California counties raise money by imposing a tax on real estate property. In Los Angeles County, when a residential property owner fails to pay property taxes for 5 years (or a commercial property owner for 3 years), the Los Angeles County Treasurer and Tax Collector files a tax lien and conducts a public tax lien property sale of the real estate to recover those unpaid property taxes. Individuals interested in searching out cheap properties for sale can use Los Angeles tax sales to bid on and buy land for as little as the amount of the unpaid tax plus the costs of the tax-lien sale. Bidders should follow the instructions of the Los Angeles County Treasurer and Tax Collector to find tax-lien properties in LA County, register for the tax sale and bid on tax-lien properties.
Step 1:
Obtain a copy of the Los Angeles County “Auction Book.” This book contains the list of properties subject to a property-tax lien and scheduled to be sold at upcoming Los Angeles tax sales. You have several options to buy this book or view it for free in certain places:
a. You can order online by credit card at the County Treasurer and Tax Collector’s office (see Sources). Regardless of how you purchase the “Auction Book,” the main price is $28. You must also pay $2.73 if you are a California resident and from $4.95 to $12.95 for postage to have it sent to you in the mail.
b. You can also order by mail or telephone. When ordering by mail, you may pay by a money order or cashier’s check, made payable to the Los Angeles County Tax Collector. Use the following contact info:
Los Angeles County Tax Collector
225 North Hill Street
Room 114
Los Angeles, CA 90012
213) 974-2646 or (213) 974-2647
c. You may also visit the first floor lobby area at the address above to purchase the book. Use this option if you want to pay in cash.
Step 2:
Use the listings in the auction book to find properties for sale at the next Los Angeles County tax sale. Some but not all properties have a street address. Many properties up for sale due to tax lien are unimproved land with nothing but a legal property description. You would have to search the county property records if you want to determine the exact property lines for such properties.
Step 3:
Prepare cash or certified funds for registration and for the actual auction. Cashier’s checks or money orders are to be made out to the Los Angeles County Tax Collector. You will need to pay $5000 to register and pay a down payment immediately upon winning a tax auction. Have at least $5000 prepared for a down payment or payment in full if the sale price is less than $5000 (your registration fee can handle this amount, though). If 10% of the sale price is more than $5000, you must pay that higher amount. In the event that you do not complete the sale in 30 days, you will forfeit your down payment.
Step 4:
Open the “General Information” page on Los Angeles tax sales (see Sources). Look for the next available tax sale date and registration deadline. Go to the address above to register for the tax sale. Use the “Bidder Registration Form” to register (see Sources).
Step 5:
Show up at the auction and bid to buy your properties. Naturally, it is quite possible to get some very cheap deals with these tax sales. However, you need some idea about the value of the property before you place a bid at the public auction. Do your research and visit the properties to assess which ones you think will give you the most value.
Sources:
Instructions for Purchasing the Auction Book for Los Angeles Tax Sales
General Information and Registration Instructions for Los Angeles County Tax Sales
Los Angeles Tax Sale Bidder Registration Form
