Tax Lien Investment Club

83 Replies

Gentlemen, you are all wonderful and William, I agree with much of what you've said. I have so much to read and learn! That's one reason I will start slowly and not in a big way. I want to take advantage of the $997 rate, hence the rush. 

 I like the idea of this because I understand the concept.  I've been specializing in a  secondary market for collateralized illiquid assets (life insurance policies) for more than 20 years. Before that I was a real estate broker in Manhattan. This is the first thing I've seen in years that excites me as a potential business to get involved in.

I agree I have a lot to learn and a lot of reading to do. It seems that this Club I joined can facilitate that by having it all in one place, providing support, tracking, dealing with regulations and paperwork, like that. In addition, I would still do my own due diligence on each property and follow it, yet with them doing their thing, I can take a more passive role. That's what I'd want. I'm passionate about my current, Life Settlement business and am not looking at giving that up.  But I also like this tax lien option.  

Again, many thanks. I'm open to any and all advice and input.

@Wayne Brooks Thanks. I will definitely take that up.  I still think a class or a course (podcast, webinar, etc) would be advantageous but I appreciate the effort of helping me getting off the ground.

Another great source of information is the NTLA (National Tax Lien Association). They have a conference in Florida later this week, which my partner (John Stanko), is speaking at. My firm also provides tax sale/tax deed information and materials on our website at http://flamm.com/illinois-property-tax-lawyers/ (new seminar materials will be uploaded soon). If anyone has any questions about tax sales in IL, just let me know. Thanks and good luck.

thanks for the new info (for me), Emmett. I've decided to slow it down and investigate more before jumping in. 

I'm under the impression that having worked for 24 years within the secondary market for Life Insurance policies (Life Settlements), coupled with 17 years in residential real estate (from property management to rentals and sales), I will find the learning curve on this easier than most.

Please tell: do you, Emmett and others, think this is a fair initial evaluation?

@Carole Fiedler @Jonathan ChamesI started in tax liens back in the late 1980's in Illinois. I, like you two, was overwhelmed at first. (It didn't help there was no public internet back then either) 

I eventually found that, just like all things in life, you have to give up the ghost on feeling like you need to know everything, before taking an action. That's not to say jump in blindly, but once you realize how massive the sea of different rules are related to tax lien investing, you narrow down your focus to one county, preferably local (if your state is tax liens vs. tax deeds) and then just learn the rules of your one county. From there you attend an auction to see how it is handled. Take a local real estate attorney (who is working with tax lien investors) to breakfast or lunch and ask some questions. 

Then if you still like what you know about lien investing, jump in. Don't go big. Buy a lien on a piece of vacant residential land in a decent neighborhood and maybe a lien on a home or duplex. Then follow the rules. Some states, like Illinois, have actions you must take after a few months of holding the lien. Most other states want you to remain silent and never contact the owner. That's why I say just start with one county, learn the rules and make a small investment.

You will learn the differences for liens on vacant land vs. improved property. But the main thing you will have done is - taken action. Yes there is a lot to learn. 

Remember learning math in grade school? Did the teachers try to have you learn addition through partial differential equations right when you started in first grade? No, they taught you the number line, then grouping, then addition and subtraction - and that was it for the first year! The same goes for tax liens - learn in bite size chunks. 

Learn one county and make an investment. You'll quickly learn the ins and outs once you hold a lien or two. Then you can expand from there. Or move to other REI if you don't like liens.

I wish you both good fortune!

Aloha @Jerry K. et al,

I'm not sure if this thread covers tax deeds at all, but does anyone on here have advice regarding starting in Tax Deeds vs Tax Liens? I live on the island of Kauai, Hawaii, which is a redeemable deed county. I'm learning the rules here as quickly as possible, but I don't have the luxury of being able to travel to other counties to attend auctions. I'm going to have to invest remotely.

I'm in a position where I don't have a ton of cash, so I'd love to get a property as affordably as possible to be able to flip rather than bank on the interest of a lien. After learning everything that I can, I'm strongly considering looking into several different tax deed counties around the country where I can pick up an Over The Counter (OTC) aka leftover Tax Deed property. 

Can anyone with experience in both Tax Liens and Tax Deeds comment on this strategy? Obviously, I'll have to do my due diligence on any property I'm considering picking up with a Tax Deed to ensure that I don't get a crappy property. 

