Looking into tax deed sales in Jacksonville to acquire properties for long term rentals. Have no experience in tax deeds but do have experience with rentals, flipping, and new construction. The MLS is depressing right now and it's tough to buy properties from wholesalers when I just don't think the value is right. Anybody have some words of advice on whether this is a good approach to finding buy and hold properties at a good value? Obviously this is a very general question about tax deeds but any feedback would be much appreciated.
@Carolyn Morales I think might have experience with this or lots.
I’m guessing your Tax deeds auctions are very competitive, like ours. You won’t know if you fon’t look Easiest thing to do is look at the properties in past sales and see what they sold for.
I have also been combing the MLS in Jacksonville, FL for months, but I am not finding deals. Everything is overpriced OR in high crime areas. I am looking for a BRRR but where are the deals? Can anyone offer insights?
Some of the local heavy hitters with large portfolios of rental properties acquire them through tax deed sales, yes! I can answer in more detail later on, have a slight crisis with a family member on a broke down motorcycle
@Carolyn Morales thanks for the insight. Been looking at the few past months of tax deed sales and it looks like you can pick up some “decent” properties. Probably have to deal with a lot of competition and obviously you don’t know the current condition, but for the sale prices they are going for as long as it’s not 100 years old and falling down it might be worth the risk. Besides buying a tear down for too much on tax deed I wonder what are the other big risks to look out for? Hope your motorcycle crisis gets resolved smoothly and quickly!
@Brandon Temples I've just started to research this investment strategy so Im not really sure what I need to be concerned about mostly besides the not knowing the full condition of the property before you buy. Looks like a tax deed squashes alot of previous liens but there still may be certain liens that stay with the property? Do most investors run a title a search before they buy or is that just part of the risk involved? Also, I do understand the concept of a quiet title to get clear marketable title but why would a buy and hold investor care?
It was an honest question not intended to be a critique. You’re absolutely right about buy and hold, but my concern is more for backup exit strategies. It could be harder to get out if something happens and you need to sell. It sounds to me like you’ve thought this through, so I was wondering how you would deal with it.
@Mark Fries Thanks for the heads up....I went on the city site today that lists all the properties up for sale and found a couple that might look interesting. Do most properties get redeemed by the current owners last minute? Should I wait until the day before the auction to look at what is for sale so I dont waste my time?
@Brandon Temples Yes I am an engineer and tend to overthink new things I get into but I typically try to look at the worst case scenario work backwards. It might be worth it to start the quiet title process first while you are getting it ready to rent and get it out of the way. That way if you do need to sell it in less than 4 years you can do it as quickly as possible. Thanks for your feedback!
I agree and was going to add everything @Mark Fries said. Tax deeds including finding dirt, dirt cheap can afford even new construction. I prefer dirt myself., Though we have some rentals. There is less competition in the dirt and there are programs to abate demolition and nuisance liens in Duval County.
@KEVIN MARTIN The more you expose yourself to the process like anything else, the more comfortable you become. Always do a title search, watch out for properties that have been TD numerous times and also filtered through large hedge funds, I recently encountered a nice 2.61 acre piece in a rural area I was going to buy from owner before it went back to the auction. The large certificate investor company I was going to buy it from had every nuisance and demolition lien on other properties come up in the title search for this lot that had no liens and my attorney told me to back out. I had never seen this before. but it did happen like this recently. The lot I wanted had no liens but all nuisance and demo liens on owners other lots followed this one in a title search. It still doesn't make sense to me.
@Carolyn Morales We don’t have that situation in Palm Beach county, but I know in Broward county that their county ordinances are such that a code violation on one property becomes a lien on All other properties owned under that same name/entity. Maybe Duval county revamped their ordinances to do the same.
Perhaps it is because the title company was not from Duval County. I thought all counties had the same statutes but really Duval has great programs in place to rid the municipal nuisance or demolition liens with cost of rehab and new construction. Where I can not find such programs in other counties so easily.
@Carolyn Morales so you do a title search on every piece of property before you bid online? What happens if the property gets redeemed last minute....cost of doing business? I have a good amount of experience with development locally and if you are buying mostly land then I could see how a title search(along with zoning, utilities, ect.) might be more important with tax deeds than an existing SFR.
@Kevin Martin, I actually have not bid online, I only buy Lands available post auction or I intercept auctions or escheatment dates by marketing to owners. When it comes down close to getting a property by whatever method. I recommend a title search. Although @Mark Fries as Mark said, you can become confident in your own public records searches. I just dont likely recommend it right off the bat. Especially I was going to buy that 2.61 rural acres and my own title search would not have produced all liens on owners because that parcel had no liens. I keep my head in tax lists full time now and there is still always more to learn.