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An Oceanfront Florida Condo… for $4,600 By Dr. Steve Sjuggerud Saturday, April 24, 2010 "Steve, I just found an oceanfront condo… for $4,600!" I could hear the excitement in my friend's voice on the phone yesterday… He lives in Palm Beach County, Florida – ground zero of the real estate bust.  And he's been following up on my recommendation to  buy properties being sold on the county courthouse steps. He's done his homework, and now he's looking forward to picking up something cheap. He has his eye on this oceanfront condo… For whatever reason, the owners of this oceanfront condo haven't paid their taxes.  The county government doesn't mess around… It needs those tax dollars – now!  Unless the condo owners come up with $4,600 soon, their condo will be sold.  The starting bid will be a lowly $4,600 – the amount of the back taxes due,  plus penalties. The county really doesn't care what the condo sells for above $4,600.  Whether the condo sells for $5,000 or $50,000 or more, the county's take is the  same – $4,600. So it does a poor job of marketing these sales. In other words, most people aren't aware of these sales. And even if they are,  they're not willing to do the relatively small amount of homework to know what  to bid. You can get some incredible deals. Even so, my friend's chances for getting that condo for $4,600 are pretty darn low… The likely outcome is the owners will find a way to pay their taxes. I've been to  many tax deed sales. On multiple occasions, people have paid their back taxes –  just before the auction was scheduled to start! Even if the owners don't pay their taxes, other bidders at the auction will likely  bid the condo up to 50% of its most recent "assessed" value – which would still be  a good price, but higher than $4,600. Here's what the smartest guy I know in the business – Brad Thomason,  who manages a multimillion-dollar portfolio of tax certificates –  told me about my friend's deal: Steve, your friend's chances are slim – but they are not zero.   For example, we ended up with a beach condo in Myrtle Beach,  South Carolina through tax sales. We're probably in for about 25 to 30 cents  on the dollar of what it's worth. You might have a 99% chance of not getting the property, either because the  property owner pays their taxes or someone outbids you. But think of it this way:  your friend has a 100% chance of not getting the property if he doesn't show up  to the auction. In Florida, there are two ways to profit by "paying" your neighbors' taxes: tax  deeds and tax certificates. Buying a "tax deed" is what my friend is looking to do. It's essentially buying a  property. Buying a "tax certificate" is a way to earn high income – 18% in Florida –  by paying someone's late property taxes on their behalf. You then get your  18% interest when either 1) the owner pays their property taxes late, or 2)  the property is sold on the courthouse steps in a tax deed sale. Right now, both are great ideas… You can get safe, high income  (in tax certificates) or a property for a very low price. There are a couple things to watch out for, but it's generally pretty simple –  a great reward for a low risk. You might not get an oceanfront condo for  $4,600 like my friend was hoping… but you can do extremely well in your  local area. Sales for tax deeds are a year-round thing. But sales of tax certificates are  typically once a year, after tax time. As soon as people are clearly late on  their property taxes, sales begin. The "high season" is right around the corner… Get yourself educated, like my  friend has been doing, and then get in the game! Good investing, Steve P.S. For more than a year, I've been looking into the opportunity in tax  certificates (super-safe double-digit income) and tax deeds  (which can offer astronomical upside). Right now, the supply is way higher  than normal, which puts buyers like us in a great spot. I wrote up a super-simple  guide on how to get started for my True Wealth readers. If you'd like to learn more,  click here. Further Reading: Back in 2006, Tom Dyson did some of the best Florida real estate bust research you could find anywhere. How? He went down to Miami and posed as a potential condo buyer. You can read Tom's classic "boots on the ground" research here: Biscayne Boulevard: The Next Fifth Avenue. Another great income opportunity right now is in cheap natural gas. Steve recently wrote about this idea in his True Wealth newsletter. DailyWealth contributor Matt Badiali is doing a great job covering this situation… you can read his recent piece here: The Last Cheap Commodity Left.