Introduction to Indiana Tax Sales
As the last quarter of the year rolls around, many states, including Indiana, are gearing up for their tax sales.
Indiana holds both tax lien and deed sales, auctioning off properties during multiple rounds.
These auctions impose various redemption periods and determine whether the investor receives a lien or deed.
Fortunately, Tax Sale Resources has gathered data on Indiana tax sales for years, helping investors navigate the complex market. In addition, we keep tabs on regulatory changes that affect factors such as the interest on premium bids.
Read on to gain the tools to scale your investment model with Indiana tax sales, an analysis of how state statutes affect investment costs, and insights on adapting to future changes.
The Indiana Tax Sale Process
The state holds two lien sales during the year: first, the standard sale, which allows lien investors to purchase properties with a one-year redemption period, followed by a proposal process.
Then, counties take the liens that don’t sell the first time and hold a commissioner’s sale. This second sale has a 120-day redemption process, meaning investors can acquire the title much sooner than with liens from the first sale.
In addition, Indiana tax lien sales have a premium bid process, meaning the winning bidder doesn’t receive the same interest rate on bid overages. Specifically, investors earn 10% on the lien amount and 5% on any amount they bid over the lien.
Remember, the interest on premium bids is subject to change, as the last several years have proven when state statutes lowered the premium rate.
That being said, the premium interest rate still makes excess bids profitable. So, investors at Indiana auctions often bid over the premium because they’ll receive a modest return on the topmost portion of the bid.
While Indiana offers four-month redemption periods on secondary sales and interest rates on your entire bid, there are pitfalls to navigate during the state’s tax lien sales.
For instance, investors must complete a legal process to obtain an insurable title. The full quiet title process can be lengthy and expensive, especially if you aren’t well-versed in state laws and don’t partner with a skilled attorney.
In addition, Indiana tax liens follow the trend of the tax lien states across the country: most liens redeem, preventing an opportunity for transferring ownership. As a result, investors whose model is to become the property owner must do their homework and make calculated moves.
Buying tax liens en masse isn’t a guarantee that you’ll own any of them within a year.
Profile of Tax Deed Sales in Indiana
The tax deed sales in Indiana result from tax liens that don’t sell in the first two auctions.
In other words, the tax deed sale process handles the leftovers that investors passed over during the previous sales. These liens are typically lower quality (which is why investors passed on them during the previous auctions).
For instance, the property might be a pile of rubble or a sidewalk with a mailbox. In addition, they likely require the same insurable title process as other deeds, incurring more time and cost. Therefore, tax deeds in Indiana are usually for properties riddled with issues that cause investors to avoid them in favor of properties with less risk.
That being said, tax deed sales in Indiana are a way to snap up real estate with little competition. The key is to conduct due diligence before committing money to a specific property. By equipping yourself with the pertinent information, you can distinguish between a diamond in the rough and a property with little investment value.
As a result, you’ll need a specialized investment model to profit off these non-ideal properties. For example, if you buy fixer-uppers and perform repairs yourself, Indiana tax deeds can be profitable. However, doing so requires a thorough understanding of the real estate market and diligence to vet each property before attending the auction.
Researching Indiana Tax Sales the Easy Way
Savvy investing takes research.
While you can try hounding county assessors for information and waiting for days or weeks to get data on upcoming auctions, Tax Sale Resources provides a streamlined, accessible database for tax liens and deeds nationwide.
For instance, you can narrow down your parcel search by property type, opening bid, land size, and more. This way, you can track down the tax liens and tax deeds that fit your investment model within seconds and begin strategizing about which auctions to hit.
Instead of you sifting through thousands of listings, Tax Sale Resources does the legwork and brings you available tax liens and tax deeds according to your preferences.
In addition, you can go a step deeper with our Market Analysis Report.
This report tracks past sales in every county by property type. This way, you can gauge the premium bid at the next auction and shape your investment approach accordingly.
As a result, this tool empowers you to gather the information you need to maximize your investments.
Financing your Indiana Tax Sale Investing
Tax Sale Resources also offers financing to fuel investments and help you scale quickly.
Specifically, you can tap the equity of the deeds you acquire to fund repairs or your bids at the next auction. Furthermore, we don't require investors to have the insurable title in hand to receive funding.
So, if you've built a winning model but are progressing slowly because of how cash-intensive Indiana tax deeds can be, our financing program offers a streamlined solution.
Real Life Indiana Tax Deed Sale Success Stories
Tax Sale Resources has seen investors with the right approach and sufficient funding succeed in the Indiana tax deed market.
For example, we’re currently providing capital to an investor who purchases single-family and multi-family homes that need serious repairs and turns them into rentals.
Plus, he recently acquired a commercial property in Indiana, stimulating the local economy and creating another avenue for success.
Financing from Tax Sale Resources has allowed him to move at an accelerated pace and make the most of the present market opportunities.
