Plan B: Buying Property at a Tax Sale

In order to save money, I've come to the conclusion that we're going to have to spend a little first. Sound a little ass backwards? Now wait a minute, and hear me out....

I have a plan...


Chances are, you've heard about buying properties and houses for cheap, cheap, cheap at tax sales. As far as I know, every county in the United States has some sort of property tax sale every year, and my county is no exception.

Here's a little more about buying a house at a tax sale.

As I mentioned above, every county has a tax sale, which are usually auctions. The properties and houses at these tax sales are being sold because their owners were unable or unwilling to pay their property taxes. That's bad for them and great for anyone that wants to buy a house cheap. The county wants to recover their money somehow, so they offer properties and houses to the public for very little money - usually in the form of an auction. Typically, the starting bid on a piece of property or a house starts at the amount of back taxes plus any fees.

In my county, there are three tax auctions each year.

Upset Sale



The Upset Sale* is the first of the three tax sales in my county. The minimum bids on properties in these types of sales typically start at the amount of any back taxes plus some fees. In my county, this means that some properties start with a minimum bid of less than $1,000.

Houses and properties in these auctions, however, are not without possible problems. Before bidding on these properties, you need to do a little homework.

First, you need to find out if there are any liens or judgments against the property owners or the property itself. If there are and you buy that property, there's a good chance that you'll be responsible for these. Meaning that you'll most likely have to pay big bucks to either pay off a lien holder or judgment, or a lawyer to get out of it. So, make sure you do a thorough title search on the property before bidding. I'll get into this more in my next post.

Second, you have to check out the property on paper. Your local assessment (or similar) office should have most of what you're looking for. The nice ladies and gentlemen at this office can usually help you find a parcel number for the property you're looking at and pull it up on a computer. You'll be able to find out the estimated value of the property, how many buildings are on it, how large it is, where it is, and where its boundaries lie, along with a bundle of other information. I found a neat website called Property Shark where I can do a quick preliminary search before I hit the assessment office. I'm sure its not 100% accurate, but it seems to be pretty close.

Finally, you need to check out the property...in real life. This is where it gets tricky. Okay, it gets downright difficult. When looking at buying a property at a tax sale, there's a little catch - you aren't allowed to set foot on that property. If you do, you could get charged with trespassing. So, you need to get as close as possible to the property - legally - to see what type of condition it's in. If necessary, buy a good pair of binnoculars...

Judicial Sale



"What happens if a property doesn't sell at an Upset Sale?" you ask...

It gets put on the list for whats known as a Judicial Sale. In my county - as with many other counties - if a property doesn't sell at the upset sale and the property owners don't pay the back taxes before a certain time, it gets put up for auction at a second tax sale, a Judicial Sale.

Properties and houses in this sale are usually free and clear of any liens and judgments and other bad stuff. But, don't let that stop you from doing your homework anyway! The minimum bids on these properties also usually start at the cost of fees and court costs. In my county, that can mean the minimum bid on a property might be as little as a few hundred bucks. Of course, with a free and clear deed and a price that low, get ready for some crazy bidding!

Repository Sale



"What happens if a property doesn't sell at a Judicial Sale?"

It usually goes on another list to be sold in another sale - a Repository Sale in my county. This list consists of all the leftover properties that didn't sell the first two times around. Hours in front of Google Maps satellite view, two days of driving around, and $50 in gas after receiving this list, I finally figured out why they didn't sell.... No one wants them - and for good reason.

Most of the properties on this list are pretty well junk. They're usually something like empty lots or dilapidated mobile homes and houses. However, I got ahold of this list pretty late in the game, so there might be some good stuff on it right after the Judicial Sale. And, from what I understand from my "inside source" at the county courthouse, they'll accept just about anything we bid and bidding starts at $50 to $250 here, depending on the property. Not a bad way to score a few acres for a future building site.




So, there's my rundown on tax sales, at lest in my area. If you haven't figured out what my plan is by now...well, I don't know what to tell you.

How is dropping a couple grand going to save me money? Simple - no more rent!!! We pay over $500 in rent each month. I figured out that T and I have spent about $20,000 in rent during the past three years alone. In my area, that's the price of a small, yet livable and decent, house or piece of land.

