Are you looking to acquire some property for pennies on the dollar? You probably won't score your dream house, but you can definitely find some great deals that can quickly be flipped by attending tax deed sales.

A tax deed sale is simply where the county forecloses on the property owner for non payment of real estate taxes. The process for administering tax deed sales varies widely by state and even by county. In Ohio for example, tax deed sales are done as Sheriff Sales, which is the exact same department that does the mortgage foreclosures. In Arkansas, there is a state office called the Commissioner of State Lands that handles all tax deed sales. In other states, tax deeds sales are at the county level with either the Treasurer, the Circuit Clerk or the Auditor handling the sale. As you might imagine, it is very important to understand your local regulations.

The tax deed bidding process is determined by local regulations: some jurisdictions require the minimum bid at the auction to be the appraised value or a fraction of the appraised vale of the property. Other jurisdictions use the taxes owed as the minimum bid.

Here's where it really gets interesting. If the property does not sell at the initial sale, some jurisdictions allow for the state or county to sell the property with no minimum bid no matter what is owed. For example, in Arkansas, I have bought property from the Commissioner of State Lands for as little as $25. Read that again. It is not a misprint. Not $2500, not $250, but $25! I sold the property a month later for several hundred dollars. Does that kind of deal happen every day? Of course not! But it does happen.

So, how do you find these kinds of deals. If you don't know the regulation in your state, call your county money person, whether its called the Treasurer or Tax Collector and ask what the procedure is for delinquent taxes. They should be able to tell you when the next tax sale is. Then call the appropriate department and find out what the procedure is for the properties that do not sell at the initial auction. Are they sold at another auction? Are they at a list somewhere that you can buy straight off of? Be persistent and you will soon find the pot of gold.