means if the bank or mortgage company still has a lien on the property for an unpaid mortgage you now become responsible for that mortgage. You must really know everything about the property you are bidding on or you will get royally screwed.

Sometimes however certain propertys come up on the auction block and no one bids on them! No one bids on them because they deem it junk land. They might not call it that but to them there is very little (if any) value to it so they do not waste their time placing a bid. Maybe the land is too small and too far out in the sticks. Maybe it’s just a vacant lot with nothing on it but rocks and cactus. Whatever the reason there is a lot of property that doesn’t get bid on at tax auctions.

Now what happens to these properties that no one bids on? They go back on the block next month or whenever the county holds their next tax lien auction. If no one bids on it a second time then it goes on the auction block still again!  Eventually the appraisal district strikes it off of their tax rolls and sends it before a judge who declares all prior liens and judgments against the property null and void. The appraisal district then places that property on their “struck off list”.  Your county and state may call this list something else. The point is that most counties have a list of properties that can be bought free and clear for either the amount of back taxes or by placing a sealed bid.

I got my personal little empire by placing a sealed bid. I just went through the struck off list in my area until I found several properties that looked promising. I googled the satellite images of these places and chose the one I did because there is no neighbors on either side of me or across the street. Even though my patch of ground is only 46’ x 80’ I am the only one on the whole block!  Plenty of piece and quite. I feel as though I am a hundred miles from any living soul whenever I am there.

Where did I learn about this? I bought a book a number of years ago called "How To Buy Land Cheap" by Edward Preston. It was published by Loompanics unlimited. I think I heard somewhere that the author passed away, and with Loompanics now defunct the book is more than likely out of print but you can probably still get a used copy from Amazon. It might be a bit on the expensive side but I highly recommend it to anyone who wants to buy a cheap place that they can call their own.

If you can’t find the book at a price your willing to pay then just go ahead and start writing county appraisal districts around the country in places that you might be interested in. Write them a friendly letter and explain that you are interested in buying any property they might have for back taxes or any land that is “surplus to their needs”. Don’t say you are looking for “junk” land. They will respond back that they do not have “junk” land, that all property in their jurisdiction is valuable. That’s if they respond back at all!

 Remember, you are looking for land that can be bought for back taxes, or any property that is “surplus to their needs”. Expect most counties not to respond at all no matter how nicely worded your letter is. Do not be discouraged by this however because there are still properties available in most of the counties that did not respond. You must be persistent. Find the phone numbers for any appraisal districts in areas you are still interested in that did not reply to your letter and give them a call. Some counties will tell you about the properties that are available over the phone and some will tell you to send them a self-addressed stamped envelope for their list. I’ve had some real nice conversations with ladies over the phone who were more than willing to give me the run down on certain properties that were available.

 I could have bought a house that was still in “livable” condition (as she described it) in a small town in North Dakota for less than a thousand dollars! It was only 15 miles from the Canadian border making for some interesting possibilities if I ever needed to bug out, but who the hell wants to live in North Dakota? Don’t get me wrong, if you are from North Dakota or if you like seriously cold weather this might be right up your ally. In fact North Dakota has “a lot” of property you can buy for pennies on the dollar. I think that state would be an excellent place to start your search even if you don’t want to live there because you can see that what I’m saying is true. And hopefully it will motivate you to keep searching and keep digging until you uncover that little hidden gem that no one else could see the value in.

Some other states that are good bets for some cheap real estate are Montana (still cold as hell) and Arkansas, (but it’s Arkansas). In general any state or county that has lost population or had stagnant growth is a good bet. I got the land I have in the same county I was already living in and it’s got a thriving economy and has had huge population growth over the last ten to fifteen years. So if you’ve got your heart set on buying a place in your current location then go to your local appraisal district and start your search. Don’t take the word of the first paper pushing bastard you talk to if they say they don’t have anything like that. Go back later and talk to someone else. Keep calling them and searching their web site if they have one. Eventually you might find just what you’re looking for. Happy Hunting!
                                                                                      

7 comments:

  1. I got 15 plus years living in a trailer now, love it. Looks like a interesting blog you have, will check in and see what you have to say.

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  2. Coal, this is obviously a new blog so I need all the readers I can get. please stop back by anytime. Thanks!

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  3. Great story there Tex!

    Another great book on this subject is "Country property dirt Cheap" by Ralph C. Turner.

    I also came across this helpful article on homestead.org

    http://www.homestead.org/NeilShelton/HowtoBuyLand/VeryCheaply.htm

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    1. You didn't talk about how much it cost to get power, water and plumbing to your place. And did the county charge more property tax on you "junk land" for the improvements you made to it (your Trailer)?

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  4. Anonymous, right now there is no power, water, or plumbing. Power lines pass right in front of the property but I'm planning to be completely "off grid" because a monthly bill for electricity is something I neither want or need. The same with water. I don't yet live there full time so I take water along with me when I'm out there puttering around. But when I do move in full time my plan is to construct a rainwater collection system to provide most of my needs. Right now there are no "improvements" to the land to be taxed for.

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