In the next few weeks, I'll be adding more about tax sales, and I'll even try to take you along on my first tax auction. Fun, fun!! Here are a few ideas for future posts:

• How to Find Properties For Sale on Back Taxes
• How to do a Title Search
• What to Look For in a Property For Sale on Back Taxes
• How to Find the Best Properties at a Tax Sale
• Buying Property at a Tax Sale: Should You Feel Bad?

Plus, I'll let you know exactly what influenced my decision to buy a house this way. It makes for an interesting story.

If there's anyone out there with any experience in buying property on back taxes, feel free to comment with any tips or advice!

*Fun fact... According to the lady at the courthouse, Upset Sales are not so named because the owners are upset about their properties being on the auction block. They're called upset sales, because the minimum bids start at "upset prices", or the amount of any back taxes, etc, etc.

Death By Electric

In my last post, I went through ways that I could stop spending my money and start saving it. After getting my electric bill last month, however, I now realize that I missed one big thing that’s just eating my money away.

You guessed it…my electric bill.

Now, my electric company – the lovely bunch of people they are - did just raise their rates for electricity, but after taking a look at my bill, I know that’s not the only thing causing the increase. Basically, I went from about $50 a month to about $80. My math might be wrong here, but that looks like about a $30 increase, and it’s not all caused by the nasty electric company. It’s obvious to me now that my household is using entirely too much electricity.

During the last couple days, I took a little tour of my house, trying to spot our problem areas. I was actually surprised at what I found…

1. Three Cell Phone Chargers Plugged In
   
   Somehow we had left these chargers plugged into the wall sockets, without them actually being connected to any phones. Here’s the best part though – we only have two cell phones, one of which gets used regularly. I know that these don’t waste enough electricity to make a huge difference, but they are energy suckers, nonetheless.
   
2. Two Televisions – One of Them On
   
   We have two medium sized televisions in our apartment. One of them is the dedicated movie TV, and the other is hooked to our Wii and Playstation for the kids. My darling children have gotten into the habit of simply leaving the game TV on whenever they walk away, partly because they don’t want to “lose their spots” in the games they were playing. The logic escapes me, but it also brings me to my next find…
   
3. Two Game Consoles – Both of Them On
   
   Again, not huge electricity wasters, big still energy suckers.
   
4. One Laptop – Plugged in With a Screen Saver Running
   
   Who did that? Guilty! Unlike T, I have a terrible habit of just leaving my laptop plugged in and on – all the time. I think my laptop gets shut off maybe once or twice a month, if it’s lucky. I know, it’s terrible on the old girl, but I still do it.
   
5. Lights Left On
   
   Upon further inspection of my home, I found that *someone* (not pointing any fingers) left lights on in the dining room, bathroom, entry way, and both of my children’s rooms. Keep in mind that this was in the middle of the day. I don’t know who would do such a thing! Also, my children insist on having a light on in either the dining room or the kitchen, because like many children and myself, they are afraid of the boogie man.
   
6. Clean Clothes in the Dirty Laundry
   
   Another habit my children have snuck it at some point in time is throwing their clean clothes into the dirty laundry basket. What fun! I don’t know if they do it because they aren’t sure whether the clothes are clean or dirty, if they just don’t feel like folding them, or if they just like messing with me. I’m guessing it’s a combination of the latter two. Either way, I still wash them – partly because I’m not sure whether they’re clean or dirty, and partly because if they were actually clean before they hit the basket, they’re dirty afterward.
   

So, there are my observations after my initial home inspection. Now, what am I going to do about it?

Well, the answer to the first four problems can be summed up in two words: power strips! The cell phone chargers, TV’s, game consoles, and laptop are all going to be plugged into power strips. Not only do televisions and most other electronics use electricity when they’re on, but they also draw “phantom power” when they are turned “off”. Apparently, electronics that can be controlled with remotes – like televisions and DVD players – are two of the biggest culprits, along with electronics with digital clocks and LCD screens. Sneaky little suckers, aren’t they? Switching off the power strips when these electronic devices aren’t in use actually turns them off off even when they’re…well, off.

