Pre Auction Investing
Under the tax deed sale method, the property itself is sold. At the sale, the minimum bid is generally the amount of back taxes owed plus interest, as well as costs associated with selling the property. If contact can be made with the property owner a deal may be struck before the auction thus avoiding a bidding war.
After finding a property due to go to auction the owner is contacted and negotiations begin. Depending on the situation a successful negotiation will result in the owner quit-claiming the property for cash. Another strategy involves an investor paying off the taxes and carrying a note allowing the previous owner to retain the property. Laws pertaining to pre-auction strategies vary from state to state so research may be necessary.