California has always been known for Hollywood, its congested freeway system, its beaches, and its mild weather among other things. What many people don’t know is that the Golden State plays host to one of the most popular auctions in the world annually. Any guesses as to what all the fuss is about? It might not be what you think, but no secret to you if you read the title. It’s the Los Angeles County Tax Sale Auction.
You know…it kind of makes sense. Geographically it’s one of the larger counties in the country, and it boasts the largest population of any county as well. Because of this and other important factors there are a HUGE amount of tax deeds to choose from. The size of the auction list is the size of a small phone book most of the time, and will contain in the tens of thousands of tax deeds. Fifty, sixty or even seventy thousand wouldn’t be an outrageous number. The town I live in has only 25 thousand roughly. Why am I telling you this? Simply, because you need to know, like I said before, there are a huge amount of tax deeds to choose from, and that more tax deeds means more opportunity for making money. After all, we didn’t start doing tax sales just for the fun of it. With that being said, let’s get into some of L.A County’s tax sale details.
L.A. county generally holds their tax sale/tax deed (which ever you prefer) auction twice a year: usually in the summer and in the fall. So if you missed the one you can always attend the other, and with the large amount of deeds that would be fine because you’ll still have plenty to choose from. Registration is required to attend the auction, at least 2 weeks before and usually no more than 4 weeks from the start date. A required deposit is also very common, and will vary depending on the county.
California uses a ‘Premium Bid’ method for their bidding process, which simply means the highest bidder will receive the tax deed. They also use a couple other types of methods that aren’t as popular, that are used depending on the situation. One of the methods even allows you to contact the property owner prior to the auction. This is to your advantage because you have a lot better shot at the properties you want without the possibility of them going to auction and someone else winning the property.
One last important fact about California Tax Sales is that after you are the winning bidder on a certain property, CA. gives the original property owner the opportunity to make sure that this is indeed the right property being sold. I say original because you are now the new owner. So to explain, let’s say the county happens to make a mistake or you do, in your research, and the wrong name is put with the property or something like that. The property owner can do their own research and if they find there has been a mistake made then they can get their property back. Not to fear though, because you as the investor will still receive a 6% return on your money. If you are diligent in you research as well, this shouldn’t ever be an issue. I always preach due diligence on your part as an investor and here is a prime reason why. In fact, I can’t ever think of a time this has happened when the investor has done their due diligence and researched the property completely. One thing I would recommend to you is that you look into a course that teaches you how to invest in tax liens and tax deeds. There are many out there so do your research. I have reviewed several over the years and have found some good ones and some not so god ones. One that I have been impressed with more recently has been No Risk Investor. It is thorough in its content and easy to understand. The customer support people I found to be very good too: polite and knowledgeable.
As usual, thanks for reading my article. I hope you take the time to comment and let us know how we can improve. Maybe a specific topic to cover or that the articles could improve in some way or that we are just fine and have no reason to change in any way. Ha-ha! I’m sure it won’t be the last one, but let us know when we are doing well also. Until next time, happy tax sale hunting.