Tax Deed Sales and Effective Title Searches in FL

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Tax Deed Sales and Effective Title Searches in FL

Chris Heinmiller
Rental Property Investor · Jacksonville, FL · Member since 2016 · 19 posts · 6 votes

Morning BP!

Does anyone have any advice regarding doing your own title searches? I've been spending a considerable amount of time researching the tax deed sales process in Florida, and although I'm starting to feel a bit more knowledgeable and comfortable with the process overall, there is still one component that really scares me- title searches. 

I know you can pay an attorney or a title company to run a title search for you, but that can be expensive, especially considering I'll want to run titles on multiple properties at once (in preparation for a tax deed auction). In addition, considering the best time to research the properties in question would be 24-48 hrs before the auction (to ensure you aren't researching too many properties that will ultimately be redeemed/ paid off by the owner), I'll need to turn the title searches around pretty quickly. 

I know how to pull records using the county clerk website and I know it is important to have a clear chain of title, but there is so much info that comes up when you do one of these title searches. What's important? What is irrelevant? Any big gotchas and watch-outs? I have not yet purchased my first tax deed property, so I worry that I'll execute the process relatively effectively, just to realize that I missed or misinterpreted something that will result in having to pay thousands for something on which I wasn't planning.

Thanks,

Chris

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Bruce Lynn
Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
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I would also agree with @Ned Carey, with the exception of governmental liens.  Normally in my area those don't drop off and are not negotiable.  These would be things like lawn mowing liens, demolition liens on crack houses, code enforcement type liens, IRS liens, Federal Terrorism Task Force Liens, etc.  Occasionally if you are a nice guy, pitch the right plan....like I'm cleaning up the neighborhood and want to be a good citizen, and bring donuts and coffee to the people with the lien...every now and then they are nice back and might drop or negotiate with you...maybe 1/2...but I think that is more the exception than the rule.  My guess on most of these IRS will not pursue you for someone else taxes unless it is unusual...like 10,000,000 mansion you bought for $50 at the sale.

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  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
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    @Chris Heinmiller WHY do you want to do a title search?  In general Tax sales wipe the title clean. 

    Virtually everything in the land records is unimportant. There are exceptions but generally rare. If you are buying vacant land for example, there may be restrictions what you can do with the land. I once bought a piece of land that unusable because it was the land set aside for the HOA community to have enough trees.

    We sometimes do a bankruptcy search to make sure the tax sale won't be voided but we would still get our money back if it was in bankruptcy. 

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  • Bruce Lynn
    Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    4y

    I would also agree with @Ned Carey, with the exception of governmental liens.  Normally in my area those don't drop off and are not negotiable.  These would be things like lawn mowing liens, demolition liens on crack houses, code enforcement type liens, IRS liens, Federal Terrorism Task Force Liens, etc.  Occasionally if you are a nice guy, pitch the right plan....like I'm cleaning up the neighborhood and want to be a good citizen, and bring donuts and coffee to the people with the lien...every now and then they are nice back and might drop or negotiate with you...maybe 1/2...but I think that is more the exception than the rule.  My guess on most of these IRS will not pursue you for someone else taxes unless it is unusual...like 10,000,000 mansion you bought for $50 at the sale.

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  • Chris Heinmiller
    OP
    Rental Property Investor · Jacksonville, FL · Member since 2016 · 19 posts · 6 votes
    4y

    @Ned Carey I suppose my concern was with the government liens @Bruce Lynn brought up. How can you catch these? I'm sure this goes without saying, but what I don't want is to win a house that has double the amount I bid, in IRS liens or in some other type of lien. I have heard most of the governing authorities are relatively open to negotiating on these gov liens, but I'd rather know about them before the auction then find out after. 

    My county has tax deed auctions 1-2X a month. Although I haven't bought a tax deed property yet, I have been practicing by going through the due diligence process on the properties that will be auctioned and then checking, post-auction, to see how I would have stacked up against those who actually bid on the properties. You can tell a lot of people get auction fever as they bid at, or over market value for some of these properties. That said, there are always a handful of properties that go for 80-90% below market value, some of these properties being relatively nice condos and other homes. I can't help but wonder what I'm missing, as that seems too good to be true...thoughts?