There’s only one solution for the light problem. It’s time for another “kid lecture”. I know how much I enjoyed the lectures my father gave me when I was a child, and I’m sure my children find mine just as inspiring and entertaining. Also, to solve the “light at night” problem, I think I’ll just opt for a couple ingenious little contraptions called “nightlights”.

Laundry problem? same thing – lecture time. Although, since the weather is finally getting nicer, I think it’s about time to install a clothes line in my postage stamp backyard. I figure this little maneuver will help cut down on the electricity used by my dryer when my darling little ones attempt to ignore my laundry lecture.

Hopefully these little tactics will help me use less electricity and stop paying outrageous electric bills.

Take a look around your house sometime? What could you and your family do to use less electricity?

How to Stop Spending and Start Saving

So, I've started my new account in order to save more money toward building a house. Now, all I need is extra money to put into that account. Unfortunately, my ISP put a damper on that last week, and I'm struggling to catch up.

Although I do realize that I need to focus my efforts on making more money, I also realize that I need to stop spending money as well. Recently, I've been keeping an eye on my spending habits. Unfortunately, I've come to realize that they haven't been pretty lately. So, me being the Queen of Plans lately, I've devised a nice little plan to help me stop spending and start saving more money.

First of all, I'll be cutting out my problem expense that I don't really need.

• Problem Expense: Dinner Out With the Family
  
   Lately, I've been going out with my family for dinner more than I have in the past few years. There's a couple reasons for this. First of all, since I work at home, it's nice to get out of the house once in a while. Also, it's so much easier and quicker than planning and making dinner at home.
  
  Although it's fun and quick, do I really need to be paying for those dinners out? My solution? Eat full dinners out less often. Instead, settle for desert out every once in awhile. As for the time factor, I can start letting other people around the house help more often. Too often I don't take advantage of offers of help from T and the kids.
  
  
• Problem Expense: Impulse Buys
  
  Before taking a good look at my spending, I prided myself in being able to resist impulse buys. Nope, I wasn't the gullible type that fell for proper shelf placement or sweet advertisement. Not me! Wrong... Lately, I've found out that even I can fall prey to the wonderful world of marketing's power.
  
  My solution? Stop spending money on stupid little things that I simply don't need. If I see something that I think I have to have, my plan is simple. Wait. That's right - just wait. I'll give it a day - or two. If I still need said impulse buy, I'll wait one more day. If I haven't forgotten about it and still need it after that amount of time, then I must really need it, and I may allow myself to buy it.
  
  
• Problem Expense: Books
  
  Yes, I'll admit it - I have a problem. A big problem. About ten big shelves worth of a problem. I am a book fiend! If I see a book I might find interesting, I buy it. The other day, in fact, I bought two particularly interesting books. Wanna know what they were? Well, I'll tell you. One was Cost Accounting: Traditions and Innovations, one was Genetics: Analysis of Genes and Genomes 7TH EDITION, and the third was Handbook of Biochemistry and Molecular Biology, Fourth Edition. I can't make this up. I actually bought these books. I have no idea why - probably because they had nice shiny covers and really complex titles that would look great on my bookshelf.
  
   Of course, I did buy them used and only paid $2 for each of them, but that's no excuse! I still bought them. That was $6 that could have gone into my new Big Person account.
  
  This is a tough one, and I'd like to say there is no solution. That it is what it is - a terrible addiction gone bad. However, I am a big enough person to admit my own weaknesses. Books - in all their glory and evilness - are my weakness. I'll approach books like I approach impulse buys, because ultimately that's what they are. Questions to ask myself before buying books: do I enjoy the subject? Will I read it - soon? Do I even know what the book is about?? If I answer "no" to any of these questions, I will not buy the book, and put the money in my Big Person account instead.
  
  
• Problem Expense: Cigarettes
  Yes. I am one of those uncool, stinky people that still smokes, even though I know it's not the "cool" thing to do anymore. I'm so ashamed (I say as I light another). Go ahead, yell at me and try to make me feel bad. It won't work, so keep wasting your breath.
  
  I like smoking. I enjoy it. It's like sanity in a tubular, smoky form for me. I'm only going to quit smoking for a damn good reason! Of course, it's going to kill me and my kids want me to quit. They keep telling me I'm going to DIE! That I should just not do it anymore. Ya know what? They're 5 and 8, and they're smarter than me when it comes to this. Not to mention, it's a very expensive habit, even with $30 a carton reservation cigarettes.
  
