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At first glance, the house looks like an abandoned wreck. Its windows and doors have been nailed over with plywood, and someone has spray-painted “MR S,E,” where the front door should be. The ornamental iron gate opening onto the sidewalk hangs askew, and the surrounding fence has disappeared. Gray dust covers the yard.

However, closer inspection reveals that the wraparound porch is in good shape, as are the turned posts along its outer edge. The yellow shingles covering the main floor still fit together snugly. Tracey, my girlfriend, inspects the brickwork of the foundation and declares it sound.

“How much for this one?” she asks.

I consult my stack of papers: “$1,542.94.”

Tracey selects this Queen Anne– style home, on Maple View Place SE, as her favorite. I’m partial to a red-brick Victorian on High Street SE that lists for $1,539.46. Our third choice, on nearby V Street SE, features a mishmash of architectural styles. Ugly but huge, it looks like a Mississippi River barge made of brown brick that somehow washed ashore in Anacostia. And it could be ours for $1,862.17.

Even with today’s bloated real-estate prices, such outlandish bargains really exist—in theory. All three houses, and 3,840 other properties, are listed for auction at this year’s D.C. Real Property Tax Sale. There, buyers bid for the privilege of paying someone else’s delinquent real-estate taxes. Doing so gives you a lien on the property, which can be the first step in obtaining a deed.

The road from lien to deed is long, complicated, and subject to legal and financial obstacles—but we’re desperate. Tracey and I spent all spring house-shopping, only to find that we couldn’t afford anything that wouldn’t endanger our health, safety, or sanity. Even Anacostia, for many years an oasis of cheap real estate, has been sucked dry of bargains.

The next day I pass through security at the North Capitol Street quadrant offices of the D.C. Office of Tax and Revenue and take the elevator to Room 4150, a large, gray space shaped like a T, with a small raised stage in the middle of the crossbar. Onstage and behind a podium stands the auctioneer, Nancy Pilkerton, who will go most of the morning without cracking a smile.

I’ve come on the auction’s opening day—July 11, a Monday. Our houses won’t be on the block until closing day, Friday, but I want to size up my competition.

“Square 0331, lot 0007, tax $1252.05,” Pilkerton says into her microphone. The audience of buyers, about 160 of them, have copies of the sale list, which appeared in the Washington Post and the Washington Times and on the tax office’s Web site. The list locates this property on 11th Street NW.

Several buyers raise their numbered cards. “Several bids on the floor,” declares Pilkerton. Starting at zero, she runs up the numbers—in increments of 10 until $100, of 100 until $1,000, and then of 1,000.

“Nine thousand to Buyer 308,” she declares, meaning Buyer 308 will pay $10,252.05 total. Had she needed to, Pilkerton would have continued to increments of 10,000, then 100,000.

The speed of the event intimidates me. Pilkerton doesn’t do that “going once, going twice” stuff; extra words would only slow her down. If I lose my place on the list, several properties will be auctioned in the time it takes me to find it again. To complicate things, if an owner has paid the tax bill since the list was drawn up, the auctioneer skips the property. So I have to work just to keep up with the action. I get infrequent breaks when Pilkerton wets her throat from the biggest Big Gulp cup I’ve ever seen.

The buyers are a diverse bunch—T-shirts and button-downs; corn rows and mullets; black, white, and every shade in between. A few more men than women. Most buyers look middle-class, and no one wears a tie. However, here and there I see an older guy with an ocher-hued tan, the kind you get from playing lots and lots of golf. There’s also a cadre of younger guys with laptops, some open to spreadsheets.

I suspect that not one of these men has come, like me, to get a home for himself, his girlfriend, and his cat. They’ve come to make money, either by obtaining properties for resale or by collecting interest on owed taxes.

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When you win a bid and pay someone else’s real-estate tax, the debt passes from D.C. to you. If the deadbeat owner pays up—and most do—you’re entitled to the same interest and penalties D.C. would have received: 18 percent per year. True, you don’t get interest on the surplus you pay over the amount of the tax. But, buying someone else’s overdue tax bill can return more than most mutual funds or stocks.

Buyer 117, a man of about 50 with a very precise haircut, keeps winning bids with five-digit figures: $25,000; $15,000; $20,000. But Buyer 365 does him one better, dropping more than $370,000 over the course of an hour. When he wins a bid with $300,000, a whisper rustles through crowd. I turn to get a look—Buyer 365 is just a skinny, baby-faced 20-something in a polo shirt.

