This post is part of my series where I explain the methods and procedures for Tax Sales in Each State. In this post, I will discuss TexasTax Sales.
This post features Texas Tax Sales Explained, a video posted on YouTube on April 25, 2020.
Texas Tax Sales Explained
Texas has 254 counties and is a Hybrid Deed State. This means that it is a deed state but operates like a lien state. In Texas, a winning bidder will receive a deed to the property. But, that deed has a right of redemption. In Texas, there are many individual taxing units. The county, cities, and independent school districts all collect Texas property taxes. Each of these taxing units can send a tax delinquent property to tax auction.
A word about the redemption period.
There are two different redemption periods in Texas. The redemption period is two years If the property is a homestead. Land designated for agricultural use also falls in this category. This is also true if it has a mineral interest. Any other properties carry a 6-month redemption period.
Timing
Texas Tax Sales are on the first Tuesday of every month. To bid, you must be present or have a representative present at the auction.
A PENALTY – Not Interest
There is NO interest. Texas Tax Sales carry a 25% per year penalty. The penalty is not only on the lien amount. It also includes your premium and any costs associated with the administration of the lien/deed by the law firm and county. As such, you receive 25% on your aggregate total! In other words, you get paid for EVERYTHING you invest. This makes Texas among the best states in the country for investors.
Unsold tax deed properties, are known as “struck-off properties”. These properties may be available for purchase from the taxing unit.
If you work in Texas, you could work in that state and never work another state ever any place else in the United States. There’s not much opportunity. Texas is the only state that I give a five out of five. By the way, how do you think I know that?
An Awesome Resource for Tax Sale Investors
Something else that I’d like to mention. Recently, I released a 259-page book. The title is The Ultimate Dictionary of Real Estate Terms. If you plan to attempt investing in Texas tax sales then this book is a MUST HAVE! Scouring the Internet, I worked with other authors’ books. Now, I deliver you guys a reference that has defined more than 4300 terms related to real estate. It’s available at Amazon and Barnes & Noble and about 200 other retailers. The price is around $20 but at the end of this post, I will show you how you can get it for free.
If you would like to have Texas Tax Sales explained even more,
Tax Sales investing is a niche that has the potential to be insanely profitable.
However, most investors do not have a deep understanding of this investing strategy.
Every state has a unique set of rules and regulations. There are some basic rules you need to understand as to how the process works. Generally, states will fall into one of three categories:
Tax Lien States
Tax Deed States
Hybrid States
Hybrids are states who conduct their tax sales by selling tax deeds with a caveat. The deeds have a redemption period much like a tax lien certificate.
This map provides links to information for every state as well as Washington DC.
The Ultimate Dictionary of Real Estate Terms
More than 4300 Real Estate Terms Explained with Clear and Concise Definitions For Real Estate Investors, Homeowners, Agents and Brokers
