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Tax sales on homes rarely make it to the courthouse because the taxes owed are rarely more than the house is worth.
What you have to remember when buying foreclosures is that "someone" is saying the house is worth $250K in the above example and the owner owes $150K. Common sense would tell you that the owner would sell the house for $200K if those numbers were accurate and walk out with a clean credit report and $50K in cash.
The bigger possibility is that the house is NOT worth $250K and probably isn't even worth $150K. Again, if it was worth $150K at least the homeowner could sell it and walk away with clear credit.
So....more than likely you're paying $150K for a house that isn't worth that much. What flippers have done in the past is buy that $150K house, put relatively inexpensive $25K worth of improvements into it by buying things in bulk, getting deals with contractors, etc., then sell it for $200K. But flippers these days are hurting in the RE market too.
Personally I don't touch houses. If a house is in foreclosure you can bet the people living there are going to strip that sucker of anything valuable. I like land ;)
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