Buying Tax Lien Certificates Online

[Jeff James]

I would like to hear from individuals who purchase tax lien certificates online.  I am specifically interested in learning how to perform due diligence over the internet prior to acquiring certificates at auction or buying certificates that don't sell at an auction directly from the county.

I try to look for the same things online as I do when I look at local properties but I often find that some of the data that I look for is missing from the various websites.

Also, being from Indiana where multiple years worth of back taxes are combined into a single certificate, are there different strategies involved when buying certificates in a state like Florida where separate certificates are produced for each year of delinquent taxes--especially when prior certificates have been acquired by different individuals or corporate entities?

I appreciate any feedback that the Bigger Pockets community can provide.

[Ned Carey]

I buy at online auctions. But I buy in my area, properties that I have inspected. 

The property is collateral for your investment. You have to have an idea of what the property is worth. Because condition has such a dramatic affect on value, I inspect virtually every thing I bid on.

[Wayne Brooks]

Be aware, when you buy a certificate in FL, then want to be paid after two years if it hasn't been paid.....in order to send the property to an auction, You have to pay off all the other certificates outstanding, prior to sending the property to auction.

[Dwain Beckford]

As Ned said it is very important to inspect the properties to make it is something  of value to secure your investment. Otherwise you can make the mistake of buying the certificate on buffer land that the taxes will never be paid and you can end up loosing your money.

[Jeff James]

@Ned Carey, @Wayne Brooks, and @Dwain Beckford--thank you for your input.

I have been doing as much research as I can do online.  As a result, I am reasonably confident that I am not considering buying certificates for landlocked properties.  I encountered several of those while doing research and eliminated them from consideration.

As I reviewed the FL liens I encountered several certificates that are approaching seven years in age--as I understand it the certificate is only good for seven years.  Would it be an appropriate strategy to buy 2014 certificates for properties that have older outstanding ones because the certificate holder will either have to begin the tax deed process or lose the investment?

Thanks again for the input I have received to date and I appreciate any future advice as well.

[Dwain Beckford]

your right 7 year certificates will become unforcable(if that's a wordl) very soon. If you are buying outstanding certificates it's a good strategy to buy 2 year old certificates, those you can begin an application  for a tax deed. But that doesn't mean you will get the property, it will have to go to an auction first, if it doesn't sell then it will be yours, which is highly unlikey. Going into buying tax certificates almost should never be about getting the property, it should be about the security of the investment, the interest yield backed by the real estate.

[Wayne Brooks]

There is no organized market for the "resale" of prior certificates. Not sure how you'd find someone wanting to sell, and they certainly wouldn't be worth more than par. 

[Paul Spangler]

I was looking into this a while back based on the strategies that the US Tax Lien Association (one of the "guru" companies, interesting perspective but not sure about actual results) uses.  If you are buying a lien online then it didn't sell at the auction, which they say doesn't mean that it isn't a good lien, it just didn't get bid on.  Someone already brought up the fact that a lot of liens are on empty lots with little to no value to you, so it's good you already know about that.  If you happen to find a lien that is older, then it just means that you don't have to hold it as long before the redemption period is up and you can start the foreclosure or auction process.  As far as researching goes, Google Maps, Zillow, etc. are all good for preliminary research, but you want to know if the structure on the parcel is still in good shape.  For that, I would recommend contacting a local real estate agent and asking if they could stop by if they are in the area and maybe send you a picture.  You basically want to avoid a situation where the house burned down, or it was a drug house that has notices posted on the door, etc.  Never pay more for a lien than the land is worth should help you avoid a total loss, as long as it's a decent lot in a decent area.  Lastly, if you are buying online then I would check with whatever county you are looking in to see how soon they post their leftover liens after the auction.  A lot of those lists don't get updated so if it's a while after the last auction a lot of the good stuff will be picked through and no longer available, which would be a waste of researching time.

[Anastasia Jordan]

You need to have boots on the ground in whatever area you are buying in. 

DO NOT SPEND MONEY WITHOUT HAVING SOMEONE VISIT THE PROPERTY FIRST!

I have had several people contact me to do a site visit after the fact that they spent thousands of dollars.  Some turned out to be crackhouses, hoarder houses, abandoned/condemned property in the ghetto, empty lots, burnouts.  I don't know they ended up so unlucky.......

[Shimira Greene]

What is considered "giving notice" when an investor (tax lien/deed) gives when the property is occupied?

[Stanley Reader]

My name is Stan  so what is a legit site to buy Tax Liens on that show all the states.

[Reuben Gathright]

@Stanley Reader Assuming you are wanting to buy post-sale tax liens, each state has its own unique way of issuing tax liens or tax titles.  

Additionally, a sellers premium is typically added to post-sale tax liens which increases the price of an already risky investment (risk being no assurances you will hold deed to the property).  

As a result, the post-sale tax lien marketplace has not been organized into a single online portal.  I see this as a strength for the focused investor because it prevents institutional buyers from hording all the tax liens with block purchases.

ANSWER:  Rather than looking nationally, you should look local.  Many counties only sell their adjudicated or abandoned properties over the counter.  Visit each county office responsible for selling or managing unpaid property taxes to get the process started to take possession of them.  

For example, in Louisiana, I had to drive 60 miles to the Cameron Parish Assessor's office to get a list of adjudicated properties.  No such list exists anywhere online and it was filled with great outdoor properties that were then sold to local hunters at a major premium.  The real bargains are not always homes or online tax liens but rather those properties hidden in the tax rolls of the county next door!

[Jason James]

Hello I been purchasing them for the last few years from Arizona from multiple counties. (Maricopa, Apache, Mohave, etc.)The information on the properties from the county sites are pretty thorough with all Parcel and Tax Assessment info. Some of the sites allow you also to conduct a birds eye view. For the sites that don’t  allow Birdseye view, you can always use google .

https://treasurer.maricopa

[Sean Leonard]

Thought I'd resurrect this post to see if anyone had any updates.

I'm seeing that a lot of the initial offering tax lien certificates, by some counties, are being auctioned on-line (not a secondary market for liens that went unpurchased at the in-person aution). Does this change the "boots on the ground" approach?

A lot of information regarding crime statistics, and other information can be gathered on-line now.

Does this make buying liens outside of your area easier?

What resources do you use, if you bid this way?

--Sean