    Thanks for the feedback, gentlemen!

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  • Ned CareyPro Member
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    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    4y

    @Chris Heinmiller yes an IRS lien is worth checking. I should have mentioned that. 

    Out of well over 10,000 tax liens that I have bought we have run into I believe only 2 IRS liens. So the risk is small but it could be serious if it comes up. 

    There is a way to deal with IRS liens but my guess is the process in FL may not address that. I don't think an IRS lien would affect your equity but it could certainly rob you of otherwise justified profit. 

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  • Bruce Lynn
    Real Estate Broker · Coppell, TX · Member since 2011 · 5k+ posts · 4k+ votes
    4y

    @Chris Heinmiller You might want to check your FL condo laws about HOA dues and penalties. I've heard FL is a little different, that these don't always get wiped out by foreclosure, but I don't know 100% about that. Probably good to check with attorney about that...or someone that really knows well FL tax sales. You might not want to pay 3-4 years worth of back HOA fees or some big transfer fees. Those fees also add up while you are rehabbing or holding for resale.

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  • Will Sifert
    Investor · Covington, LA · Member since 2012 · 517 posts · 317 votes
    4y
    Quote from @Chris Heinmiller:

    @Ned Carey I suppose my concern was with the government liens @Bruce Lynn brought up. How can you catch these? I'm sure this goes without saying, but what I don't want is to win a house that has double the amount I bid, in IRS liens or in some other type of lien. I have heard most of the governing authorities are relatively open to negotiating on these gov liens, but I'd rather know about them before the auction then find out after. 

    My county has tax deed auctions 1-2X a month. Although I haven't bought a tax deed property yet, I have been practicing by going through the due diligence process on the properties that will be auctioned and then checking, post-auction, to see how I would have stacked up against those who actually bid on the properties. You can tell a lot of people get auction fever as they bid at, or over market value for some of these properties. That said, there are always a handful of properties that go for 80-90% below market value, some of these properties being relatively nice condos and other homes. I can't help but wonder what I'm missing, as that seems too good to be true...thoughts?

    Thanks for the feedback, gentlemen!

     I buy vacant land tax liens so I come across demolition liens, code enforcement penalties and liens, grass liens etc a good bit. You will find some of these liens on distressed and abandoned houses as well. 

    If it’s a “lien” it will be easy to spot when you are title searching the property. I check 100s of properties for liens before bidding on them at tax lien sale. It takes a few hours but time well spent. 

     

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  • Mariel DeVito
    Member since 2022 · 115 posts · 49 votes
    4y

    @Chris Heinmiller I am in Fl and have started exploring tax deeds.  As someone mentioned, Florida does things differently.  Not sure if you are sticking with Duval County as you tagged Jacksonville but you will need to learn how different each county is.  It is a lot of work to do the title searches.  Thankfully, some counties have developed their sites to show everything you need in one page and identified through multiple tabs.  My concerns with tax deeds are (1) if it is currently owner occupied (good luck trying to get them out if you end up with the property), (2) some vacant lands are crap (marsh land, non buildable, etc.), and (3) appraised value (I won't bid beyond its appraised value - some do which doesn't make sense to me).  Hope this gives you some insight!  Good luck.

    PS when you attend a tax deed...not sure if you ever been to one but the Fl ones I've been to are fast and quick.  It can be daunting and it may pressure you to push your limit up.  Don't.  Stick to your budget as per your research.

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  • Chris Heinmiller
    OP
    Rental Property Investor · Jacksonville, FL · Member since 2016 · 19 posts · 6 votes
    4y

    @Mariel David-DeVito I thought the tenants/ owners were removed by the county prior to auction?

    I completely agree with you regarding the appraised value. That said, I’ve seen one or two properties, that actually go to auction that would make decent BRRRRs based on the comps and a VERY generous potential rehab budget.

    I don’t know enough about buying land on its own to even worry about the open land for auction, but I’m not completely against it.

    Thanks for the great input, really appreciate the help!!

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  • Mariel DeVito
    Member since 2022 · 115 posts · 49 votes
    4y

    @Chris Heinmiller Nope.  If you read the disclaimers, it will say that they are not responsible for you, as the winning bid, on how to (physically) acquire the property should it be occupied.

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