ANDERSON — Investors snapped up hundreds of properties at Madison County's annual tax sale on Tuesday.
The goal of the day-long event was to try and collect more than $9.3 million in delinquent property taxes owed by county residents.
Final results of the sale won't be available until today, but the numbers will likely fall far short of that optimum goal. Those investors who bought property on Wednesday have until noon today to pay the amount they bid for properties.
William "Billy" Richards Jr. is an Indianapolis-based real estate manager and broker who attends tax sales throughout Indiana.
He's affiliated with a law firm that buys properties for clients and also sponsors an annual seminar that teaches lawyers and real estate professionals how to navigate the world of property at tax sales.
The No. 1 thing most people don't realize, he said, is that tax sales are court-ordered events because a property owner is delinquent on paying their taxes. That makes tax sale buyers "a party of interest in a lawsuit."
Tax sales are essentially an auction where potential buyers bid against one another. The initial bid price is the delinquent taxes owed on a property. If several potential buyers are interested in a parcel, however, the price can quickly soar past the back taxes that are owed.
KFC of Madison County LLC, for example, owns two properties on Scatterfield Road that were on the tax sale list.
The company owes just over $41,000 in back taxes on a parcel at 6620 S. Scatterfield Road near the Meijer store, and nearly $22,000 on another property at 1704 S. Scatterfield Road, according to county records.
The final bid price on the property near Meijer came to $360,000; the final bid for the other parcel was $104,000. As of mid-afternoon Wednesday, those were the highest prices paid for any property on the tax sale list.
According to Richards, people who buy property at tax sales generally fall into two categories: real estate investors interested in earning interest income from the property of 10 percent or more if the taxes are paid, or redeemed, within one year or people who actually want to own the property.
Ken Kocinski falls into the latter group.
He identified 125 properties to bid on Wednesday, and said he'd be satisfied successfully bidding on 25 of those and eventually taking possession of 10 to 12 after the year-long redemption period expires.
While investigating properties he'd like to buy, Kocinski said he talked with at least a half-dozen homeowners who didn't know their properties were on the tax sale list. One homeowner took the necessary steps to pay their taxes after he met with them, Kocinski said.
Kocinski, who owns many rental properties in Madison County and serves on the county Property Tax Assessment Board of Appeals, said that's one of the things that distinguishes investors like him and professionals who travel the tax sale circuit representing out-of-town buyers.
"We're not in it just to take their property," Kocinski.
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