Tax Lien Sale time in FL

8 Replies

I am studying the tax lien certificate sales in Tampa Bay, FL. It is a long term investment strategy which I am interested in. Mainly because there is a minimal amount to invest with at this time but I the little I do have is only earning $.05 per month in a traditional savings account (it really hurts). So researching and talking to investors of tax lien certificates, it is low risk and more often than not, rewarding.

There have been several conversations about it here but I do know some of what I've read is incorrect. In this county in FL, once the redemption period has expired on a cert, you will receive a letter from the county to advise that you may apply for the deed. If you are the cert owner and you apply for the deed, paying all fees, back taxes for processing the foreclosure, the property belongs to you. So the investment comes down to paying to process the deed application if the cert is not redeemed. FL also has deed auctions.

Anyone in FL have more insight or advice? Online cert auction is in 6 weeks and I have an option to purchase certs from another party who has done all of the leg work. Want to get my feet wet and doing all I can to have a positive experience. Open to any suggestions and feedback.

@Marquita Smith Hello Ms Smith, from all of the information that I have read, the paying of all the taxes and filing for foreclosure papers doesn't automatically grant you the property. Once the county sends you that information you can apply for foreclosure and then the property goes to the tax deed auction where the Cert owner has the opportunity to own the property free and clear should no one bid on the property.

No offense but I would strongly suggest you do your own research the properties in which you plan to invest in. I would physically go and see these properties first hand, Google is great and all but sometimes they get it wrong.Your eye may be different than someone else's.

Pretty sure that the mature certs have to go to public auction at a tax deed sale, which goes to the highest bidder after the cert holder has been paid their investment + return. I have bought numerous Tax deeds in Hillsborough County...actually living in one right now, believe it or not. There are typically other liens on the properties besides the tax liens and those creditors deserve a chance for some sort of remuneration, if not made whole entirely...which is what the auction process allows.

I don't think I would classify it as low risk. In every auction, I see a handful of cert holders left holding the bag on practically worthless parcels. The certs are not redeemed and no one bothers to bid on the property at the tax deed sale. At that point, the cert holder gets title, but many of these left over parcels are slivers and portions of land that you can not monetize.

It is a highly competitive business. Wells Fargo, Deutsche Bank, etc and multiple private equity firms bid on the certs in Hills County.

The bottom line is, do your homework. Check out to make sure the property has some value before bidding on the cert. Mostly, I would stick with residential...although under the right circumstances, I might consider an office or retail property (industrial areas and industrial properties carry a lot of environmental risk and probably best avoided) That is my 2 cents. Hope it is some value to you.

@Jerald Alford "doesn't automatically grant you the property"...and you are correct. according to county tax collector FAQ:

26. WHAT IS THE TAX DEED PROCESS?
The holder of a Tax Certificate may at any time after two years have elapsed from April 1st of year of issuance of the Tax Certificate and before the expiration of seven years from the date of issuance, file a Tax Deed Application with the Tax Collector. The Certificate Holder must pay the Tax Collector all amounts required for redemption or purchase of all other outstanding Tax Certificates, any omitted taxes, current and delinquent taxes, plus interest and fees. The Tax Collector will certify to the Clerk of the Circuit Court a list of all persons required by law to be notified prior to the sale of the property and a certification of monies involved in the application. The Tax Deed Applicant will then be notified of the additional funds needed for advertising and other costs. After all necessary advertising and noticing, the Clerk’s Office will schedule a Tax Deed Sale date. The Tax Deed Applicant receives 18% per annum interest on the application, beginning the month after application through the month of redemption or Tax Deed Sale date. If the property is purchased by a person other than the Certificate holder, the Certificate holder will be reimbursed all of the sums paid, including the above referenced 18% interest. For complete rules please see Florida Statute 197.502.

So in your opinion and maybe prior experience, is it worth the time and risk?

@Eric Odum , yes it is helpful. I have been researching Hills and the surrounding counties and would only consider residential for possible rental income, flip for profit or personal use.

I'm practicing due diligence now. familiarizing myself with the research tools. Any tips there? Will you participate in Hills upcoming auction?

@Marquita Smith When you buy a tax Certificate in Fl, you are simply lending money to the county, and Hoping you get all of your money back, along with whatever interest rate you had to bid down to, usually 2-4%. After 2 years when you want to collect your money, you have to come up with the money to pay all the other certificates sold on that property, plus clerk fees and publishing costs, etc. then at the auction, IF someone bids high enough to cover All the outstanding taxes, you get paid from the proceeds. You have no advantage at that auction. You could buy a $1,000 certificate, then have to pay off another $8,000 in certificates in a few years when you want to send it to auction, then either 1) you get your money back, plus interest or 2) you could get stuck with a property worth $4,000.

@Marquita Smith , probably not. That is not my cup of tea. I prefer to try and get a little higher return and have access to the deeper fee simple market, if I need to sell. In other words, I am more interested in buying the tax deed than the certs.

I think the due diligence process is pretty much the same. Go look at the property and make sure you would want to own it. Make sure you give yourself plenty of cushion on the bid that you are not close to the value of the property. Check the other tax liens and other government liens, like IRS. You can definitely get burned if you are not paying attention. I have seen Certs go to auction with a starting bid of $15k on a knock down and the lot is not even worth $5k. It makes me wonder what the heck the cert buyers were thinking.

@Eric Odum and @Wayne Brooks , thank you very much for your insight and experience. I am going to do my homework and take my time. It is a starting point for me and hope one day I can invest more aggressively. I will let you know which way I go and the outcome.

@Eric Odum  

, how does the property at a tax deed auction get "sold" without going through the actual foreclosure process? Is there some kind of exemption due to the delinquency being taxes?