  My solution? Ummmm...... Well, I suppose it's really time to quit this time. This one's going to be the hardest one of all. I suppose I should gradually step down, so I don't kill or possibly maim anyone close to me. At this very moment, I'm going to say that I smoke roughly a pack a day - which is really rounding up, but I'm going to give myself some breathing *cough* room *hack* on this one. This will be a new goal for me: stop spending money on cigarettes, and start saving it!
  

Well, there's a list of some of my major expenses. I know I'm forgetting some, but these will do to start.

What about you? What can you stop spending money on?

Ally Money Market Account: First Impressions

Finally! My new "Big Person" account I was telling you about.

I finally decided on an Ally money market account after another writer friend recommended it. The company itself has been around for quite awhile - 1919 - although they just recently changed their name. They also have decent reviews and rates, and no minimum deposit or balance.

Here's a quick rundown on the key features of an Ally money market account:

• No minimum opening deposit
• No monthly fees
• Free debit card and checks (which I won't use, but they might come in handy)
• No ATM fees
• Daily compounded interest
• 0.84% interest/APY as of March 2012
• $10 fee for more than 6 electronic withdrawals (Federal law)
• Unlimited ATM withdrawals

Anyway, opening an Ally money market account wasn't exactly a breeze for me at first, since they don't support my main browser, Opera. This isn't really all that unusual, however, and I just switched over to Internet Explorer, my backup browser. Once I did this, the sign up was a breeze.

I entered all the normal personal information, and funded my account with my brick-and-mortar bank account. I just sent $25 at first, but at the beginning of next month, I'll begin adding more.

A short time later, the test deposits were sent to my account. I was able to login to my Ally money market account and verify my bank account. At this time, I also added beneficiaries to my account as well. Which is nice, 'cause if I get hit by a bus tomorrow, each of my kids will receive $12.50. Lucky them...

So, there's the rundown on opening an Ally money market account. And here's my updated goal tracker thermometer thing:

Easy Fundraising Ideas Update  Fundraiser Thermometer Here

I know - it doesn't look like the red stuff moved at all, but it did! I swear...

Needs Vs. Wants When Building a Home

In order to build a home, the needs and wants of the family must first be taken into consideration. The needs of the family could be a certain number of bedrooms – one for each family member, for example – while the wants usually include some of the unnecessary luxury features, like an in-ground pool.
I have my own set of needs and wants for building a home. Obviously, my needs will be more important than my wants, but if I can build a home with just a few of my wants, that would be pretty damn great.
Here’s a short list of the things that I need versus the features that I just want:

Needs	Wants
Three Bedrooms. Right now we have four people in our family – myself, my fiance (T), my daughter, and my son. Obviously, T and I will share a bedroom, while my daughter and son will each have their own separate rooms.	Four BedroomsAs I mentioned <—over there, we absolutely need three bedrooms for our family. Of course, another child is not completely out of the question at this point. . .
OfficeBecause I work at home, I need a home office. Working at the dining room table or in a little nook in my bedroom does in a pinch, but it’s really very difficult.	LibraryYes, a library isn’t necessary for every home, but you may not realize how I am about my books. I have tons – almost too many, if that’s possible. A room set aside specifically for my little treasures would be perfect. Ideally, it would also be hooked to the office.
Different Means of EscapeI know, this may seem paranoid, but I’ve always had an odd fear of being trapped in my home during a dangerous situation, like a fire or a burglary. To err on the side of caution, several different means of escape, such as several doors – front, back, and side, for instance.	Panic RoomYes, this one’s really paranoid, but when I build a house I want a panic room – ideally one with all the bedrooms connected to it. Even if I never use it, it’ll still be pretty cool to have.
Adequate StorageThis one’s pretty self-explanatory. Over the years, people often seem to acquire a lot of “stuff”, and we need someplace to stash it.	Root CellarIf a full basement is not possible, I’d like to find a way to build / dig out a root cellar.
Counter Connecting Kitchen and Dining This makes serving meals SO much easier, plus it serves as extra seating for large family dinners, if necessary.	Spiral StairsPretty impractical, but I like ‘em, so I want ‘em.
Open-ish Floor PlanI hate feeling confined, and I can get a little claustrophobic at times, so a somewhat open floor plan is a necessity.	Children Confined to One FloorNo, I’m not some kind of deranged mother that’s going to stash her children in the attic, but I would prefer it if they had their rooms on the first floor. The master suite, of course, would be upstairs.
Convenient, Reliable Heating SystemI’ve had “issues” with heating systems – or lack thereof – all my life. Ideally, I’d like to have a woodstove. While it requires a little more work, it’s cheaper and so much more reliable than electric or fossil fuel heat during a power outage.	Backup HeatAs mentioned <—over there, heat is an important concern for me. I like to be warm when the temps drop to –67 degrees in my area. I know heating with wood would be a very daunting task after a while, so a backup heating system would be great for my “lazy days”.An additional backup heating source would be great!

