19 Sep Texas Redemption Song
Earn by not buying tax delinquent properties. Earn by paying the interest payments accrued from the redemption deed. This redemption technique is however in only a few states like Texas and Tennessee.
The rule is that the for a period of time the original owner can take back his/her property even after the property is sold. It is what the law call redemption deed right.
It is a weird policy but it is the way it works, especially in Texas, where the original owner can redeem his sold property up to a half a year after the auction. If the property is homestead or place where you were born, the redemption period can extend to 2 years. For real property investors, the scheme is vague because in 1-2 years, the original owner can legally re-claim his property that you have bought or worst, developed on. What if the investor had already built a store or farmed the land? What if winning auction bidder moved his whole family in the newly-built house?
The attractive side of this redemption policy is the original owner pays the taxes (back) and a flat 20% of the auction price if he/she decides to redeem the property after the auction. In Tennessee, owner pays only 10% of the auction price. This flat 10-20% payment goes and becomes an additional earning to the investor.
Buy a property, say at $20,000 and immediately tell the original owner that you just bought his/her property. When he/she redeems his property and will pay 20%, which will proceed to the new owner, as your additional profit when the time the original owner successfully redeems his property. Do it again, again and again. If land is redeemed in few months, then the new owner receives additional 20% earning for every month passed. For quick redemption and profit, let the owner sign a quick claim deed relinquishing their redemption rights.
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