I've been studying Florida tax liens (certificates) for 6 months now. I've read and reread Statute 197 (the legal go to). I'm ready to make bids on a particular counties' auction which has 2,700 properties up. In comparing previous years certs, I've found that many of the winning bidders are large corporations. In my studies I've learned that these large corporations create dozens upon hundreds of subsidiary companies to bid in a sort of umbrella fashion, doing so by flooding the auction site with bids to ensure success, and in turn bidding down the percentage rate (it doesn't matter that they are getting .25% return, because they bought 800 at a time type mentality).
True, many will wait for the certs that go unsold and are struck to the county to avoid the bid war, but in this particular county, these properties are truly the bottom of the barrel.
So my question is this - It is actually possible for me, little old just me to have even the slightest chance of competing, and winning? Is there a strategy to implement to increase my odds? (ps, this is an online auction where upon you may bid on a property the moment the list comes out, which it did today)
Probably, but I've never thought it worth the effort, and the risk for maybe 5%. You realize that if you do win one, and want to get paid back later if the owner doesn't redeem, you have to pay off all the other tax certificates on that property and the fees to send it to the auction. So assuming it does sell for enough at then unctions on over all the certificates, you may have had to put up 3-5 times your initial investment just to send it to the auction, to hopefully collect your investments call, and your interest.
Thanks for your reply Wayne.
Yep, I know what would be expected of me if the property doesn't redeem. In that case I'm actually not opposed to following thru with the deed application and acquiring the property. From what I can tell, that process is not too often carried out, and it's actually kind of my strategy for acquiring. That being said, I am trying to carefully choose which property to bid on, and only consider properties that, if it comes to the final step, wouldn't leave me high and dry.
@Stephanie Fay To be clear, you don't acquire title when you go thru the deed application process. It simply sends the property to the monthly tax deed auction, where you have no advantage over the other bidders. You simply get paid back your money, and interest. And if you haven't noticed, they're paying top prices at the auction.
That's right. I need to keep reminding myself that part of the deed process. I don't have priority over other bidders. And my money I put up to APPLY can get lost if someone outbids me at auction.
That's the part I can't get to sink in. I listened to a podcast recently and the guest was asked what the negatives are. He didn't even mention that part.
So that leads me to this...how do I find out when a property has gone into the deed application process, and become one of the general public bidders; placing a bid with out having to put up the application money. I may have found it, but not sure...
On this counties' tax collector site, you are able to search "Deed Status" and sub search, "Applied". A list is produced, but when you click on it to get information, it says to please contact the tax collector for information on this account.
Is this that?
Thanks again for all your advice. I feel like I finally have enough information to have a conversation about this to help me make the right choices.
I don't know which county, but most have their tax deed auctions online, just like their mortgage foreclosures. Some still have live ones though. That county Clerk of court site should at least have an auction schedule somewhere, with a list of properties, even if the auctions aren't online. And the search you mentioned Tax Deed search is usually on the Clerk of Court site. You can search by sale date (say after 05/01/15) and generate a list that way.
Which county are you looking at investing? I have a handful of counties in Florida with auction results.
You might find this chain of posts in the forum interesting. There are a series of images from spreadsheet analysis I did of the results of Palm Beach County in FL. I broke out each lien that was sold, by winning bidder and then also added in property type to help show which types of property received higher rates of interest. Here is the thread http://www.biggerpockets.com/forums/70/topics/9919...
If your ultimate goal is to get the underlying property, then go straight to the tax deed auctions like @Wayne Brooks mentioned.
Here are some county websites that offer them:
As everyone else said if your goal is to obtain the property itself tax liens are not the way to go in Florida. Nearly all liens get redeemed and those that do make it to auction will go to a third party bidder unless the property is terrible. The ones I see go back to the certificate holder here in Pinellas are only vacant lots in the hood where the city demolished the structure.....which come with a demolition lien and usually plenty of lot clearing and securing liens as well.
thanks for the input. Yes, the deed auction is where I should be if I want to acquire. I looked at some of those sites last night (realizing I'd been on them in the past already). It's not really my goal to obtain thru the liens, but accept and am aware of the possibility. I see the lien certs as a no brainer on returns and a sort of soft way to get my feet wet with REI.
Jerry K., I'm looking at Monroe County. They don't seem to do (many if any) deed sales, and so for deeds I'd be looking at Broward. Also, thanks for the links. I'll check 'em out.
Jerry K - great overview and analysis on your attached links. I think you are right - prices are frothy and unless you have some special insight or lower cost of funds, it might not be a great time in the cycle to enter the market. I know that we cant compete on local knowledge or costs of funds - so we have no competitive advantage.
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