Mahalo (Thanks)!

Greg

@Jerry K. Thank you for that. I will be reaching out to you sometime over the week.

Thank you for being so giving with your time and explanations. Looking forward to connecting with you.

yes, I second that. Thank you to all who have shared your info.

@Greg Horn

Aloha. Just wondering if you intend to invest in Hawaii or out to Mainland. BTW, I have no experience in HI. Hawaii has 4 counties & the redemption period is 1 year with a 12% per annum interest rate.

I like redeemable states myself, it acts both as a tax lien & deed. Personally, I do not like the state that offer interest, I prefer penalty states like GA & TX; meaning you will get the penalty from day 1,GA 20%, TX 25%. My own experience was 60% interest & 40% chances of foreclosing.

Tax deed auction has been very competitive in the last couple years from all the auctions that I have been. I have seem bidding went up to 90% of retail.

Also you need cash; you need cash to pay for the auction & be prepare to spend $17-85K rehab on foreclosed properties, quiet title..; depending on ARV. As most properties has been vacant or been vandalized during or before the redemption period.

If you can't travel, you got to have good & strong boots on the ground to make this business successful. 

Ok, I have read quite a few posts here and there seems to be a little confusion.  I'm only chiming in because I am an expert at buying FL tax liens and have bought tax deeds and conducted quiet title actions without the assistance of an attorney.

1.  The rules pertaining to tax liens are mandated by statute so what is allowable or required in one county is mirrored in all 67 counties in Florida.

2.  You must hold your tax lien for 22 months from the date of origination before you can apply for a tax deed.

3.  When a tax lien is transferred the counties call it an "endorsement" of the lien.  Currently the fee to endorse your lien to a third party is $10. 

4.  Typically when liens are sold on the secondary market for face value plus the interest accrued the sellers gain is in the fee they charge to "transfer" it to you. 

5.  I have bought plenty of tax certificates that were struck off to the county and received my 18%.  You have to be able to find the value of the property through the eyes of others looking beyond the present value. 

As example:

Key Colony Beach Subdivision in Marathon, The Floirda Keys. I recently bought a certificate for an unbuildable sliver of land in that subdivision. Why? As a property owner in that subdivision you are guaranteed inclusion in the Property Owners Association. That means use of the dockage, marina, private beach, pool, fitness rooms, etc etc. It is a cheap way to gain access. Unfortunately the Association redeemed the certificate before I could apply for the tax deed. I invested a total of $120 in the lien. Someone living in the area would be more than happy to give me $5,000 dollars for that type of inclusion. Also, as a POA member you get discount rates for the Key Colony Beach Golf Course. I have bought liens against island properties, RV lots in the Ocala Forest, etc etc. which were struck off to the county.

6.  You will lose your money investing in tax certificates if you do not locate superior liens having a  higher priority(learn to conduct a quick title search). 

7.  You will lose money investing in tax certificates if you are unaware of prohibitive species designated areas.  There are a lot of certificates issued in Charlotte County near North Port due to scrubjay designated areas.  It requires special permiting to build, in some areas you can't get a permit.  Use the Appraisers GIS maps or BOCC maps to find environmentally sensitive or species designated areas.  In Charlotte County it is an overlay on the GIS.  It is easy to find the township, section, range of these areas and delete the whole lot from your perspective certificate list.   

   

That sliver of land more than likely was worth more than 5k to someone local here.     

Hey Leigh, definitely worth more but an easy out with a nice return is a welcome friend.  I am however quite happy with my 18% redemption amount though.  Since your in Marathon, there is an unbuildable subdivision with about 400 lots all owned by the Association, Grassy Key Beach Subdivision.  There are a considerable number of outstanding certificates there.  Unfortunately, all of those certificates held against lands having ocean frontage have been sold off from the county owned certificates list, for last year.  If the subdivision isn't on your radar for this year it should be.  Some of the parcels have excellent ocean frontage.  What would you pay to own a private beach in Marathon?  More than the few hudred dollars for the lien I bet.  

While there is little chance the owners  won't reddem, I again will be quite happy with my gain of interest.  If not redeemed, I will send you a personal invite for drinks on my beach. 

