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Like I said, the starting bid is everything owed. It says so right on the county website. The former owner cannot claim the land, once the sale is complete the land is free and clear. Similar vacant land is selling from $30-$60k. Small scale farming is permitted. Here's a link:
So you are hoping to get it for around 1/3 of its market value? Awesome deal if it works out!
Can you talk to someone locally who knows how these auctions usually go in your area, and what potential pitfalls to watch out for? A realtor or real estate lawyer, or land use lawyer?
Just want to be sure you've checked the zoning. There would be other farms somewhere nearby....you said something about 40 minutes. It's zoned for what you want to do?
The other lots. Are they priced that high because they are buildable lots are the? With the expectation that they be built on and perhaps rules for that and restrictions too.
I remember long ago a tax sale in Lawrence, KS where a University of Kansas student purchased a parcel that was now in the middle of the Kansas River due to its changing course after a flood. He knew exactly where it was. Thought it would be "neat" to own it. And I bet a couple of years later it was back in the tax sale again.
I'm going to attempt to purchase vacant land at our county tax foreclosure auction at the end of this month. I've never done this before and have no idea of what to expect. There is only one parcel with an actual house on it, the rest is vacant land. There are about 10 parcels to be auctioned off, and I'm interested in 2 of them. Hoping I'll get something. Does anyone have any experience with this? What should I expect? Will there be investors stealing everything? The starting bids on these properties are about $5k. They are all 2.5 acres. I figured the parcel with a home on it would be what people were after (so they could flip it), but wasn't sure about vacant land. I only have $13k to spend.... do I have a chance??
I've participated in a few tax auctions here in Michigan. Sure you have a chance--it just depends on who shows up to bid on the properties you're interested in. If it's vacant land, more often the bidders are people who live adjacent to the properties...or they could be people like you looking to get a steal or to eventually do something with the land. People flip vacant land, too--the land doesn't necessarily need to have a house on it for people to want to "flip" it for a profit. So, yes, there will be investors.
Of course, lots of land gets foreclosed for back taxes because it's unbuildable or, at least, difficult to build upon. But--surprising as it may sound--a number of people merely forget to pay taxes, or mistakenly thought they had paid taxes for any given year. People move and may fail to update their address with the assessor. And since Michigan probably has the quickest tax foreclosure process in the country, we also have some of the highest tax foreclosure rates--even on valuable properties.
It sounds like you've been doing your basic research, so that's good. Make sure you know what the yearly taxes are. You will be responsible for the full year of taxes without proration. Also, double check to make sure whether there are special assessments levied against the property. Special assessments are (usually) for multiple years and the future special assessment requirements will not be wiped out by the tax foreclosure sale. I was interested in bidding on one cheap acreage parcel in Hartland Township...until I found out it had a special assessment of over $40,000/year--which quickly nixed that opportunity.
Also, make sure that there are no Michigan or IRS tax liens on the property. Tax liens are not wiped out by foreclosure.
Another thing you might consider is to see if a title company will issue a title insurance policy on a particular parcel. I've never tried to do that on a tax foreclosed property, so I'm not sure if any title companies will readily do that. Although Michigan law states that all ownership interest of the prior owner is extinguished, I've heard stories of some people trying to reassert their interest to a property. Even though they may not prevail, that might be one headache to contend with. I know that some attorneys advocate for doing a Quiet Title action, but sometimes I think they're just trying to drum up business. I think the fact that you are just looking at lower-valued vacant land reduces the chances of those types of problems.
One other thing that I would recommend, though, would be to look at historical aerial photos of the property to see if you can determine whether the land had any prior use which may be questionable. If it just shows up as vacant land, with no buildings, soil disturbance, or evidence of debris...then you're probably okay. The only real issue with vacant land is the possibility of prior contamination. (You can view aerial photos online by searching for Detroit Edison aerial photos--Wayne State Univ. has the collection and they are available to view for free.)
Finally, if you can pick up a piece of property, try to get a parcel which would be a good home site. That way, even if you decide not to pursue your organic crops, you could sell it and make a profit. Or...you could sell it after a year (to qualify for long-term capital gains, and possibly be exempt from all federal income tax if your income is low) and then use the proceeds to buy an even larger piece of property. I'm a strong proponent of organic agriculture so I wish you luck.
If you have any questions that you'd rather not post to the list, feel free to send me a direct message.
I sorta doubt that anyone is buying land in that part of the country for $30-$60k. Now folks may be asking that, but are they really getting it???
You'd be surprised. Oakland County has some of the most affluent communities in Michigan, plus a few that are less so. A 2.5 acre parcel in many Oakland County communities could easily sell for $30,000. If it's lake front property in a choice community, a one-acre parcel might go for a million and up. Location, location, location.
My son, who is really smart in these type of things, got into tax liens a few years ago. The idea was that people would either redeem the liens ... or he would get the property. He bought a load of these liens, then, for a lot of reasons, he lost a ton of money to 'the experts' in the field. -
-- If you can cleanly buy the property at a reduced, foreclosure price, then go for it, but, be careful! --- There are a lot of 'experts' out there who are not oblivious to a $40K+ profit on these properties - just 'waiting to be picked-up'.
My son, who is really smart in these type of things, got into tax liens a few years ago. The idea was that people would either redeem the liens ... or he would get the property. He bought a load of these liens, then, for a lot of reasons, he lost a ton of money to 'the experts' in the field. -
-- If you can cleanly buy the property at a reduced, foreclosure price, then go for it, but, be careful! --- There are a lot of 'experts' out there who are not oblivious to a $40K+ profit on these properties - just 'waiting to be picked-up'.
Michigan does not have tax liens. Property in Michigan is directly foreclosed upon for unpaid back taxes and title then vests solely with the County (or, in some cases, with the state of Michigan, if the particular county opts out).
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