Florida Tax Lien question

6 Replies

Hi all, been reading about tax lien in Florida and was curious enough to go on the county tax collector to see what available. I saw quite a few available for purchase. Digging a bit deeper and noticed that all owners are out-of-state, or PO Box address, or companies. How do I find out the actual addresses of the properties? How do I find out if there are any other liens against the same properties? Greatly appreciated for any advice.

In Florida you can buy tax certificates.

These tax certificates don’t give you any rights to the property and your are not even allowed by law to contact the owner until the two years hold redemption period is over.

When you buy a tax certificate, you are expecting the owner will eventually pay the back taxes. You will then be paid back the cost of your certificate plus the interest owned that could be up to 18% per year with a minimum payment of 5% of the total.

If the owner does not pay back the taxes after 2 years. You have up to 7 years to force the property to be sold at auction. You will have then to pay back all the other back taxes and certificates plus some fee. The property will then go to public auction and be sold to the highest bidder. The first bid will be the total amount of money that you paid. If some one else bid and win the auction, you will get your money back plus interest. If no one bids, then the property will be yours.

So basically, tax certificates in Florida are not a way to buy property. Owning a tax certificate does not give you any advantage at the public auction.

Tax certificates are just an investment that can give you a return of up to 18% per year with sometime more when you get paid back the 5% minimum interest a few days after buying the certificate.

When you buy a certificate you have to be cautious of the value of the property, its use, the amount of total tax delinquency vs the total cost of the property, and the likelihood that the property can be sold at auction if needed. Be warned about useless piece of land 1 feet wide by 200 feet long in between roadways, prior single family home that don’t exist anymore but are now vacant land, properties where the amount of back taxes is higher than the appraised value of the property, ...

@Adam Harper

Perform a title search. Get a real estate law firm that does title work or get a title company to run a search. It costs less than $100.00 for residential properties. You will likely find way bigger issues than some unpaid tax lien lying ahead.

Promotion
BiggerPockets
Hard Money Lending Directory
Find Hard Money Lenders in Florida!
BiggerPockets Lending Directory
Find Lenders Now!

Again for tax certificates in Florida you don't need title search. You are not buying the property, you are just getting interest on the unpaid taxes by buying a kind of first position lien, ahead of money lenders.

The tax certificate will show on its description the property PIN it is related to. That number either on the county property appraiser or county tax collector will give you the full legal description of the property. From these two websites you will also be able to determine the total past tax due, the "appraised" value and if other tax certificates have been issued or not.

For buying a real estate property at a Florida county auction (ie tax deed auction), you will need to make due diligence researching all the government liens on the property (code violations etc.) as these will not be extinguished by the tax deed. The bank liens however will.

@Mike S. thank you. You seem very informed regarding tax lien in Florida. I’m a total newbie and tempted to buy some tax liens on several properties available on the county website (not bidding, just over the counter). Some have multiple unpaid tax years. Do you think it’s wise since I have no way to find out any about the properties? Thanks again. 

Originally posted by @Adam Harper :

@Mike S. thank you. You seem very informed regarding tax lien in Florida. I’m a total newbie and tempted to buy some tax liens on several properties available on the county website (not bidding, just over the counter). Some have multiple unpaid tax years. Do you think it’s wise since I have no way to find out any about the properties? Thanks again. 

Over the counter tax certificates are either certificates that were not sold during the June's auction or homestead property certificates that were below the statutory minimum $250 at time of auction and reached that threshold due to late interest fee later on.

In the first case you will have to figure out while the certificate did not sell during the auction. Florida tax certificate market is very competitive and many firms are buying in bulk at auction time. It is very rare to see one certificate staying over the counter. Either the auction has been canceled (buyer not paying, or other issue) or it was not bought on purpose as there is some underlying factors that make it not worthy to purchase.

In the second case you may find good deals. I have myself bought plenty of those. But they are cheap (around $250) and maybe not worth your time as the research time is probably the same than for a more expensive one.

@Adam Harper

The properties with multiple unpaid tax years may get you paid faster. That's because if the other tax liens are at least 2 years old they can apply for a tax deed sale, in which case they have to pay your lien off. Otherwise, you can wait 2 years and apply for a tax deed sale and you'd have to pay off all the other tax liens plus auction fees.

I would at least check out what the property is before bidding. There are some instances where nobody wants to even bid the opening amount on a tax deed auction because the property is unusable or worthless for some reason.