@James Mikel I'm sure you know better, but you may be confusing some with the idea that buying a certificate gives you some type of leg up on owning the property.  You of course still have to buy it by being the high bidder at the tax deed auction if it doesn't get redeemed.

@Greg Horn  Why don't you try to first invest in land.  Lots of any size.  You may be able to find a niche market in HI and pick up some deals.   Mark Podolski and Seth Williams are the experts.  Check out BP podcast #39 I believe for Seth's information.  

Best of luck

For the sake of time,  I was omitting a lot of the details from point of tax certificate and point of ownership for FL tax liens.

More detail:

In short you will obtain your certificate and hold that certificate for 22 months from the date of origination.  If you have obtained the certificate from the county struck off list then you will need to hold for the duration of time until matured.  (Yes it is possible to apply for the tax deed immediately after obtaining a tax certificate that has been struck off to the county.)  Once the 22 months have lapsed you will then apply to the county for a tax deed.  Once your application has been received by the Tax Collector their office will: determine the amount of all other outstanding certificates and accrued interest on those certificates through the end of the month, determine the statutory cost of auction (about $75 currently),  and determine the other small costs associated with the account.  They will then notify you, you will make payment, then the process begins.

The Tax Collector will then:

Pay those other outstanding certificate holders their face value and accrued interest; and, order from the approved title company an Owners and Encumbrance Report; and, surrender to the Registry of the Clerk of Circuit Courts or Comptroller those statutory costs associated with the auction; and, order from the approved vendor an advertisement to run for four consecutive weeks in a newspaper of general circulation in the county; and, remit for recording to the County Clerk's office the statement of service and party accuracy, once the title report has been examined; and, send out letters of public notification to all parties named on the O&E report; and, examine documentation found in the Property Appraisers records to verify legal descriptions, plat maps, etc etc. 

Then if unredeemed, the file is sent to the Clerk of Circuit Courts for review.  If all is meeting statutory requirements then the file is stored or transferred to the Tax Deeds Office or transferred to the Comptrollers Office. (It depends on the county who handles it i.e. Palm Beach County  it's the Comptroller, Marion County it's the Tax Deeds Office, Citrus County it is the Clerk's Office). 

Then if redeemed, you will receive all of the funds invested in the venture and your accrued interest.

If the property moves from this point to the point of auction then the appropriate office will put on their schedule the tax deed sale.  The opening bid for non homestead properties will be those costs you have rendered unto the Tax Collector and the interest accrued, if you do not receive the tax deed you then will be reimbursed.  For homestead exempt properties the winning bidder or tax deed applicant will be required to render 50% of the appraised value of the  property.  This amount is added to the tax deed sale opening bid.  

If there are no bidders at the tax deed sale the party applicant shall pay the required document stamps and if homestead exempt the additional amount added to have the tax deed issued to them; or, if the applicant fails to render payment for any reason the tax deed after 90 days may be entered into the "List of Lands Available for Taxes".  All properties residing on the LOL by statute will remain there for 3 years unless purchased.  Once a tax deed has remained for three years on the LOL the Board of County Commissioners will approve the escheatment of the property to the county.

As an applicant for tax deed you also, just as any other citizen, can bid at the tax deed sale.  

So, you now either have your investment and interest or you have your tax deed.  And this is the short version. 

        

    

You are able to apply for a tax deed in Florida on the 22 month, although the redemption period is 24 months.  The county is accounting for two months to complete the action prior to the tax deed auction which takes place some time after the tax deed application.  It could take more than two months depending on the work load of the county and how far out they are.  In some counties where I have done the tax deed application the auction may take a whole year to be scheduled.  The good thing is that while you are waiting, you will be accruing 18% on the redemptive value of all the back taxes you have paid until the tax deed auction occurs.  You will be required to pay off any and all of the back taxes in order to apply for a tax deed in the state of Florida, plus the tax deed application price which may vary- usually around 200-300 dollars.  

If the property does not sell at the auction you don't make any interest you acquire the property for being the one to take it to this point.  Acquiring the property can effectively be much more than an interest rate when you flip, buy and hold, or rent out depending on your exit strategy.  Having purchased thousands of liens from Florida, and speaking from experience- it is an easy process.  Purchasing liens or deeds are very simple in Florida. 