So, there you have it – my first list of needs and wants when I build a home. I’m sure there’ll be more but those can wait for future posts.
Am I missing anything? What would you need or want when / if you build a home?

Money! Money! Money!

Buying a home or building a home typically involves a huge amount of money. A huge amount of money that most people don't usually have laying around or stuffed under their mattresses. In fact, the majority of people will need to get a home loan in order to successful buy or build their homes.

Unfortunately, getting a home loan isn't the best option for me right now. First of all, my credit isn't perfect. It's not horrible, but it's not perfect. After pulling my credit report, I found out a few things. Although I do have a few accounts in good standing with the whole "Paid, Never late" comments, I do have a few negative accounts as well - mostly very old medical bills, but negative nonetheless. Once I pay these off, I'll probably be able to get a home loan after my credit score goes up.

However, I am also a self-employed freelance writer. Since I've only been at it for two years, I'm not exactly in the best situation for getting a home loan.

Which means that I need to look for more creative ways to pay for my timber framed dream. This includes the land, which will ideally be a few acres at least, and the cost of the initial building materials to make the house "livable".

So, here's my tentative "five year plan, otherwise known as the "I have to get oodles of money, so I can stop renting and build my own house, so I don't go insane" plan. Thankfully, it's quite simple, and only has a few main points...

1. Open Another Savings Account
   
   This is an absolute necessity. I need another savings account, plain and simple. Any money that I put aside for building a house will go into this savings account. This money will not be touched for any reason. Well, except maybe for extreme dire emergencies, such as...something - I don't really know. But something really bad, like building an emergency fallout shelter.
   
2. Contribute 10% of Income
   
   I've also made a promise to myself that I will contribute at least 10% of my income to my house building savings account. At times, I'll probably contribute more, but 10% is a good starting point. This money will be automatically transfered every time I get paid by a client.
   
   
3. Set Aside Half of My Tax Return Money
   If and when I get any money from a tax return, half of that money will also be going into my designated savings account. This most likely won't be a lot of money, but it's still money.
   
   
4. Piggy Bank It
   Don't laugh! Yes, I have a piggy bank! It's on my bookshelf, and it's a catchall for any spare change and bills that I find laying around - which seems to be a lot for some reason. Sometimes I think it rains pennies and dimes in here. Anyway, once a month or so, I'll be depositing my piggy bank money into my big person piggy bank at the big person bank.
   
   
5. Save By Serial Numbers
   
   Here's an old trick that I learned when I was a bartender. Every dollar bill has a serial number, and every serial number has a letter, usually at the beginning and end. I've picked the letters J and K, which are my children's initials, and I'm going to save every bill I get with either of those letters in the serial number. I will also be saving any bill with a star, or asterisk, in the serial number. It may sound odd, but it works. The money adds up quickly!

Well, there you have it. That's my plan for saving for a house. It may not be the best plan, but at least I have one!

Five years from now, by my 35th birthday, I expect to have well over $10,000, which will be enough to get the ball rolling. Actually, I'll probably have enough money before then, but I'm a pretty big pessimist most of the time, so I'm sticking with $10,000...

I'm also adding a goal thermometer widget, like so:



It's at zero now, but I still have to open my new Big Person Account and take a look at my funds. I'll then update the moneymeter at least once a month.

Okay, to work I go!

Easy Fundraising Ideas





Update Fundraiser Thermometer Here