If you're thinking about getting into tax sale investing in Pennsylvania, you're about to discover some insider secrets that could save you hundreds of thousands of dollars.
How Does A Tax Sale Work In Pennsylvania?
After more than three decades in this business, I've seen countless investors make devastating mistakes that could have been easily avoided.
Let me share something crucial that most “gurus” won't tell you: tax sales can be incredibly profitable, but only if you know what to avoid.
And there's one golden rule that's more important than any other – never, ever buy commercial properties at tax sales.
Let me tell you why this matters so much.
There's a famous case in Norristown that perfectly illustrates this point.
Some investors thought they'd found a bargain when they bought a paint factory at a tax sale.
Next, the EPA showed up with some devastating news: there were open barrels of chemicals that needed professional removal.
The cleanup bill was over $450,000.
Even worse, they couldn't back out of the sale.
This is the kind of nightmare scenario that can destroy your financial future in an instant.
But commercial properties aren't the only danger.
Farm properties might look peaceful and profitable, but they're hiding some serious risks.
Think about it – where do farmers fix their machinery?
That spot is often contaminated with hydraulic fluid, gasoline, oil, and diesel fuel that's seeped into the ground over decades.
And if you're looking at an orchard, things get even worse.
Years of pesticide use can leave heavy metals in the soil that never break down.
The EPA might require you to remove and treat the first two feet of topsoil – a cost that could run into hundreds of thousands of dollars.
So what should you be buying?
The answer is simple: residential properties.
But even then, you need to understand how Pennsylvania tax sales work.
Pennsylvania has two different types of tax sales.
The first happens in September – these are called upset price sales.
But here's the catch – these properties come with all their existing liens.
That means you could be inheriting a mountain of debt along with your “bargain” property.
For properties that don't sell at these upset sales, counties typically hold a judicial sale later in the year, usually in the spring.
These judicial sales offer properties free and clear of mortgages and other liens.
Here's a valuable tip: if you spot a property you like at the upset price sale but it's not free and clear, you can wait for it to come up in the judicial sale.
The timing for judicial sales isn't set by statute, so just contact the Tax Claim Bureau and ask when they're planning their next one.
They'll usually tell you it's around May or June, and you can track it from there.
But there's another way to profit from tax sales that most people never even consider – it's called the overages business.
This is actually my favorite strategy in today's market.
Instead of buying properties and dealing with all the headaches of ownership, you can profit from the money left over after a tax sale.
Think about it this way: when a property sells for more than the taxes owed, that extra money becomes an overage.
Most former property owners don't even know this money exists. That's where you come in.
You can help these people recover their money while earning a healthy profit yourself.
No dealing with environmental issues, no repair costs, no tenant problems – just pure profit potential.
I discovered this opportunity back in 2005, and I wish I'd known about it when I started in 1989.
It's especially perfect for beginners because you can learn the business without risking your life savings.
But here's the most important thing I can tell you about tax sale investing: don't try to figure it all out alone.
This isn't a business where you can afford to learn from your mistakes.
Those mistakes can cost you hundreds of thousands of dollars, and that money isn't refundable once you've committed it.
The most successful investors in this business aren't necessarily the ones with the biggest budgets—they're the ones who take the time to learn from experienced mentors before placing their first bid.
They understand that in tax sale investing, what you don't know can absolutely destroy your financial future.
Remember, whether you're interested in buying properties or pursuing overages, education isn't just helpful – it's essential for survival in this business.
Take the time to learn the rules of the game, and you could build a highly profitable business helping others while creating wealth for yourself.
The opportunity is there. The question is: are you willing to learn how to seize it safely and profitably?
