Tax Deed Property Sales

  I'm always intrigued by any chance to acquire property at a cost far below its true value.  Consequently, I'm a sucker for auctions.  I buy abandoned cars at auto auctions, pianos at school surplus auctions, and houses at county tax deed auctions.  Buyer beware, some things are pretty worthless, and they won't take it back!!!

  If you want to get into auctions, please always assume that what you are buying is about as worthless as an 8-trac tape collection.  Do research the items as much as possible, but even then, avoid getting into a bidding war.  Just let it go and wait until you find a jewel no one else is dead set on buying.

  Especially before bidding on real estate, know what you are getting.  You need to look up all the info you can on the property before the tax sale.  Find out who the owners are, and even talk to neighbors to find out why the taxes aren't being paid.  Check to see if there is a probate case associated with the property, mortgages, quit claim deeds, or any disputes over ownership.  Many counties have quite a lot of info on-line, and it is best to start there.  Find out all you can on several properties on-line, and then set out to visit your best prospects.  Google maps and street view can also come in handy to save some driving.

  Most tax deed investors are looking for properties that are likely to be redeemed.  In these cases, you would earn a very respectable 8 to 12% annual return on your investment.  It is a fairly safe investment if you make sure that you haven't bid on a worthless toxic dump.  Your investment is ultimately backed by an interest in the property that you have bid on.  If the owner's don't pay, after a time, you can take possession.

  I actually look for properties that are NOT likely to be redeemed.  My favorite type of property to bid on is a vacant house or trailer home where the owner has died recently.  You can usually find properties of the recently deceased by cross-referencing the list of delinquent tax owners with the probate records for the county.  Then, to find out the whole story, go visit the properties you found and talk to neighbors to find out what is going on.  I don't usually tell people who I am exactly when I'm out and about.

  If you successfully purchase a property at auction and it is not redeemed during the redemption period,  you will be issued a Tax Deed.  You can take possession of the property at this time, but that is not recommended if someone is actually living there.  Your next step should be to Quiet Title the deed to secure full uncontested ownership for yourself.  If no one challenges you in court for clear title to the property, a lawyer might be able to get the process done for you for about $3500.  Lawyer fees ~ $2000, 3rd Party fees ~$1500.


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IMAGE:  Google street view can save you much driving, but sometimes it is difficult to be certain of an exact address.  Always do a drive-by before you bid on a place.  The house above is one that I was trying to Quiet Title.  I bought it in the auction for $2000.  House not withstanding, the lot has much potential.

  Issues that you may run into however are that the current owners fight you in court to keep their claim to the property.  If there were any technicality errors at any step, the sale of the property might be completely overturned.  Even if just one heir could prove that he or she was never notified of the tax delinquency, the whole deal could be blown.   You would get the original amount you bid back plus interest, but you would lose any court fees and lawyer costs.   In my example, I have more to lose ( $3500 potentially ) than I originally bid on the property.  But, there are some strategies to strengthen one's case and increase the chances of obtaining a marketable Warranty Deed to the property, or at least get a good return on your investment.

1.  Knock on the door and meet the person living there.  Have an open mind and don't be confrontational.  The object is just to find out what the situation is.  They could be renting from an owner who stopped paying the taxes, and might be perfectly happy to pay you rent instead.

2.  Always be open, upfront, and flexible in your dealings with the former owner.  You don't want to incite them into fighting you in court.

3.  Find out what the current owners want to do.  If the property went through probate, be sure to research who all the owners are.

4.  Find out if they will pay you rent, or if they want to buy your interest in the property off as soon as they get their money together.

5.  Tell them about the money at the county tax office that was paid in for the property ( your bid at the auction ).  Any amount in excess of the back taxes is due to the owners.  If they take that excess money, it strengthens your claim to the property in the Quiet Title hearing if they later decide to challenge you for ownership.

6.  Offer a sum of money in exchange for their signing of a Quit Claim Deed granting you that person's share of the property.  If there are feuding heirs to a property, you may be able to secure signatures of all but 1 or 2 of the heirs.  That dilutes the value that the remaining heirs have in the property, and that makes it more difficult for them to find a lawyer to take the case when such a low amount of value is left.

