Tax Liens in Baltimore City

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Tax Liens in Baltimore City

Patrick G.
Abingdon, MD · Member since 2013 · 193 posts · 60 votes

Hello, I have a questions specifically to the tax lien sales in Baltimore City. (The auction is next week.)

To get right to the point. The question is can I purchase a tax lien certificate after the auction and subsequent “Assignment Sale”?

The longer version. The auction is held on-line on May 20th, 2013. Later in the week, the City attempts to sell the remaining tax liens through the Assignment Sale on May 23, 2013. According to data from previous years tax lien auction results and Assignment sale results, there have been left over tax liens, that do not sell. On Baltimore City’s frequently asked questions page #29 specifically states “Subsequent to the Tax Lien Certificate Sale and Tax Lien Certificate Assignment Sale, Tax Lien Certificates are assigned on a first come-first served basis and can be assigned over-the-counter directly from the City. They may also be assigned by mail. All certificates are freely assignable.”

I sent the auction help desk an email to inquire about this process, however, they only handle the auction and could not assist with what happens afterwards.

My hope is that I could purchase a single small tax lien certificate to get my feet wet, test the waters and learn the process. The main benefit to purchasing after the auction that I see is not having to pay the $100 application fee. (I would be too late even if I wanted to) The downside that I see is that I will only have all the left over options, but from what I can tell from past years the left overs seem to cover the whole spectrum.

Thanks for your time,

Patrick

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

I only went once to the AA county sale. I got blown out and never went back.

Risks in tax sale
Bankruptcy - usually just ties up your money longer.
IRS lien - never happened to me, likely not a problem if it does show up.
Fire - Happened to me once but the property redeemed anyway.
Voided lien - In Baltimore you only get your principal back but no interest and you could be out attorneys fees.
City Screw ups - Perhaps the most likely risk is the city will screw up and you will have to take a lot of time to get the issue corrected.

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  • Patrick G.
    OP
    Abingdon, MD · Member since 2013 · 193 posts · 60 votes
    13y
    Originally posted by Ray Corkran:
    Now here is my question. How or what makes a property qualify for the Certificate of Substancial Reapir?

    One definite criteria is that the property has to be vacant. How the City determines what qualifies as "Substaintial" I'm not quite sure. It may be if any of the windows or doors are boarded, in the front or back.

    Originally posted by Ray Corkran:
    and is their a cost for the certificate.

    It's $100. Which is added to the Tax Lien regardless of whether or not the CSR is issued or not.

    0Reply
  • Ray Corkran
    Involved In Real Estate · Baltimore, MD · Member since 2013 · 62 posts · 8 votes
    13y

    Ok, so they automatically add that fee in.

    When you went for the list is there a specific department I'm going to be looking for? I saw a there's a Tax Sale Division located in room #1. Is that where I need to go?

    0Reply
  • Samson Williams
    Fort Lauderdale, FL · Member since 2013 · 3 posts · 1 vote
    13y

    @Patrick G Thanks for the Certificate of Repairs info. I got mine for 203 N Monroe last week and will start the foreclosure process tomorrow. Taking the day off of work, to really work.

    Thanks for all the info. A most useful blog.

    0Reply
  • Patrick G.
    OP
    Abingdon, MD · Member since 2013 · 193 posts · 60 votes
    13y
    Originally posted by Samson Williams:
    @Patrick G Thanks for the Certificate of Repairs info. I got my for 203 N Monroe last week and will start the foreclosure process tomorrow. Taking the day off of work, to really work.

    Thanks for all the info. A most useful blog.

    Ned still hasn't gotten his, so maybe that means they are coming soon.

    Did you receive your Tax Certificate in the Mail? You can't start the foreclosure without it. I am waiting on mine.

    0Reply
  • Patrick G.
    OP
    Abingdon, MD · Member since 2013 · 193 posts · 60 votes
    13y
    Originally posted by Ray Corkran:
    Ok, so they automatically add that fee in.

    When you went for the list is there a specific department I'm going to be looking for? I saw a there's a Tax Sale Division located in room #1. Is that where I need to go?

    I did not purchase "the list". I used the results of the Tax Sale to compile my own list. That is why I'm curious as to how often they update the list.

