Advertisement

Speculators grab more than 300 tax-auction parcels

June 07, 2011|By ANDREW SCHOTZ | andrews@herald-mail.com
  • Samy Gupta of Gambrills, Md., holds up his number card during the annual sale of properties that have unpaid taxes. The sale was held Tuesday behind the county treasurer's office building on West Washington Street.
By Ric Dugan, Staff Photographer

Speculators bid hundreds of thousands of dollars at an auction Tuesday, hoping to scoop up tax-delinquent properties at bargain prices.

About 40 people were at Washington County's annual tax auction in the parking lot behind the county office building at 35 W. Washington St., but only a handful did most of the buying.

Whether they get to keep what they bid on, though, won't be known for a while. Owners of properties sold at the auction can reclaim them by paying off the debts. About 95 percent to 98 percent reclaim their parcels, Washington County Treasurer Todd L. Hershey has said.

There were 351 delinquent properties on this year's list as of auction time; 313 of them, or 89 percent, were sold during the auction.

The total of the tax debt on those properties was about $1.2 million. On some Hagerstown properties, the debt amount also includes abatement costs, when the city fixes code violations and charges the owner.

Buyers actually bid about $6.3 million total on the properties on Tuesday. However, only the $1.2 million in minimum bids had to be paid; the rest will be collected if the buyers foreclose on the properties and keep them.

On a sunny day, the sale appeared to run smoothly, other than a woman who nearly backed a minivan into a couple of bidders sitting in lawn chairs in the parking lot.

Auctioneer Robert Mullendore read aloud each parcel number and the minimum bid for purchase.

Parcels assessed for a few hundred thousand dollars were snapped up for a fraction of that.

But buyers won't take possession of those properties unless they foreclose and a judge signs an order.

Samy Gupta of Gambrills, Md., paid about $47,000 for 35 properties.

He said he's been going to county tax sales for about 20 years, including 15 in Washington County.

His goal is to buy a property that won't be redeemed, making all of the time and money worth it.

In Washington County, he's been able to buy and keep properties twice, he said. One is a house on Gay Street and another is a house on Alexander Street.

"I do need to sell them because it ties up your money," he said.

Jim Truitt of Terrapin Certificates LLC of Lutherville, Md., bought the most properties — 137, for a total of about $462,000.

John Kohn of Harford County, Md., was next, with 77 properties for about $133,000.

Kohn said he was representing a buyer, which is listed on the final auction summary as Brook-Lyn Corp. LLC.

The resident agent of Brook-Lyn Corp. LLC is Bruce Miller of Timonium, Md., state Department of Assessments and Taxation records show.

Dave Younker, who lives near Funkstown and Boonsboro, purchased nine properties for a little less than $10,000.

He didn't register in time for last year's sale, so he watched and learned. This year, he was ready to buy.

Even if purchases don't hold up, it's still a good investment because the original owner has to pay 6 percent interest to the buyer.

"You're really not getting any return on your money anywhere else," Younker said.

Last year, Washington County's tax sale included 190 properties; 176 drew bids.

Bidders shied away from smaller parcels. Kohn said they're usually not worth much.

"You better do your due diligence when you come to these things," he said.

At the other extreme, no one bid on the most valuable property on the list — in the Cortland Park development near Leitersburg Pike and Eastern Boulevard.

It was assessed at $15.9 million. The minimum bid was $162,870.51.

"Don't hold your hands too high," Mullendore joked when it was clear no one was interested.

The most symbolic property that was sold Thursday for unpaid taxes was 3 Public Square — the home of the local state Department of Assessments and Taxation office. A limited liability company based in Silver Spring, Md., owns the building.

Advertisement
The Herald-Mail Articles
|
|
|