I have been doing real estate for a couple years and I am looking to get into some tax deed sales and I have a few questions. My state is a tax deed state where if the tax payer does not redeem their taxes within 30 days its becomes the tax deed investors. Well usually the investors here wait about a year then they get a quiet title.
My question is if I invest on one $50k + tax deed and it has a building etc. on it. Are you able to get insurance on it after the 30 day or can you get forced place insurance put on it?
How do you protect your investment from someone thats mad or an accident while your waiting for you 1 year?
Hello Ali Brooks,
Re: Response to Your Question
This is a very good questions and it obviously presents a challenge for you and others. Quite frankly, here is my best suggestion. While protecting your investment during the (1) year, until the quiet title is complete, and if you actually now own the Tax Deed:
1. It might be to your advantage to contact a Licensed Attorney-at-Law whose primary focus is in the Tax Sales Area, who will help you with this issue.
2. Also, contact at least two or three of the major Insurance Companies via phone to ask if they will insure the property prior to the "quiet title" being complete or if they know of any companies that will do so.
3. Do not get discouraged if their response is "not until you have title insurance".
As such, it is a strong possibility that (maybe) you may not be able to get insurance on the property until the "quiet title" is complete in which you can then get Title Insurance. This clearly may be one of the "risks" when finding a property of interest/that is desirable in which you may want to insure in the event of some accident or unforseen event. Meanwhile, as a suggestion, you may want to Place Private Property Signs on the Property as well--only if you are now the new owner.
Force Placed Insurance Issue: I did a little research on this and it does not appear that Force Placed Insurance would be applicable in this case at all since it appears that Banks or Lenders usally do this only if a Homeowner does not have adequate homeowners insurance on properties they are financing. However, if you are in a state like PA that offers properties at Upset Tax Sales (excluding Judicial & Repository Tax Sales)--where the mortagages, liens, etc. transfer to the successful Tax Sale Bidder, it might then be something that you want to explore---which again leads me to encourage you to seek the advice of a licensed Attorney-at-Law that Practices Tax Sales or Just Simply contact any one of the major Insurance Companies Direct and Ask them Directly----that is usually a Free Call, but you may want to ensure that you speak to someone that knows about insuring Properties acquired at Tax Sale. I would contact a good insurance company first--at least two or three of them-- as you may eventually want to get the insurance from "a reputable insurance company"- at the end of the day.
Finally, if you are going to Invest heavily into Tax Sales, it would be to your advantage to locate a Good Attorney-at-Law and an Insurance Company that you can Team-Up with or work with on a regular or continous basis as you Buy/Invest in Your Properties, Deeds, or Tax Lien Certificates.
I hope this helps you---Truly!
Much Success As You Invest!
Your question has a reply to it.
I hope that it is helpful to you.
Is the money accruing interest while waiting for the redemption period to expire? If they somehow pay that tax off, that is a long time to freeze cash.
It also seems like you can only get insurance for a building only after you have title to the building.
Talk to a local attorney, insurance agent. But, if similar to here with tax deeds (not liens or certificates), when you get a tax Deed, you have title, you own it, you can insure it. You don't have to wait for the quiet title action. Insurance co.s may verify your ownership, they don't do title searches or concern themselves with potential title issues. As said, force placed doesn't apply here, you Own it.
for newbies, this is an extremely complex area and none of the above, for example, applies in CA even though it is a tax deed state. It is really a state by state issue.
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