7.  Remember that you are in the driver's seat.  They can never sell or borrow against the property as long as you own the Tax Deed to it.  Ultimately, you can also have them evicted, but exhaust all other possibilities first.  You don't want to end up paying out more for court costs than the place is worth.

As it turned out, the owners redeemed the property at the very last minute.  I got a good safe 12% interest off the deal, and no hassles after all.  Of course, no windfall profits either.  If any of you have any real experience in this area, please post your ideas in the comments section.

Back Yard Blacksmith ... really, you can do it!!!

Blacksmithing does take some time to learn, but it is fun, and you can make money at it.  Youtube is a great source for ideas for stuff to make and how to make it.  Here are a couple of videos to get you started.

If you haven't figured it out by now,  I'm not big on looking cool, or having all the "right" tools for a job.  I'm more interested in finding the cheapest way to get started.  That said, here is a list of items that you may need to acquire or make:

1.  Forge -- steel box with a hole for the blower, and another, grated hole, for the air to exhaust through the coal to keep it hot.

2.  Squirrel cage blower or reversible shop vac -- it's good to have a foot switch so it is easy to turn it on and off

3.  Fuel -- Coal, charcoal (optional), wood (optional) -- the later items will give enough heat to bend and shape, but coal lasts longer and gives enough heat for welding.

4.  Workbench -- sturdy wooden table, and bolt down all sorts of heavy pieces of steel to use to shape and form your works of art.

5.  Small and large hammer

6.  2 pair of pliers

7.  poker stick

8. At a scrap yard, you can buy scraps of pipe that have a flange welded to one end.  These are easy to bolt to your table and are great for forming curved shapes.   Use different sized pipes for different curve radii

9.  Anvil -- any thick heavy piece of steel will work.   I used a 1" thick x 12" dia pipeline head cap that I got as scrap.

10. Watering can to reduce coal waste due to unwanted burning.

11.  Bucket of water to quench the steel.

Once you've got a fair sized cache of finished items, you can get a booth at any small town art festival for $25 to $50.  In my experience, items that were priced in the $5 to $10 range sold the best.  It also pays to have a wide variety of products for sale.  I made easier money mixing in some dollar store items with my finished iron works.  I would hang a little (made in china) birdhouse on a $75 iron work.  People would admire the iron, but buy the $5 birdhouse.   That's ok, I was making $4 off each one and didn't have to spend  a day working at it.

More expensive items sell best in a real store ... around Christmas no less.  I sold the candle stand in the above video to a shop owner in a mall.  He paid me for items after they sold in his store.

Selling Junk Online

I'm a big fan of buying stuff on ebay.  I've gotten some good deals there.  But, when I checked their fees, I wasn't too impressed with the idea of trying to sell stuff there.  So, I googled "ebay competitors" and after checking all the results out, I found one that I liked.   It's at www.webstore.com and it is free to list your items there.  The format is very similar to ebay, and you can receive payments via paypal.  I'm just getting started, so I have no idea how you get your money from paypal.  I'm not worried though, whatever I get in paypal credit will just go towards whatever I buy.

My very first item is listed here:  http://webstore.com/id=8241333  
I found two brand new video cards in a dumpster near my work.  They were both still in their original boxes with the driver CD and all.  Like a dummy, I pitched the boxes thinking that I was just going to scrap the cards out anyway, but I did save the driver disks.   If I had saved the boxes, I could have listed the items as "new" on webstore.  They are both new and were wrapped in static bags, but you can't list them as new without the original packaging.


Of course, I have sold many items on craigslist also, but it can be a pain meeting people to close the deal.  I almost wish there were Craigslist stores.  So, when you list something you just drop it off at the store when its convenient.  Then the person goes to the store to pick it up and pay.  I guess the store would have to charge a commission though ... and then the tax-man would want a cut ... ah, never mind.


Anyways, I see a lot of potential in this webstore site.  The market place is international there, and with corresponding variety of products always available ... and a lot more people looking at your products.  Ebay is still huge compared to some of these other sites, but sellers can sometimes build their reputations and customer base up on ebay, and then move to webstore for their repeat customers.


