I am interested in buying some tax deed properties in Florida. At the moment I am considering Duval County (Jacksonville), Orange County (Orlando) and Miami-Dade County. I have spent a lot of time learning about and bidding at the Houston (Harris County) auction and find it to be extremely competitive. I would appreciate some feedback from anyone who invests in the above Counties. Is it crazy competitive as well? Is it a waste of time trying or have you had some good success?
I look forward to hearing your thoughts
I cannot speak from experience, but I know alot of people make the court house their first choice to search properties, and usually more competition equals bigger prices.
I have been bidding on Duval county Tax Deed sales the last two months and have found it to be very competitive at least on the properties I have tried for. It is all done online now through the Clerk of Courts website. It is free to sign up and watch the bidding.
Yep, south Florida is extremely competitive and I assume NE and central Fl are the same.
Yes, here in Alachua Co I've attended quite a few tax deed auctions downtown in the court house, prepared to bid on some, and each time the price has been bid right on past what I thought was a fair price. One guy paid $5K for a dilapidated 528SF 2BR 1BA cracker shack with no driveway, no garage, 100% dirt 'lawn', in a very scary neighborhood. No idea how he's going to make $ on that, but I wonder if "a fool and his money are soon parted" applies?
Heck, maybe its cash will flow nicely ... just not sure if it will flow to him ... or to his widow.
I can't speak to those specific counties but it's extremely competitive here in Pinellas County. I'll pick up a few deals a year but for the amount of time it takes up it's often not worth it.
In today's Pinellas auction there were 50 properties originally which was down to 37 yesterday when I did my inspections. By the time the auction ran this morning it was down to 24 with the others being redeemed, most of those that were redeemed this morning were the ones I was interested in. Most of the ones that sold were junk that I wouldn't touch. Most had 5 figure code enforcement liens and large lot clearing/securing liens and were in such terrible condition/location that they weren't worth dealing with. There was one prime one that I had the market value as $150k but it sold for $141k and was occupied. By the time you do quiet title, remove the occupants, and get it ready to sell there's no money left......plus it was in one of the worst flood zones in the county. I spent about 8 hours doing research in the office and another 5 hours out doing onsite evaluations and ended up not placing a single bid. It seems like every auction there's a newbie investor with some cash that jumps in and overbids on multiple properties.
I have so many stories of "investors" that have stuck themselves with junk for way too much money at the tax auction. Most tax deed properties are very neglected. Most are properties that everyone has given up on. A lot of times they are properties that have been in foreclose for 5-8 years where the bank abandoned the case years ago because the BPO was so low and when they do that they stop paying the property preservation company.
Speaking of people that stuck themselves with junk, there was a tax deed property I looked at about a year ago next door to one of my rentals. I passed on it because it was too rough to bother with, the rehab would have exceeded the value. Some lady purchased it at the sale and looking in the public records it's the only property she owns other than her primary residence. After about a year of trying to sell it FSBO and the city condemning it she has now torn it down at her own expense. So she paid $12.5k for the auction, thought she was getting some great investment property. She inherited about $12k in existing city liens that didn't go away and then she had to pay $6.5k for the demolition to end up with a vacant lot with very little value.
In comparison I purchased the property directly next door 6 months earlier as an REO. I got to do inspections, got title insurance, and they cleaned it out for me. I purchased mine for less than what she paid at the auction and mine was in good shape and more importantly it's still standing with a tenant in it.
@Patrick L. Wow, thank you for such a detailed response based on your experiences. In my efforts to bid in Houston I encountered many similar situations on very junkie properties. At one time I was extremely gung-ho on this strategy of acquiring properties at the tax sale but since I joined BP I have not heard very many success stories.
I get the impression that this was really undiscovered about 6-8 years ago, and everyone began to hear about it and move into it... and now it's just over-saturated. It's typical of real estate trends honestly. I've also heard about it being a bit ridiculous these days, but, back in the day I remember hearing stories (as I'm sure everyone interested in it did) about people making a killing. I haven't heard anything like that in the last few years though. It's become quite popular.
I know of one positive story, although it didnt happen to me. We're working on a small commercial deal for about 16,000 sq ft, and next door is a single commercial building on .3 acres that we'd love to have to round out the lot and allow for a bit more flexibility in our redevelopment. Current owners have had it sitting vacant and in disrepair for a couple years now, so I thought I might be able to grab it for a great price. I'd be willing to pay at least $250k for it, probably would be willing to go higher after more diligence. They got it for under $30k. Owner mentioned another $30k in court and legal fees, but they obviously made out big time.
They're asking $450k, which is ridiculous, but they're finally fixing it up and obviously don't really want to sell.
Duval County Tax Sale registration website:
I am not particular really, I am buying Tax Deeds in Texas and was wanting to expand into other States as well. I am open to any acquisition strategy really.
Cool thanks! I'll have a look at this.
Tax deeds were the way to go about 5-7 years ago because nobody knew about them. Now the show Flip or Flop has everyone thinking it's easy to go to an auction, pick up a home and flip it. Same thing as Storage Wars. I have personal friends who did that for a living until the TV show came out and now it's not worth the hassle anymore.
Have you ever try to buy property before auction ?
Did you try to deal with owner ? How did you find owners ?