    I believe you purchase the list from the cashiers. So you walk in the front of the building, and thier is an MVA style counter to your RIGHT where you wait in a queue to go to the next cashier.

    You do go to ROOM 1 to purchase the tax lien. You sign your name to the clip board that says "TAX SALE" and you WAIT for them to come get you. Then you are only allowed to ask about Three (3) properties, so you better make it count! Otherwise you have to sign your name again and re-WAIT.

    So if the list is not current, I would be upset to pay $10 for the list and then wait only to find out my top three choice were redeemed or purchased in June.

    0Reply
  • Mike Kooser Sr
    Pasadena, MD · Member since 2011 · 46 posts · 2 votes
    13y
    Originally posted by Samson Williams:
    @Patrick G Thanks for the Certificate of Repairs info. I got mine for 203 N Monroe last week and will start the foreclosure process tomorrow. Taking the day off of work, to really work.

    Thanks for all the info. A most useful blog.

    The property you bought is vacant? Just wondering did you drive by the house before you bought it..

    Just curious on different peoples process they use.

    0Reply
  • Jamaal Hunt
    Wholesaler · Brooklandville, MD · Member since 2013 · 149 posts · 29 votes
    13y
    Originally posted by Ray Corkran:
    Ok, so they automatically add that fee in.

    When you went for the list is there a specific department I'm going to be looking for? I saw a there's a Tax Sale Division located in room #1. Is that where I need to go?

    No you would go to one of the cashiers and obtain the book. I did the same mistake too. Unfortunately my funds are just too low to really make that serious splash. :(
    0Reply
  • Samson Williams
    Fort Lauderdale, FL · Member since 2013 · 3 posts · 1 vote
    13y
    Originally posted by Mike Kooser Sr:

    The property you bought is vacant? Just wondering did you drive by the house before you bought it..

    Just curious on different peoples process they use.

    Yes. The property is vacant.

    I drove by. Parked. Got out. Walked around the block. Checked out the house. I did it on a Monday morning, Friday afternoon and then Saturday night (If you don't have it in you to walk around the neighborhood Satuday night after 11PM I completely understand) and then Sunday afternoon. I didn't do it all in one week but over a period of time. Also checked out other places in the neighborhood.

    I just wanted to know what I was getting into. But yeah, exercise due caution if you're gonna be walking around at night.

    1Reply
  • Ray Corkran
    Involved In Real Estate · Baltimore, MD · Member since 2013 · 62 posts · 8 votes
    13y

    Oh ok, I may be wrong it's been a while since i was last in that building but I remember the cashiers are on the right side when you walk in.

    Thanks Jamaal Hunt

    0Reply
  • Patrick G.
    OP
    Abingdon, MD · Member since 2013 · 193 posts · 60 votes
    13y

    Yes, when you walk in the cashier is on the Right. There is some other booth/counter on the left. Not sure what they do there.

    0Reply
  • Ray Corkran
    Involved In Real Estate · Baltimore, MD · Member since 2013 · 62 posts · 8 votes
    13y

    Thanks for the info Patrick G.

    0Reply
  • Christina R.
    Investor · DMV Maryland · Member since 2013 · 867 posts · 370 votes
    13y

    Mike Kooser Sr - always drive by the addresses. I'm sure you already know this. Patrick G. suggested to me that Google Earth was pretty accurate in depiction and I found that to be true of the list of properties I scoped out in June when buying over the counter. One property was suggested to me that looked promising in location (across from a bus stop, some businesses operating there and also a LAUNDRY right across the stress) but I could not determine after several trips around the block -- I was by myself and not getting out of the car -- if there was fire damage behind the steel plates on the door and windows. Google Earth didn't show the image THAT clearly either.

    Does anyone know how often Google Earth updates its images?

    www.bidbaltimore.com - click on the "documentation" link on the home page and there is usually an updated (daily) file of redeemed properties.

    0Reply
  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    13y
    Originally posted by Ray Corkran:

    Now here is my question. How or what makes a property qualify for the Certificate of Substancial Reapir? and is their a cost for the certificate.

    The cost is $100 that is the easy part.

