If you’re getting into real estate investing, buying tax delinquent properties is the best place to start. If you’re smart about it, you can start with less money in the bank than your typical monthly fast food bill. That is how.

1. Don’t go to the tax sale, but pay attention to what’s going on there. You will not buy tax delinquent properties at the tax sale. It’s a myth that you just go and pay the amount of taxes owed and get a deed. Many bidders will offer good properties up to near retail value. But that doesn’t mean the tax sale is worthless.
Check what the auction results were – this will tell you right away which properties are junk. (The ones that didn’t receive offers are worth nothing.)

2. Wait until approximately 2 months before the end of the redemption period and check again. Many owners will have redeemed their properties. Those who haven’t probably won’t be able to. These owners/properties are the ones you want to focus on now. Bonus: Your competition is no longer buying delinquent properties right now. There is very little competition this late in the game.

3. Approach these owners and find out what their plans are. You will find many absentee homeowners and homeowners who have moved out and decided to let the government take the property. Others are heirs who never wanted the property in the first place. These are the owners who will sell you for next to nothing.

4. Offer to take the property off their heads. Ask them, since they are already planning to leave the property, if they would mind signing the deed for you so you can see if you can do something with it. Offer them $100-200 for their time in signing the deed. At this point, some will be happy to let it go. Others may want a deal: you can offer to split any future winnings with them (or give them a percentage).

5. Pay taxes or trade for an immediate profit. Since you have so little money invested in the property, a profit is guaranteed. The property received offers in the tax sale; there will be demand for it. If you don’t have the money to pay the taxes, you may be able to find another investor who wants the property and you can still sell below market value and walk away with $5,000-10,000 or more in cash.

This is the only foolproof method to buy tax delinquent properties on a shoestring budget.