I catch up with him during a break. His name is Ben Jones, though he declines to identify the company he’s bidding for. “We’ll probably flip the properties we get today,” he says.

Most winning bids this morning fall between $6,000 and $10,000. That’s more than I’m able to risk right now, so I need an edge. Two days later, I’m on the phone with Bill Carey, co-author (with his wife, Chantal Howell Carey) of Make Money in Real Estate Tax Liens, a book all about property-tax sales. He coaches me on tax sales.

“If you want to own the property, go after one that someone is not living in,” says Carey. Anyone can beg, borrow, or steal a couple of thousand to avoid being evicted, he says, but owners won’t fight as hard for an empty property they’re holding as an investment. Fortunately, Tracey already refused to let me include any occupied houses on our list.

“Your first bid should be on a property you’re not emotionally attached to,” says Carey. “Bid and lose, get a sense of how the adrenaline feels. It gets exciting, but don’t go over your maximum bid.”

I’m at the auction before it opens Friday morning. My deposit is $1,000, meaning I have up to $5,000 (tax plus bid) to work with. By my calculations, this puts me in the game. Monday’s higher bids were mostly for properties in ritzy Northwest. Most of today’s lots are in not-yet-ritzy Southeast. If the owner pays his tax bill within a year, I get my money back, plus interest on the tax. If not, I’m on my way to buying a house cheap.

At 8:30 a.m., Pilkerton starts burning through the list faster than ever. Several properties in a row get no bids at all, which I take as another good sign. The thought that I might pull this off gets my adrenaline pumping—exactly what Carey warned against.

The 10 a.m. break arrives just before the first of my properties comes up. While most people stretch their legs, I finally meet another buyer who, like me, hopes to get a home to live in.

Inga Hill got here much as I did—though her house-hunting frustration lasted three years, not three months. “I’d find a house, but then an investor would come along,” she says. “I’d get a call from the owner asking ‘Can you beat a cash bid?’”

Hill’s house needs are modest; her daughter is already off at college. She’s found what she thinks is the perfect place on Alabama Avenue SE, with $1,482 taxes due. We wish each other luck as the bidding resumes.

I’ve decided that the big, ugly place on V Street will be my practice bid; the High Street Victorian and the Queen Anne on Maple View Place are what I’m really after. It happens fast—I raise my number, then pull it down before Pilkerton hits $1,000. I don’t want to get stuck with this dog.

I needn’t have worried—the V Street house goes for $13,000. Uh-oh.

Pilkerton is quickly approaching my High Street property. Closer, closer—and suddenly, she’s past it. The owner must have paid the tax. Damn!

That leaves Tracey’s favorite. Hill gives me an encouraging smile. Pilkerton calls the square and lot. For several moments I’m in the game for real, holding my number high. I understand Carey’s warning—this feels great. I don’t want to drop out.

But Pilkerton pushes the numbers skyward, leaving me behind. $10,000; $20,000…$50,000. I try to remember if any other property has gone so high today. Finally, Buyer 148, whoever that is, gets it for $100,000.

Just before noon, the last property of this year’s sale goes to Buyer 6 for $7,000. “That concludes the sale,” says Pilkerton. “We thank you for participating.” The remaining crowd gives her a round of applause.

As the buyers shuffle out, I see 117 with his Wall Street haircut, his button-down shirt, and his truckload of newly purchased tax liens. For a moment, I seethe. I wish he’d go back to day-trading dot-com stocks or, better yet, on to next week’s hustle: hydrogen futures, IPOs for nano-crap companies, venture capital for startups that make Klingon stem cells—whatever. Just leave us somewhere to live, please.

Later, I chat with Hill again. Her Alabama Avenue house went to another buyer for $17,000. But she’s thinking about her own game, not the other players’. “I should have picked more properties [to bid on],” she says.

I should have done the same. But there’s this comfort: At this moment in D.C., a whole bunch of property owners are not paying their taxes.

“This was my first time, so I came in blind,” says Hill. “I’ll try again next year.”CP

Art accompanying story in the printed newspaper is not available in this archive: Photograph by Darrow Montgomery.