    A substantial repair certificate will be issued if the house has a "vacant house notice" The tax lien list will list houses that are listed as vacant by the city. This generally means it is boarded up.

    However a house with a vacant house notice could have a squatter or have the boards taken off and some repairs done but still be considered a "vacant House" by the city. However a house could be clearly vacant but not have a vacant house notice.

    The tax lien list will specify if it has a vacant house notice but you can also go to baltimore housing.org and look up violations to see if there is a vacant house notice. If a house is boarded up you can probably get a Substantial repair certificate even if it doesn't yet have a VHN.


    If you have the certificate you can start foreclosure immediately. It is not 60 days from your the purchase of the lien, but 60 days from the original auction which has already passed.

    Patrick G. wrote


    Just spoke to a title company to day. He reviewed the case that Scott did and said it was one of the best done tax cases he has seen from a title insurers perspective. The underwriter at Chicago Title said the same and approved it in a day. Chicago title is one of the toughest and tells their title companies "do not insure tax sales without our approval" So I thought that was high praise for Scott.
    Ned still hasn't gotten his, so maybe that means they are coming soon.
    . . . You can't start the foreclosure without it. I am waiting on mine.

    I picked up most of mine today, so I beat you! LOL

    I was at the tax sale office today and they do not automatically add the $100 to the redemption amount. Furthermore they will not collect it until the certificate has been issued which is contrary to what I previously believed. You will have to give the tax sale office a copy of the Substantial repair certificate in order to get your Tax lien certificate. The Lien certificate is required to file the foreclosure.

    0Reply
  • Patrick G.
    OP
    Abingdon, MD · Member since 2013 · 193 posts · 60 votes
    13y
    Originally posted by Ned Carey:

    I picked up most of mine today, so I beat you! LOL

    I was at the tax sale office today and they do not automatically add the $100 to the redemption amount. Furthermore they will not collect it until the certificate has been issued which is contrary to what I previously believed. You will have to give the tax sale office a copy of the Substantial repair certificate in order to get your Tax lien certificate. The Lien certificate is required to file the foreclosure.

    Ned Carey, What did you pick up? You picked up your Certificates of Substantial Repair, or you picked your Tax Lien Certificates?

    I keep getting conflicting information on making sure that the $100 is added to the redemption amount. I have two emails from city employees stating that it would be added. So if it is not added and the property is redeemed, I am losing $100 on this deal and will be very upsest.

    Are you saying that I have to go back to Room 1, give them my CSR and then I will receive my Tax Certificate? I thought they mailed the tax certificate.

    I really don't want to go back there, it takes too long and I have to take time off of work to get there.

    0Reply
  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    13y

    Patrick, I picked up my sub repair certs and took them across the street to the tax sale office. The tax sale office told me they would have my lien certificates Monday.

    You don't have to go down in person to give them the Substantial repair certificates and at the bottom of the certificate it says Tammie Holly the tax sale supervisor was CC'd on the letter. However I would at least call or email the office with an attachment. - Ned

    0Reply
  • Patrick G.
    OP
    Abingdon, MD · Member since 2013 · 193 posts · 60 votes
    13y

    I am sending my brother down to the Tax Sale office to 'Pick Up' the tax certificate. Hopefully he gets to walks out with it. Then I would still beat you! Otherwise he might get the 'come back Monday' line.

    Kinda bummed, I've been sitting on the CSR for almost a month!

    0Reply
  • Patrick G.
    OP
    Abingdon, MD · Member since 2013 · 193 posts · 60 votes
    13y

    Well, my brother got in and out in under an hour, however he got told, "Thanks for the CSR, come back next week for the Tax Certificate." Which is pretty frustrating, since I have emails from 2 seperate city employees telling me that the housing department would notify Tax Sales department of the CSR, In addition, as you said Ned, the CSR itself says that Tammy Hollie from the tax sale office was copied. I can happily say that Ms. Hollie did return an email from me to let me know we had to physically pick up the tax certificate. It could of saved us a trip if she was able to accept the CSR pdf I sent and tell us to come back next week.

    This whole system of sign your name and wait in room 1 is ridiculous! If someone had told me how MVA like this process was, I may not have signed up.

