Has Anyone Done Tax Deed Auctions in FL?

Question

Anyone done tax deeds in Florida or participated in the auctions?

What are the watch outs or steps that you recommend?

Often times, there's houses or land worth $500k listed with an opening bid of $30k which is a fantastic deal; however, if you were to win the auction, there may be multiple liens and $100s of thousands of hidden fees that you have to pay at once (based on what I read online). So it may end up costing you $400k within 30-60 days without any financing options.

How do people overcome this when you do your due diligence? Do you hire a title company for all the properties you're interested in before the auction? (ex. you like 20 properties, would you pay $150 x 20 properties before the day of the auction?) In other words, you would have already invested thousands prior to the auction just to research the properties and their titles.

What is your recommendation because without doing a proper title search (which sometimes takes weeks and passes the auction date), how would you know if what you're buying is a good investment?

Stephen Morales · Answer

I've done several over the years and there are certainly some opportunities to be had. Although I will say that it has been flooded with hedgefunds and out of town buyers that drive up the price to where there is little meat left on the bone to make it worth the purchase.

In Duval county, it's very easy to pull up any liens, open permits and code violations on the property simply by looking them up for free online.

If you do want to go the route of paying for a deep dive on each property you can. But pro-tip, don't bother doing this until you get closer to the auction date. Normally close to half of the auctions end up being redeemed before they auction ever starts.

Bruce Lynn · Answer

I have not bought tax deeds in FL but donon Texas.

#1.  Lots of swamp land for sale...so know what you are buying and know what your exit strategy is.  Easy to buy, not as easy to sell.

#2 Read the property code 2-3 times before you start ....the tax sale portion.  Usually you can find this online.

#3 Chances are you will never buy a $500,000 property for $30,000.  They may never actually go to sale, they will get bid up or there is way more to the story.  Those are like 1 in 10000 opportunities.  Could happen but very rare.

#4 See everything you plan to buy in person.  Not online not in Google aat view, not Google Street view.   That helps you eliminate properties but not decide what to buy.   I have visited many where street view looks awesome and of course you get excited.  Get there in person and find the house in a sink hole or wrapped in meth lab tape or some other huge issue not seen online.

#5 There used to be a lady named Sandra Edmonds I believe and she went by the name of TAx Lien Lady.  I believe she is out of Palm Beach.  I don't know her, never met her, never went to her classes, but from what I saw on YouTube she seemed to know her stuff and classes were reasonable.  If I were going to buy in FL I would get to her class if still offered.

Floyd Johnson · Answer

I have started this journey over the last 4 months. I focus on tax deeds as that is very different than foreclosure and tax liens so maybe narrow down what your investment strategy is. Luckily in Florida once you are registered with the counties on the online portion of the auctions, you can see what recent prior bids and winning bids are. I have to say, to get into this, it is an investment of time and resources. Even if you narrow down your area. Some counties have multiple 10-30 sales per week. Some have none a month and everything in between. The due diligence is vital, as someone said above, before you buy, you need to put some eyes on it either with an agent going to take photos or some other method. You should not buy site unseen in Florida in my opinion. So many factors with weather and other issues can change from one week or even days to the next where you are putting a lot of risk out there. I have 2 assistance whom focus on a 10 county area currently who log data and do due diligence for comps, environmental issues, title issues and other investigations and takes them a total of 30-40 total hours a week. And then, a week before sale, everything gets redeemed so all the effort out the window lol. However, it is worth it as not many will put in that work and research as it is rewarding when you get what you want. My biggest issue is having enough money to get half of the items that come up so I have to prioritize which causes more last minute issues.

Michelle Robbins · Answer

While I haven't bought any tax deeds, I've done a lot of research into tax deeds in Florida.

For the counties I've looked into (the ones on realauction) they publish the title report for all the properties headed to auction. You can look there to make sure the property doesn't have a conservation easement or other liens attached to it.

I've learned most of what I know from Aaron Kinder's youtube channel and with private consultations with him. He's definitely an authority of Florida tax deeds as he's been in the business for 20+ years.

Arthur Schwartz · Answer

Each county will often have a website or clerk where you can look up liens against a specific property.  However, it's possible that not all lines are posted.  Also, about seeing a property in person:  I have found local real estate agents, who are willing to go out and take photos and email to you, for a modest fee.

Robert B. · Answer

Yes

Bruce Lynn · Answer

#2...not the zoning, although that can be important too, but the actual property code in the Florida statutes about tax liens and the process.  Might start here: http://www.leg.state.fl.us/statutes/index.cfm?StatuteYear=20...

There should be a section about the lien and deed process that each county has to follow.

#3.  when you say "being sold" do you mean the minimum bid amount or the actual sales amount?  Not sure about FL, but many places don't publicly list the purchase amounts, so tough to know what they sold for.  From what I understand HOA/POA dues don't get wiped out with foreclose sale in FL, so if you see a $150,000 condo get sold for $50,000, could you still owe $100,000 in back HOA dues and special assessments?   If the county is just posting the minimum bids and that is what you are seeing, they'll likely sell for a lot more than minimum.  I could be way off, but I really don't think you can buy homes at the tax sale in most circumstances with $100-$200,000 spreads between purchase and sales price.  Every now and then something will slip thru like that, but it is not common anywhere in the country.

#4. If you don't look at them before buying in person, you will get burned at some point and regret it.   I see it happen all the time.  You see a house on google street view, bid like there is a house there, and you bid your $50,000 minimum bid up to $100,000 for your $200,000 house.  You're so excited you won and you go drive the property.  Then see it is a vacant lot.  You talk to the neighbor and they tell you the city bulldozed the house last week, because it was destroyed in a hurricane.  So no you just bought a lot worth $25,000 for $100,000.  Or you see a nice lot, maybe oceanside, so you get all excited.  You buy it and now go to look at your beachfront and see a dumpsite of shingles or tires, that will cost you more than the lot is worth to clear out and maybe have the EPA just waiting for someone like you to jump on with fines for the cleanup.  EPA violations typically travel with ownership.   Want to buy an old commercial building or gas station that had leaking PERC or leaking gas tanks?  Often you can't see all that without being there.  Maybe that is why the old owner didn't pay their taxes?

Bob Asad · Answer

Thanks for the information. Regarding #2, do you have an example of what is defined as the "property code"? (are you referring to zoning?)For #3, I see multiple properties being sold like this, not $30k; but $200k properties being sold at tax deed auctions for $50k-75k

#4 - I don't see how this could be realistic, how would someone have time or money to visit every single property in person especially when participating in multiple auctions across the state?

Bob Asad · Answer

So are you spending $100s of dollars per property prior to the tax deed auction for title research?

Robert B. · Answer

Generally….Avoid HOA foreclosures. Also, Since my buy box is pretty narrow, even though I’m pretty good at doing the title research myself, I’ll still pull a title report for each one. I’ll also call code enforcement and check the county records just to see when things like roof/hvac have been done/permitted.

Has Anyone Done Tax Deed Auctions in FL?

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