Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
Inventory has been pretty scarce the last few months for the type of properties I usually buy as rentals so I figured I'd take a shot at the tax deed auction. There were 3 I was going for and I was able to land one of them.
I was wondering if anyone with more experience with this could give me some advice. I'm in FL and I know people will usually do a quiet title action, should I wait for that to get going before I begin the rehab on it? I have the deed and the previous owner and mortgage holder were both given notice of the sale so I don't know what the issues would be, but I'd like any feedback from people that have done it before.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
13y
Maher Bateh Why would you wait to get insurance? I always get it immediately, since I've already paid in full for the property, and what happens if it burns down or if the past homeowner "hurts himself" on Your property moving out.
Cincinnati, OH · Member since 2013 · 292 posts · 81 votes
13y
I know that here, while a tax deed auction will wipe out mortgages, it doesn't affect an IRS lien on the property. Good luck, and I'd love to know how it goes!
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
13y
Search the other threads, there's one dealing with HOA liens surviving a tax deed sale. There's an attorney in Tampa that's supposed to be top notch, name of Hicks? or something similar.
I was told by a quiet title experienced attorney, that also bought tax deed properties, that if a mortgage holder could reverse the sale(not notified) that they had to reimburse the buyer for improvements as well as the purchase price. But, don't take my word for it.
Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
13y
Ben Skove
I know governmental liens will survive, there are no IRS liens on the property. There were some lot clearing liens from the city mowing it but they'll get paid out of the surplus. Not really worried about liens.
Wayne Brooks
I did search around earlier and I saw the lawyer you are referring to (Henry Hicks) and was planning on calling him about doing the quiet title action. I really don't think anybody is going to come back and contest the sale but you never know. The owner was an "investor" that has 10 properties in foreclosure or already foreclosed on, I'm sure he had given up long ago. The bank started the foreclosure in 2008 and the last action on the docket was still from 2008 so they seemed to have moved in as well. It looks like the bank's property preservation company was in the house in 2008 according to the stickers on all the plumbing fixtures stating that the house has been "winterized" (it doesn't get below 50 here often in the winter). Pretty much the house has just been sitting empty for the last 5 years.
Jenkins Ramon
Thanks....double congrats to me when I drilled the locks and found an extra bedroom and extra bath above what I expected. The house is 1,200 sqft and from what I could see from the outside it looked like a 3/1, but it turned out to be a well laid out 4/2 (extra bath has no permit and isn't on record with the property appraiser, but for a $20k buy I'm fine with that). Most of the windows had intact blinds (my tenants never leave them that clean) so I couldn't see in the majority of the windows but I'm always up for a gamble.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
13y
I'm not positive who has priority for the surplus funds, but they do have to apply for them. It might be worth a call to make sure the city/county makes a claim for the surplus.
Centennial, CO · Member since 2009 · 758 posts · 251 votes
13y
I have not bought in Florida, but was just looking at some on the secondary market and understand that Florida has a long (4 year) time period wherein the property owner can contest the sale. This puts a cloud on title that precludes you from selling the property in that time frame, so you will want to proceed with a quiet title action.
Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
13y
Originally posted by Ted Akers:
I have not bought in Florida, but was just looking at some on the secondary market and understand that Florida has a long (4 year) time period wherein the property owner can contest the sale. This puts a cloud on title that precludes you from selling the property in that time frame, so you will want to proceed with a quiet title action.
I know about the 4 year period where they can contest it, that's why I'm going to shell out the cash for an attorney to do the quiet title action. I'm just wondering if I can rehab and rent it prior to that being completed, from what I've seen the quiet title action can take 3-6 months. I could have this place fixed and rented within 2 weeks and be pulling in $950-$1,000/month (but I'd be putting $6-7k in rehab into it)
Investor · Orlando, FL · Member since 2012 · 431 posts · 106 votes
13y
Technically you may have some minor risk that they contest the quiet title action, but based on the situation of an investor with a lot of other properties going through the court system I wouldn't worry about it. It's a very small risk and that risk is mostly mitigated by collecting rents ( assuming a 6 month quiet title action ).
Centennial, CO · Member since 2009 · 758 posts · 251 votes
13y
Patrick L. Yes, I spoke to an experienced attorney and he also said 3-6 months. The liklihood of not prevailing in the Quiet Title Action is very small, but the possible downside to rehabbing (and for that matter purchasing a Tax Deed) is that you would lose all money put into both the purchase and the rehab. However, it is unlikely that the homeowner has the funds to contest the sale process and very unlikely that the sale process was not completed correctly.