    0Reply
  • Mike Kooser Sr
    Pasadena, MD · Member since 2011 · 46 posts · 2 votes
    13y

    Just remember if it was easy everyone do it , but it will all pay off when you get the interest or if you happen to foreclose on a property.

    1Reply
  • Ray Corkran
    Involved In Real Estate · Baltimore, MD · Member since 2013 · 62 posts · 8 votes
    13y

    I never expected they would run out of the lists but that is what happened to me today when I went there this morning about 10:30am. I was told they "sold out" and to come back Monday for a newly updated list. So, I will be there Monday and try it again.

    0Reply
  • Patrick G.
    OP
    Abingdon, MD · Member since 2013 · 193 posts · 60 votes
    13y

    We can just start a REI club and meet in the lobby of room one!

    0Reply
  • Ned CareyPro Member
    Moderator
    Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
    13y
    Originally posted by Mike Kooser Sr:
    Just remember if it was easy everyone do it ,

    Exactly Mike. I share a lot of information here and elsewhere on how to do this and one might ask am I helping my competition? No, I know most will give up when they realize how much hassle this is.

    I think Patrick G. is about ready to crack now! lol

    Ray Corkran wrote


    Actually Ray that may be a good thing. You know when you get the list it will be current. Liens that have been purchased by others will be removed.

    Ned

    1Reply
  • Christina R.
    Investor · DMV Maryland · Member since 2013 · 867 posts · 370 votes
    13y

    @ patrick g - next time don't go vacant, go occupied and then you won't be frustrated so fast but over a longer period of time! ha ha!

    0Reply
  • WAYNE G.
    COCKEYSVILLE, MD · Member since 2009 · 65 posts · 28 votes
    13y

    This is a great thread on Baltimore City tax liens. Ned, as always, is doing a fine job. Glad to see all the people interested in tax liens.

    An advantage of a vacant property over an occupied property is less chance of a lead paint lawsuit. See the Dackman case: http://caselaw.findlaw.com/md-court-of-appeals/1522965.html

    0Reply
  • Christina R.
    Investor · DMV Maryland · Member since 2013 · 867 posts · 370 votes
    13y

    This is the stuff that makes me wonder if I should start filing for foreclosure on the tax lien bought or not. Squatters can sue and win. Scares me even though I know there is risk in this business.

    0Reply
  • Patrick G.
    OP
    Abingdon, MD · Member since 2013 · 193 posts · 60 votes
    12y

    GAME OVER!

    Well, My first run as a Tax Lien investor is officially over. I came home yesterday to a check from Baltimore City for the Property. I had a little bit of a scare becuase the check I recieved did not include the fees for the Substaintial Repair Certificate or the Lawyers Retainer. That is $600, compared to my tax lien investment of around $450. However I contacted the Lawyer, and found out the Fees were paid directly to him, so he will forward a check to me for that amount.

    All things said and Done, here are my numbers:

    06/20/2013 -$459.48 Initial Tax Lien Purchase

    06/20/2013 -$2.50 VCN Fee (The City Office Charges you to pay by Credit Card, next time bring a check)

    06/20/2013 -$2.00 Parking

    06/24/2013 -$100.00 SRC Application

    07/08/2013 -$500.00 Lawyer's Retainer

    07/26/2013 -$2.00 Parking (Drop off SRC)

    08/20/2013 -$2.00 Parking (Pick up Tax Certificate)

    _____________________________________

    Total Cost = $1,067.98

    10/24/2013 $483.50 Check from the City for initial Lien and Interest

    10/30/2013 $600.00 Check from Lawyer for Fees

    _____________________________________

    Total Reimbursements = $1,083.50

    So Basically my brother and I made $15 in four months. Obviously that was not worth our time in the 3 trips down to the City Office. However it was an invaluable experience and learning oppurtunity. If you just look at the interest paid, we made over 5% of our money in 4 months. If we would have invested more money, then the overhead costs we paid would seem much less in comparision. So I can see how the big players are using tax liens as a great investment tool.

    Overall I am rating the experience as very positive. I really appreciate the support and guidance put out by the biggerpockets community and especially Ned Carey. I hope to try this again next year!

    2Reply
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