Elmer Johnson came to Baltimore's annual auction of tax-delinquent properties looking for a bargain -- a house for only a few hundred dollars.
Mr. Johnson, a transportation supervisor for Roadway Package System, joined 400 others crammed into the War Memorial yesterday, hoping to buy a few houses in his Northwood neighborhood to rent out.
The original owners have six months to pay their taxes and regain their properties, and 90 percent do, said Assistant City Collector Ottavio Grande.
So why do so many people show up to bid on the 4,900 properties listed for sale?
It's a great investment.
Those who buy properties at the tax sale, which continues today, stand to make 24 percent annual interest on their investments. Here's how:
A winning bidder pays the city the amount of a lien, which could be for property taxes or other unpaid bills owed the city.
Any recalcitrant property owner who redeems his property within six months must pay the lien amount, plus 24 percent interest, figured annually.
The bidder then gets the 24 percent interest payment, plus the money he paid on the lien.