No matter what venue you choose, selling stuff online is definitely something that anyone can do. Just start with your junk/dumpster diving finds, and let your imagination take you from there.

Are you planting gardens or orchards?

Gardens are great, but they require constant effort to get anything out of them.  Then, every year you have to start over, cultivating, planting, fertilizing, and weeding.  Having a garden is a little like having a job.  There is a steady requirement for work, as well as a steady supply things you need, assuming all goes well.

Orchards are much different in terms of when you work, how you work, and when you are rewarded for that work.  Orchards require most of the effort upfront, planting all the vines or trees.   Then you are stuck pruning and watering for years before anything gets big enough to produce fruit.   I like to think of an orchard as a small business.  You can put tons of work into it and never really know if you are building up something that will reward you in the future.  Still, orchards can produce fruit years into the future with little or no additional effort on your part.

Unfortunately, we like to eat everyday, and so we tend to spend most of our time in the garden, aka job.  That's fine, but hopefully you can find some time in the day to work on a business venture that will produce a benefit for yourself years into the future with little additional effort.

This site is dedicated to any ideas on how to make money.  Some of them, while not a job, still fall into the garden category, constant work for any reward.  The ideas I'm really interested in however, are ideas on how a regular person can work on an orchard like venture.  Not everyone can buy up 50 rental properties for cash and hire a management company to rent them out ... or invent an amazing machine that pays royalties for life.  What are ventures that anyone can do, that once they are set up and running, will make money without any additional effort?  Please comment below with your best ideas for us all to share.

Smelting Aluminum

I'll have to admit that this was a whole lot more work than any money I ever got out of it.  Still, times are tough, and the price of metals are going up a lot faster than minimum wages.  At one time, I had a larger furnace to melt aluminum, but this one was a better design and easier to operate.  

Materials:

1. squirrel cage blower (from a home A/C distribution unit for example)
2. metal ducting
3. 55 gal steel drum
4. wire mesh
5. fire brick (special bricks that don't crack at high temps)
6. silicon carbide crucible (the melting pot)
7. Four 50lbs bags of refractory cement (special cement that doesn't crack at high temps)
8. Refractory mortar
9. Various scraps of angle iron / bolts / screws

Steps:

The wood burner-

1. Find a good refractory supply warehouse to get the firebrick, and refractory cements
2. Cut a hole in the side of 55 gal drum big enough to insert the metal ducting.
3. Also, at the top of the drum, make 2 1 ft. cuts straight down about a foot apart to open an exhaust port at the top.
4. Screw wire mesh to the inside of the 55 gallon drum
5. Coat the mesh w/ some of the refractory cement, but of course, leave the hole open
6. Bury the drum if you can, attach the ducting (running it underground about 4 feet)
7. Put an upwards bend in the ducting and set the blower on top.
8. Use more refractory cement to make a door for loading fuel 1ft x 1ft x 3in thick, with wire mesh in the middle to add strength and bolts stick out of the top so you have a way to attach a handle later.
9. Use heavy steel angle iron to build a square frame over the top to support the door in step 8
10. Cover the rest of the top of the 55 gallon drum (around where the door goes) with firebrick, but leave that one side open for the exhaust port.
11. coat the steel angle with firebrick mortar to protect it a little from the heat.

Furnace -

1. Build a foundation on the side of the drum w/ the exhaust port - ~3ft x 3ft
2. Build the walls up with firebrick about 2ft high, leaving one side open for door.
3. Build the door ... mine was angle iron hinged to a post w/ firebrick attached.
4. Build the 'top' (what holds the aluminum scraps while they are melting). It's going to be a large block of refractory cement with a depression to collect the liquid metal and a hole in the middle to allow the metal to drip into the pot below.
-make a cement form 2ft by 3ft by 5in deep
-make another wooden form that's 1ft 8in x 2ft 8in by 1.5in deep and cover it with plywood.
-place the 2nd form (plywood side up) in the larger form.
-set a short scrap of 3" pvc pipe on top of the smaller form
-drill 4 holes into to smaller form around where the pvc pipe is ... 1/2" from the pipe and equally spaced around
-set 4 bolts into the smaller form around the pvc pipe ... the threads need to be down, with the head of the bolts sticking up a couple of inches. These bolts will hold a steel plate over the top of the hole to prevent big impurities from dropping down.
-fill the form with refractory cement
-when the cement sets up a little, remove the pvc pipe
-when completely dry, remove the forms and flip it over
-drill holes in a 6in.x 6in. x 1/4in. steel plate to match the bolts sticking up
-put several washers on each bolt, and then attach the steel plate. It should be sitting off the bottom ~1/2 in.

