Foundational Expertise

           

TexasTaxDeedGuru System

 

Here is the mastery framework that informs all system decisions:

 

Legal & Procedural Core

 

Component Texas Property Tax Code Reference

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                                                       Critical System Implication

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Auction Time & Place§34.01(a

)Auctions are held on the First Tuesday of the month, between 10:00 a.m. and 4:00 p.m., at the county courthouse or approved online portal. System Task: Daily check for newly posted lists 21 days prior to the First Tuesday.

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Minimum Bid Calculation§34.01(p)

The minimum bid is the lesser of:

1) The total taxes, penalties, interest, attorney fees, and court costs, OR

2) The property's market value at the time of judgment (HCAD value).

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Redemption Period§34.21(a),(e)

180 days for non-homestead/non-agricultural property. 2 years for homestead or agricultural property.

 

Redemption Premium§34.21(b)

25% premium if redeemed in the first year (or first 180 days). 50% premium if redeemed in the second year (for 2-year properties).

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Due Diligence§34.01(d)

Tax deeds are sold WITHOUT WARRANTY. The system attempts cross-reference for all surviving liens (e.g., Federal Tax Liens, specific HOA/MUD liens) and subsequent taxes not included in the judgment.

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GuruDB Population & Quality Assurance

 

Initial Agent Count: 87 concurrent scraping and cross-reference agents are deployed to begin populating the GuruDB with the required fields.

 

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GuruDB Example Population Metrics

 

This forms the foundation for our Targeting Algorithm.

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Minimum Bid (MB)                   Tax Sale List                                         $27,284.85

Market Value (MV)                    HCAD                                                $128,952.00

Redemption Period

Property Use Type (from CAD )      2 Years (Flagged as Homestead/Residence)

Profit Ratio                                      (MV/MB)MV/MB128,952.00/27,284.85=4.72x

Surviving Liens

County Clerk Search (Simulated)                     NO (Clear of Federal/HOA Liens)

 

 

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To move beyond the simple Raw Profit Ratio (MV/MB), the system accounts for the two primary financial outcomes: the high-return, low-effort redemption, and the high-equity, high-risk acquisition.

 

Core Financial Formulas

 

                             Metric   Formula      Rationale

Maximum Gross Profit (MGP)

MGP=MB×(1+Premium)The guaranteed return if the owner redeems.

This drives bidding confidence. Premium is 25% (180-day) or 50% (2-year).

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Acquisition Equity Gain (AEG)

AEG=MV−MB The immediate equity gained if the owner does not redeem.

This is the long-term wealth-building metric.

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 True Profitability Score (TPS)

 

The TPS is the single, weighted metric used to rank every asset in the GuruDB. It prioritizes fast returns and clean title.

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TPS=(MBMV​)×(Surviving Lien Risk MultiplierRedemption Rate Risk Factor​)

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Score Component Value Rationale

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Redemption Rate Risk Factor1.5

(180-day redemption) 1.0 (2-year redemption)Bonus for Fast Cash: A 180-day redemption cycle is preferred for capital turnover, so it receives a 1.5x multiplier.

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Surviving Lien Risk Multiplier1.0

(No Liens) ≥1.5 (Yes, Liens Present)Penalty for Title Risk: Properties with surviving Federal/HOA/MUD liens require additional legal cost (Quiet Title Suit) and time, severely penalizing the TPS.

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Risk Categorization and Targeting

 

The TPS is used to assign a mandatory Guru Category to every asset, which dictates the system's bidding and capital allocation strategy.

Guru Category   -   Bidding Strategy

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A: Cash Cow

TPS ≥4.0Highest discount and lowest risk (clean title, often 180-day).

Ideal for maximizing guaranteed MGP.                                           Aggressive: 

Key Strategy                                                                         Bid up to 125% of MB to secure the asset.

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B: Solid Equity

2.5≤TPS<4.0Excellent discount, but may have 2-year redemption or minor risk.

Focus on maximizing AEG.Targeted                                              : Bid only at MB.

Key Strategy                                                                                        Only pay the minimum to acquire.

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C: Deep Value/Risk

TPS < 2.5Low discount, high lien risk, or poor valuation.

Low capital efficiency.                                                                        Avoid:

Key Strategy                             Only secure if no other bidders are present (i.e., bid MB if struck off).

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 The Full Operational Cycle 

 

This is the continuous 30-day loop that drives the system:

1. Preparation (Day 7 - 30):

   • Agents pull new lists, cross-reference data, and populate GuruDB.

   • Financial model calculates TPS for all assets.

   • Capital is allocated to A and B Guru Categories.

2. Execution (The First Tuesday):

   • Bidding Agents execute the Protocol Matrix live.

   • CI Agents record competitor behavior and final sale prices.

3. Post-Acquisition (Day 1 - 6):

   • Deed Filing Agent records the deed and triggers the redemption clock.

   • Tracking Agents send certified notice and pay current taxes.

   • Legal Module begins Quiet Title for any lien-encumbered properties.

 

 

 Strategic Objective

 

Deliver a quantitative, rule-based investment engine designed to exploit the statutory discount and guaranteed premium of the Texas tax foreclosure market while simultaneously minimizing title risk and managing capital turnover. The process is scalable and repeatable across all Texas counties.

System Status: Fully Operational. Proceeding to continuous deployment