Indiana Tax Sale Insights for the Future
As real estate and economic trends are always in flux, keeping your ear to the ground is vital as you move forward with tax sale investments.
For instance, the interest rate hikes in the last year have led to conversations in Indiana about raising the premium interest rate. The premium rate used to hover around 10%. However, the current rate of 5% means investors could earn more simply by depositing their money in a high-yield savings account. While a combined rate of 10% on the lien amount and 5% on the premium is still profitable, the rate doesn’t fit the present economy.
As a result, investors in Indiana are pushing for a rate of 10%-12% on the premium bid to make the overages worthwhile. In addition, these overages may be profitable for the previous owner, thanks to the ruling on Tyler v. Hennepin County.
Remember, states and counties have only just begun implementing processes to reflect the Supreme Court ruling, and it’s crucial to consult with an attorney to ensure compliance with state law.
However, given the ruling, owners may have the chance to collect the premium bid.
Key Legal Considerations for Investing in Indiana Tax Sales
Remember, Tax Sale Resources is not a team of lawyers. Fortunately, we have several takeaways from our interview with Billy Richards on Indiana tax sales.
Firstly, all properties are sold “as-is,” and the winning bidder receives a tax certificate from the county. Therefore, the winning bidder is liable for fees for county-provided services to the property, such as demolition, mowing, or trash removal.
In addition, interested parties in the property are legally entitled to a post-sale notice.
Regulations vary by county regarding whether this notice is the bidder’s or municipality’s responsibility. Because the responsible party must send this notice within six months of the sale, it’s crucial to know the rules of the specific county. It’s also advisable to file Form 137-B with the county for reimbursement for specific expenses such as attorney fees. Recoverable costs vary by county, so it’s best to contact your local office for specifics.
Furthermore, Indiana statutes allow anyone to redeem the property sold at a tax sale.
As a result, parties beyond the past owners can jump in at any point during the one-year redemption period and pay the taxes, assessments, and interest.
Lastly, if the property doesn’t redeem, the investor has three months to file for the tax deed. However, because Indiana doesn’t require an additional sale for the tax deed, filing for the deed is not a foreclosure process.
Indiana Tax Sale - Frequently Asked Questions
Where do I find the delinquent property list in Indiana?
Investors can research delinquent properties with the Tax Sale Resources database of tax liens and tax deeds. The Research tool allows you to access thorough information within seconds, while direct communications with the county may take days or weeks and result in incomplete information.
What liens survive a tax sale in Indiana?
Tax liens survive tax sales in Indiana because of the issues investors sense with the property. Indiana has two tax lien sales per year, putting liens that didn’t sell the first time into a second offering for investors. Tax liens that survive these two sales and go to the deed sale generally have inhibitors to quick profitability, requiring a sophisticated investment approach to be lucrative.
What is the Indiana tax sale surplus?
Any amount bid over the tax lien price creates a tax sale surplus in Indiana. Investors earn a premium rate on the surplus, which can differ from the lien rate. The surplus rate, currently 5%, is subject to change with state legislation.
How long after a tax deed sale in Indiana can the new owner resell?
The new owner can resell the property from a tax deed sale once the 120-day redemption period expires and they complete the quiet title process.
How long after a tax lien sale in Indiana can the property be resold by the new owner?
The timeline for selling a property from a tax lien sale in Indiana depends on the auction in which the investor acquired it. Specifically, liens sold in the first auction have a one-year redemption period. On the other hand, liens sold in the second auction have a 120-day redemption period.
What’s the process of taking possession of tax sale property in Indiana? And when can you occupy the property?
Taking possession of tax sale property in Indiana means waiting for the redemption period to expire. After the redemption period, you can implement the quiet title process to become the property owner. Depending on the property, this process can take one month to over a year.
Who can redeem a property sold at tax sale in Indiana?
Indiana state law allows anyone to redeem a property sold at a tax sale in the state.
What are the Indiana tax sale rules?
Indiana holds two successive tax lien sales, where investors will obtain properties as is. Then, counties hold tax deed sales for unsold liens. In addition, investors who bid over the lien sale price earn a premium rate on the overage. Tax liens sold during the first sale have a year-long redemption period, while properties sold in secondary and tertiary sales have a 120-day redemption period. Lastly, anyone can redeem tax liens in Indiana.
Indiana tax sales provide fruitful investment opportunities for prepared investors.
You’ll earn interest on the tax lien price and the premium bid, and you can become the new owner after the redemption period expires. Remember, the redemption period depends on the auction during which the property sells, and acquiring properties after the first auction shortens the redemption period by eight months.
Investors looking for research tools and financing for tax sales in Indiana can find help with Tax Sale Resources. Our tool eliminates the need to depend on counties for essential information, and we provide financing based on property value without requiring the insurable title.
Therefore, Investors looking to jumpstart their investments and scale a successful model in Indiana can partner with us for actionable information and quick funding.