You can make money with tax sale overages. Let me show you exactly how to do it. This is really simple and straightforward.
What Are Tax Sale Overages?
So, first, let’s talk about what tax sale overages are. Tax sale overages are monies that’s left over after a property, meaning a piece of real estate, is sold at a tax foreclosure auction. And you might ask yourself, why would something be sold at the tax sale auction? What’s happened is that someone didn’t pay their real estate taxes. If you don’t pay your real estate taxes for three to four years in every jurisdiction in America, they will sell your house. So they can generate the money to pay those taxes.
Here’s the thing: generally taxes are only one and a half to maybe two percent of the home value per year, that’s the average across America. Let’s just use a simple one because it’s easiest: 2%.
Let’s say that you have an average house in America. So you have a $400,000 dollar house with $8,000 dollars a year in real estate taxes. If you don’t pay those taxes for three years, that’s $24,000 dollars worth of taxes due. And of course, there are interest and penalties. Those get pretty high with taxes. Let’s just say that with taxes and penalties your tax bill doubled, so instead of $24,000 dollars in taxes that are due, you have $48,000 dollars in taxes that are due.
The county at that point is going to say, hey we need to get these taxes, we’ve got to pay the firefighters, the police, the mayor, fix the roads, take the trash, got to do all those things that a government needs to do. They are going to force that property to an open public auction tax sale. Bidders like you or me could go there and bid on houses.
Usually, houses are sold at a discount, generally a 10% to 20% discount. If you’re talking about a $400,000 dollar house, it’s probably going to sell for anywhere from a 10% discount which would be $360,000 dollars to a 20% discount which would be $320,000 dollars. You bought a $400,000 dollar house for $320,000 dollars. They owe in taxes $48,000 dollars. The rest of the money is called the overages.
Why These Monies Are Available?
Now, that money is eligible to be claimed by the former owner. You might ask yourself, why would that be? Why would they be able to claim that money? Well, it’s really simple. The county only needed fifty thousand dollars to pay the taxes. But that leaves $270,000 dollars left over, and of course, the person to get that money is the former owner. Because that really represents the equity in their house. The county doesn’t get to keep $270,000 dollars because they only required $50,000 to cover the taxes. So that $270,000 in most jurisdictions, that’s available to be claimed.
The former owner has to claim the money, and they have to fill in the appropriate forms and work through that bureaucratic system. Most of the owners have no idea that this is even the way that it works. They certainly don’t attend the sale.
In the tax sale overages business, the way that we make money is we get the list of these monies that are left over after the tax sale, then we find the people. It’s a process called skip tracing, so we can find the people. And then we literally pick up the phone and call them, tell them the good news that there’s money that’s available for them. We talk to them about hiring us to get the money for a percentage.
Now, often people ask me the question, why don’t they just go get it themselves? They don’t know about the money, they don’t know it exists. Because they don’t ask about it. When we call them, we tell them we found a big refund that they’re owed and that we can go get that money for them. It doesn’t cost them anything.
What Will We Get?
A typical percentage for us is 40%. Sometimes they’ll be at 30% on more expensive claims. If it’s a $200,000 claim, I’m very happy to take 30% on that. Because that’s going to be $60,000 dollars in my pocket. Quite honestly, this is around eight hours worth of work.
Keep in mind that, unless you, or I reach out to these people and call them and tell them this, they’re not going to get their money. The vast majority of this money is forfeited to the government. And the word for that is called escheatment. What happened is the money escheats to the government after the deadline.
That means after a certain amount of time passes, when the money’s been sitting with the government, not claimed, it just forfeits to the government, and it’s too late to get it. That’s what we lawyers call it, statute of limitations. That means you can’t make the claim after that. The money is gone. There’s no excuse like, oh I was in the hospital, I was in a coma, I just woke up from my coma. A deadline’s a deadline, and in the law, deadlines are deadly.
So there’s no coming back from that. We’ve been doing this business for over 10 years.
One of the things we do in our part of the business is, we have research on all the states and how it works in each state and very importantly, how much time you have to get your claim in each state. Because you don’t want to miss that. If you go into this business, you certainly don’t want to be submitting things late.
We’ve researched all the states so that we can just give you that information, We give to people that are involved with the education side of our business.
We have a very large claiming business where we help people get their money back. There are 3,000 properties a day sold at tax sale. There’s no way that we can ever keep up with it all. By the way, that number’s from JPMorgan Chase from a study, they did a couple of years ago.
There is no way we can keep up with all those overages that are generated. We do business, but we also educate people in the business. We get lots of questions from people about, why don’t just keep it all to yourselves. When there are 3,000 properties a day sold at tax sale, there’s no way we can keep it all to ourselves, and it’s not necessary!
Why I Love The Overages Business?
Strategically speaking, I love the overages business, because I get to help people. We call them up, we reach out to them, and we get the big windfalls that they could really use. But I also want to empower other people who want to make their lives better and have a business that’s really amazing.
I want to empower them to succeed in this too. As with 3,000 properties being sold at tax sale per day, we have no shortage of opportunity. But we do have a shortage of people being helped. The majority of the money escheats, meaning forfeits to the government because no one ever makes the claim. That’s because someone like you or me didn’t call them up, and tell them there’s money available. Then go and get the money. That’s why we do the part of education.
I love empowering entrepreneurs to go out there and have a great business. I love indirectly helping the people they help because when one of my students goes out and helps someone, I take a little mental credit for that. They don’t have to give me any money, I don’t want money from it. I just want the happiness of knowing that people were successful.
I do make money at it also, but there is a secondary reason also. I like to help people who will help themselves. So people will take on this business and go and crush it, and also help all those people that have just been flattened by the foreclosure monster.
You know, those are people that lost their house at a tax sale, it’s absolutely dreadful.
What If You Get A Big Opportunity
We have a free mini course. And we would love to see you in the course and help those people who lost their home in foreclosure auction. Click this link and enroll the course right now.