My wife and I are jumping in to the REI world and buying our first property. I've been on BP for years and have dabbled a little bit but never got serious. Now I am. We are looking to buy our first home through a Tax deed sale in Pinellas county Florida. We've made a list and are going to look at the properties next weekend, once we've got our final list. We'll do title searches and that will ultimately determine the final list we bid on next month.
From my understanding if I am the highest bidder. Then I need to do a quiet title action to clear the title and then the plan is to refinance the house and pull $$ out to rehab it. Once we rehab it we plan to rent it out and do it all over again.
Is there a certain period of time I have to wait before I can refi?
Any advice from any experienced investors who’ve purchased tax deed properties in FL before?
I am aware it’s more risky but I’m working to an advisor who has 5+ years experience in tax deeds. Just thought I’d post the plan here to hear any feedback from community here.
I think each lender has their own criteria for the seasoning for a refi. There's no law in place that I know of that stops you from buying cash, walking to a bank, and then putting a loan on it. You'll have closing costs associated with that, though.
Do you have a lender picked yet? If not, interview a few and see who sounds like the best fit. Tell them your plans and ask for their advice. Be warned, some will try to steer you away from anything that's not vanilla standard. Find the one that's good with creative strategies.
You are both inquiring about a potential lender who would help with financing on the tax deed property.
The bank or private lender is going to ask you for the TITLE INSURANCE to protect themselves from any former owner of the foreclosed property filing a suit to annul the tax deed. To get TITLE INSURANCE you will need to issue a due process notification of the initial tax sale and upcoming quiet title suit to any an all former owners and heirs.
LOW COST SOLUTION:
You can at anytime just quiet title and never locate any former owners but the company issuing the TITLE INSURANCE will simply find any heir that you never served notice too and invalidate your eligibility. Keep pawning off your property on other TITLE INSURANCE companies until one accepts it. After your first lawsuit, you will likely never gain another TITLE INSURANCE policy.
Want to see if you can get TITLE INSURANCE on any tax deed property? Find the former owner, knock on their door and give them their post tax sale notice. If they are happy about it then you can easily Quiet the title using a follow up formal due process notice service. I have done this multiple times with my properties. The situation is always tense and the former owners are fully aware that the paper you are holding says they owe money and lost their beautiful home. Skip tracing and process service by a professional will cost about $200 per person and can cost as much as $600 if the former owner wants a carton of cigarettes before appearing to get served.
If you want a loan on the TAX DEED rental home then get TITLE INSURANCE by notifying every former owner with an in-person legal notification of their tax debt by a person authorized to do so according to Florida court statutes.
@Dan Maciejewski Your creditor sees the same clouded title, no matter if you finance a tax deed property or buy a tax deed property for cash and then finance it.
In the end, the bank or private lender is going to ask for TITLE INSURANCE on any property you offer as collateral for a loan.
Why do you think financing a property after paying cash for it allows you to secure a loan?
I'm not sure what you're getting at? OP wrote,
"From my understanding if I am the highest bidder. Then I need to do a quiet title action to clear the title and then the plan is to refinance the house and pull $$ out to rehab it. Once we rehab it we plan to rent it out and do it all over again."
"Is there a certain period of time I have to wait before I can refi?"
I answered that question. Nobody said that "financing a property after paying cash for it allows you to secure a loan," and nobody suggested trying to do that.
I'm not clear why you are replying to me to tell me how to quiet a title?
Thank you for the information and advice to secure title insurance. I don't know any Real Estate Attorneys, Title Companies, or closers that would not strongly suggest/require title insurance on any purchase, though. We all have scary stories even with title insurance.