Real Estate Investor · Saint Petersburg, FL · Member since 2013 · 1k+ posts · 951 votes
13y
Ted Akers I would worry more about the lender contesting it than the previous owner. There was a $160k note on the house that got wiped in the sale.....but it was a stalled foreclosure that hadn't moved since 2008. I have retained an attorney to handle the quiet title and was advised that I can move forward with my rehab. If the sale is contested and the other party prevails they will have to reimburse me for any rehab costs, legal fees and the amount I paid for the deed plus 12% interest. The odds are slim because they'd have to prove that the deed wasn't valid because the Clerk didn't follow proper procedure.....and with the number of tax deed sales the clerk does here I'd guess it was done properly. I just figured it was worth the $2k expense to clear the title up in a matter of months rather than wait 4 years for a marketable title.
Here is the FL statue:
197.602?Reimbursement required in challenges to the validity of a tax deed.—
(1)?If a party successfully challenges the validity of a tax deed in an action at law or equity, but the taxes for which the tax deed was sold were not paid before the tax deed was issued, the party shall pay to the party against whom the judgment or decree is entered:
(a)?The amount paid for the tax deed and all taxes paid upon the land, together with 12 percent interest thereon per year from the date of the issuance of the tax deed;
(b)?All legal expenses in obtaining the tax deed, including publication of notice and clerk’s fees for issuing and recording the tax deed; and
(c)?The fair cash value of all maintenance and permanent improvements made upon the land by the holders under the tax deed.
(2)?In an action to challenge the validity of a tax deed, the prevailing party is entitled to all reasonable litigation expenses, including attorney’s fees.
(3)?The court shall determine the amount of the expenses for which a party shall be reimbursed. The tax deed holder or anyone holding under the tax deed has a prior lien on the land for the payment of the expenses that must be reimbursed to such persons.
Investor · Jacksonville, FL · Member since 2013 · 73 posts · 2 votes
13y
Patrick - I just bought a forclosure howl at the county steps last week. I am not doing anything until I get the certificate of title which is about 10 days after the auction. In my case 4/2/13. The owners if the property still lives there so I am Doug a writ of possession which gives the owner 24 hours to vacate. Until then is when I will proceed to get insurance etc.. Lucky for us, Florida is definitely hard on occupants that default on their loans and don't pay their taxes. Good luck to you and me as we'll :)
Centennial, CO · Member since 2009 · 758 posts · 251 votes
13y
Patrick L. Thanks, I did not hear that from the attorney I spoke to, although did not go in depth with rehab questions. Sounds like you may have picked up a great deal.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
13y
Maher Bateh Why would you wait to get insurance? I always get it immediately, since I've already paid in full for the property, and what happens if it burns down or if the past homeowner "hurts himself" on Your property moving out.
Ted Akers I would worry more about the lender contesting it than the previous owner. There was a $160k note on the house that got wiped in the sale.....but it was a stalled foreclosure that hadn't moved since 2008. I have retained an attorney to handle the quiet title and was advised that I can move forward with my rehab. If the sale is contested and the other party prevails they will have to reimburse me for any rehab costs, legal fees and the amount I paid for the deed plus 12% interest. The odds are slim because they'd have to prove that the deed wasn't valid because the Clerk didn't follow proper procedure.....and with the number of tax deed sales the clerk does here I'd guess it was done properly. I just figured it was worth the $2k expense to clear the title up in a matter of months rather than wait 4 years for a marketable title.
Here is the FL statue:
197.602?Reimbursement required in challenges to the validity of a tax deed.—
(1)?If a party successfully challenges the validity of a tax deed in an action at law or equity, but the taxes for which the tax deed was sold were not paid before the tax deed was issued, the party shall pay to the party against whom the judgment or decree is entered:
(a)?The amount paid for the tax deed and all taxes paid upon the land, together with 12 percent interest thereon per year from the date of the issuance of the tax deed;
(b)?All legal expenses in obtaining the tax deed, including publication of notice and clerk’s fees for issuing and recording the tax deed; and
(c)?The fair cash value of all maintenance and permanent improvements made upon the land by the holders under the tax deed.
(2)?In an action to challenge the validity of a tax deed, the prevailing party is entitled to all reasonable litigation expenses, including attorney’s fees.
(3)?The court shall determine the amount of the expenses for which a party shall be reimbursed. The tax deed holder or anyone holding under the tax deed has a prior lien on the land for the payment of the expenses that must be reimbursed to such persons.