5. Put the top over the walls of your furnace. There should be a gap in the back.
6. Build the walls up another 2ft with firebrick, but leave a 1ft wide window on one side. This is so you have access to clean out junk and slag that will accumulate on the 'top'.
7. Rig up a steel grate to prevent pieces from falling down the gap between the back edge of your 'top' and the back wall of the furnace.

Operation:

Sometimes I used a bigger crucible and just tilted it to pour the metal rather than picking the whole crucible up. Also, if you want to melt copper, bronze, or iron, you have to pack coal around the crucible. Still just fill the 55 gal drum with wood, but adding coal right around the crucible will raise the temp there enough to melt copper, etc. But, only add clean copper directly to the crucible ... it won't melt over the 'top'.

For aluminum, you can bust up old transmissions or whatever and add the pieces to the top. Oils and paint burn off while it melts. You will need to regularly scrape out junk and slag that can block the flow of metal through the hole.


Additional notes:


 I designed the form for the "top" a little better than what I described above. On the clean out side, I had the side wall shaped like a ramp to make it easier to drag irony bits and slag out of the pool of aluminum. I also had a little lip around the edge of the hole to prevent  irony bits from washing into the crucible.

A Crusty Golf Ball's Second Chance at Greatness

It all started with some errant shot on the golf course, and some poor golfer's ball ended up in the pond.  Well, really I can't say exactly, I wasn't there for that part ... maybe a squirrel stole the golf ball out of his bag and buried it along the stream.  No matter, this golf ball's destiny was not to be dug up by some archaeologist 10,000 years from now.  Nor was it to spend eternity there lost in the golf course's waters.  Nope, after only enough time to grow a few barnacles, it was washed out of the pond and down the stream with about 4000 of its buddies by a good ol' Texas gully washer ... a flood of epic proportions ... that we get every other year or so.

The mother load of deposited golf balls soon lay along a bend several hundred yards downstream.  Seeing so many, I wondered if they were worth anything.  Sure enough, people sell used golf balls on Craigslist all the time.  Some are worth up to a $1.00 each, but I planned to just use the crusty ones for my own driving practice.

If you can find a large quantity of golf balls, it is very easy to wash them up and sell on e-bay, craigstlist, or to a local dealer ( who will find you if you post on craigslist ).

Alas, it was also not the destiny of this one crusty golf ball to end up in the cow pasture behind my place.  The Texas Restaurant Association had much bigger plans for it.  They found my add on Craigslist and bought about 1000 balls from me for a whopping 10 cents each.  Then they sold them, ugly ones and all, for $20 each.  Wow, if only I could figure out how to get a markup like that?!?!

I could write more of the story, or just show the rest on video ... enjoy!

As you can see, our crusty golf ball was destined for a second life, and to make somebody $1000.

Just getting started ... buying gold

I've got the gold bug, but there aren't any good mountain streams with gold nuggets anywhere near where I live. So, I'm stuck with buying gold from other people. I'm hoping I can find some folks with old gold jewelry that they would rather have cash for.

Of course, it would not be good to pay full price for some item that is only gold plated. So, my first challenge is to learn to identify real gold, and accurately appraise items.

Here's a video on using an electronic gold tester, a magnet, and a file stone:

Here's a close up of the gold cross that was testing positive for 10K gold in the video.  It's actually marked 14 KT G.F. and after some googling, I discovered that the G.F. stands for "gold filled" and that's not so good.  It really means that it has a thick gold plate, and is only 1/20th by weight 14KT gold.  So, its really not worth much if you were buying it for scrap gold.