Depending on your purchases you can make the most of your interest by the action taken.  Or, you can purchase newer liens which have a higher interest rate and wait until the redemption period is up, creating the greatest yield.  Once you have reached the redemption period time frame you will be able to take action by applying for a tax deed which is foreclosing on the property. If you acquire the property it is always good to have an exit strategy prior to acquisition so you know what you will do at the time.  There are many strategies and ways to increase your buying power once you understand your working criteria and what you will have to do to get the greatest bang for your buck. There are several ways to make this happen.  

Properties go for auction as tax deeds 1-2 times a month depending on the county.  You will be able to see them on several auction sites through the 67 counties of Florida.  It is a great state to work in because the foreclosure is so simple.  Understanding it is harder than doing it.  :)  

As i read through the posts, it goes from asking if anyone has any experience with the tax lien buyers club to some very educational teachings on Tax Certificates.

So to bring it home, i have experience with the club and i feel it is a rip off.  i feel they are more concerned with their commissions instead of teaching and looking out for clients best interest.  

@Vince Anderson thanks for posting. It is good to have someone reply with actual experience with them. I have no experience with them, however I am very suspicious of any similar type organization because I know how slim tax lien margins can be a a large scale.

Hey everyone,
I recently went to a free seminar and bought the package on impluse. As a new investor from Canada I don't think it was a smart move by me. I tried to get a refund but they only gave me 50% back. I was giving a username and password to login to register but i have not yet activated. Is anyone interested in buying it from me? Is that possible? 

Just so that no-one gets taken advantage of again, i will periodically re-post this. And it is simply this, "Tax Lien Buyers Club and REI Holdings are a rip off." I just lost 30K and I was told i should have done my own due diligence. How in the #[email protected]#[email protected]# can you do your own due diligence when you are supposed to be teaching your students. I dealt with 2 individuals and it was all about their commission. Fast talkers, and money hungry folks. I also see there is someone from the company on this blog, be very careful and weary of their responses.

if you want the full story you are more than welcome to inbox.

Still pissed every time i think about losing my SDIRA.  I sure am glad that my current company wouldn't have let me take any money out.  I would have been completely hosed, and that's what they were pushing for.

STAY CLEAR OF TAX LIEN BUYERS CLUB & REI-HOLDINGS,

Originally posted by @Juan Gomez :

Thank you very much Chris, indeed I did think their education resources were very good. I have yet to call them but I do want to learn and invest in Tax Liens, I will probably give them a call next week to get started.

I was under the impression that they would let you choose between their inventory. Was that not the case? Do they bundle a package ?

 Hi Juan,

I see that this thread was posted about 6 months ago. I  also got looped into the tax lien buyers club. Love the resources, but want to make that 10 Lein investment and make my initial investment back (buying the program). Did you ever call them? What has your experience been so far? 

Thanks,

Ashley Watkins 

Ashley, 

I recently joined the club as well. I like all the resources, but am wondering if I paid all this money for a book and website where I can't connect with other investors in this club. That worries me. I am learning a lot about tax lien investment though, so I guess I'm getting something for the $1600 I paid. I want to make this work for long term investment, so I'm going to do my best to invest wisely. I'd love to hear how you're doing and keep in touch!

Elizabeth 

@Chris Weaver - So it has been a couple of years. How did your tax lien investment go?

I bought into the club earlier this year. And I got 2 properties from my assigned contact in Cleveland. I've listed them below in case anyone is familiar with the area and can point me in the right direction for analyzing whether these are worth purchasing. 

Both properties started the redemption period on 9/26/14.

1. 383 eddy, cleveland, OH 44108

2. 3040 E 126th st, cleveland, OH 44120

The estimates I see on zillow, redfin, realtor seem to be all over the map. Both areas seem to have a high foreclosure rate. What should I estimates in terms of costs in terms of different exit plan strategies?  

Hi Anne.

IMHO.....Both these areas are in "war zones'.  I caution you and would never buy in this area.  You will not see any appreciation, actually depreciation, or if renting, you will have tenant after tenant trash and crash.  In other words, they will stop paying after 1 or 2 months, trash your home and it will take a few months to get them out.  This will happen over and over again in this area.  The area does not attract good people.  Sorry to say.

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