TO Pat L,. paying and performing a quiet title action quickly would be an advisable action I've seen a major Tax Deed Buyer in Marion county litigate with a bank like Wells-Fargo / BOA / Etc ,
Because they are too big to fail banks,. or should I say too Big and clumsy like an Ox organizations-Dis,. they will tell the courts lies.. like they didn't sent the notice of tax Certificates or notice tax deed sale to the correct location or address even if its one the local bank branches they will lie like hell and as we know it the courts will continually allow and let them get away with it ,. anyone else would be held in at least contempt of court or higher Perjury charges being brought against them. anyways the end resault was the tax deed investor got all of his money back form the sale + his fees and his atty fees plus the upkeep and repairs that were made prior to being informed of formal legal actions the bank was taking,. ..
becareful not to state improvements,. fixing broken windows or plumbing is not an improvement is a repair,. neither is replacing shot worn out dirty rugs / carpets,. but redoing remodeling kitchens / bathrooms can be seen as an improvement not as repair and upkeep,. because the too big to fail banks will still attempt to do a foreclosure on that property by filling an updated list pendents and so on, seen them attempt to do this.. they still had to pay to get the property back in a settlement,. so if your intent is keeping this property then proceed with the quiet title actions,. get them totally out of there legally and to have peace of / in mind,. : ) good luck anyways.. from Rob R Marion co fla
Desoto, TX · Member since 2015 · 3 posts · 0 votes
11y
Hello everyone,
I have a family member who's has passed away over 5 years in Florida. His property has been taken over by his kids.
There is going to be a tax auction shortly. I would like to purchase the property in my company name, this will keep them from knowing I purchase the property.
His children and family members are living in the property.My plan is to allow them to stay in the house by paying a very low...low monthly rent, far below the going rate. I will sent them a notice to go to an attorney office and sign a lease, that would allow them to say there for 3 to 4 years without an increase. I will only do major repairs. Next, I will have an inspector come to the house to inspect the property, and have them sign off the inspection sheet. I know there are lots of repairs that are needed, may be over $40,000! I place in the lease that know repairs will be done unless it is a major repair during the 3rd or 4th year. Because once they know I'm the landlord, One of the family members will spitefully destroyed the place. I know they are leaving within 3 years.
Third, I will have a good attorney to take the cloud off the property within 30 days of me purchasing the property.
My question, am I doing this correctly? Does anyone have thoughts about me doing this correctly.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
11y
@Prince Walker No real comments on keeping your identity secret except, your company will have to be registered in Florida in order to file the quiet title suit. Information in that registering may reveal who you are, depending on how it's done. The quiet title action can be started right away, but will take 3-6 months to complete. Also then tax deed auctions are quite competitive in most counties, so you may have to pay more than you expect.
Investor · La Jolla, CA · Member since 2014 · 32 posts · 4 votes
11y
@Prince Walker I'm looking into Land Trusts to purchase my future Tax Deed properties.
You can have a 3rd party as the Trustee and keep the Land Trust name separate to your name. You would be the beneficiary, but this would not be on the public records. Mark Warda has a book called Land Trusts in Florida.
This would keep your name private.
For the property being auctioned at @Wayne Brooks said they can be very competitive, so be prepared!
Attorney · Orlando, FL · Member since 2014 · 94 posts · 85 votes
11y
There are two very reputable companies that handle tax deed clean up without the expense and time of a quiet title action. Instead of a Quiet Title action these title insurance underwriters give you a tax title certificate. You can then take that certificate and close with marketable title using any of their agents. One is associated with First American Title Company and one is with Old Republic Title Company - both very reputable underwriters.
I am a Florida attorney and can tell you that there is a time and place to go through with the hassle of Quiet Title, but more often than not these two companies are easier and will get you what you are looking for - marketable title for your end buyer.
I have referred clients to both, but I have gotten really good feedback from the OR one.
Real Estate Agent · Los Angeles, CA · Member since 2015 · 109 posts · 43 votes
10y
This is a very informative feed, thank you.
@Laura Richards without the expenses and hassle of Quiet Title process, are you aware if obtaining a tax title certificate for a marketable title to the end buyer is available in Alabama also? Thank you.
Investor · Mineral Wells, WV · Member since 2015 · 30 posts · 2 votes
10y
Congrads to you! I was down to having 1 property with a house on it from our tax sale. The day after I mailed in my Deed transfer payment I seen on line he redeemed it. I didn't do to bad though. I bought 13 tax liens and ended up with 7 deeds.
Investor · Mineral Wells, WV · Member since 2015 · 30 posts · 2 votes
10y
Congrads to you! I was down to having 1 property with a house on it from our tax sale. The day after I mailed in my Deed transfer payment I seen on line he redeemed it. I didn't do to bad though. I bought 13 tax liens and ended up with 7 deeds.