Tax Lien Investors in Georgia
Atlanta, GA · Member since 2015 · 33 posts · 4 votes
Hey everyone,
I am looking at getting into REI and figured I would start with investing in Tax Liens. I was hoping to get in touch with people are are located or have invested in Tax Liens in Georgia. As this is my very first REI I am trying to get as much solid information before investing. Any information or tips would be helpful.
Thanks in advance
Sundiata Jackson
I play multiple sides of the coin on Tax Liens in GA. I am an investor who purchases the liens. I have had some redeemed, and had to do the foreclosure of right to redeem, and the quiet title action on others. I am also a real estate attorney who does the foreclosures and quiet title actions for my clients. If anyone has questions, but would rather do a little reading before asking, I have tried to break down the basics at
http://kimandbagwell.com/pitfalls-for-the-inexperi...
I only recently got started here at bigger pockets, so the best way to reach me is at my work email, which you can find on the website i just linked to.
Here lately, there are a lot of investors bidding way too high (presumably with other people's money). I see no way some of these bidders have any sort of exit strategy on some of the properties they're bidding on.
Final word of warning; Fulton County (where Atlanta is, mostly), is a bit of an anomaly in that the tax commissioner has transferred their tax liens on most properties to various sub-entities of Vesta holdings, Investa Holdings, investa services, etc... , and then the Sheriff's office is auctioning those liens off, rather than directly from the Tax office. While there is case law out there to question the validity of these transfers, the County still operates in this way, and it can complicate the foreclosure of right to redeem as well as the subsequent quiet title action.
Hi, GA is a redeemable deed state. That means you are bidding premium to get tax deed in GA. There are one year redemption period. Interest 20% for the 1st year.
Be prepared to bid close to retail.
Quiet title is needed to clear title or wait 4 years.
The following link has a lot of good info for GA tax sale.
http://www.biggerpockets.com/forums/70/topics/1409...
Also Cobb county has a very good description on tax sale in GA.
@Tom Young
Thank you for your help. I am new and still trying to get the hang of all this. How does the pricing work to purchase tax deed? I feel a bit silly asking ut what is the difference between tax lien and tax deed? I have seem then used interchanably but have also seen people talk about them seperatly.
Hi, GA is a redeemable deed state. That means you are bidding premium to get tax deed in GA. There are one year redemption period. Interest 20% for the 1st year.
Be prepared to bid close to retail.....
Thank you for your help. I am new and still trying to get the hang of all this. How does the pricing work to purchase tax deed? I feel a bit silly asking ut what is the difference between tax lien and tax deed? I have seem then used interchanably but have also seen people talk about them seperatly.
Nothing silly about this, I was in your shoes 4 years ago when I first started investing in US.@Sundiata Jackson
A tax lien is a lien registered against the property. You have no right to the property until the redemption period is over & you foreclose the lien. eg AZ, IL,
A tax deed is you are purchasing the right of the property. eg. CA
A redeemable deed is somewhere in between tax lien & tax deed; which gives the owner the right to redeem. eg TX.
About half of the states are tax lien states, the other half tax deed states. I think there are 6 that are redeemable states. FL has both, it first sale as a tax lien (Is happening now "May"). If the lien is not redeemed. Then the lien holder can apply it to go for tax deed sale.
Hope that clear up your confusion.
Nothing silly about this, I was in your shoes 4 years ago when I first started investing in US.@Sundiata Jackson
A tax lien is a lien registered against the property. You have no right to the property until the redemption period is over & you foreclose the lien. eg AZ, IL,
A tax deed is you are purchasing the right of the property. eg. CA
A redeemable deed is somewhere in between tax lien & tax deed; which gives the owner the right to redeem. eg TX.
Thank your for clearing that up. I read the previous thread and there is a lot of information in there that is extremely valuable. So thank you for pointing me in that direction. What counties in GA have you bid on properties? What is a strategy that you use to get good quality properties either that are redeemable or usable?
This is only based entirely on my own thinking of investing in tax sale; other people have their strategy.
Quality property? pull as much list as possible every week, every month, do due diligence on the ones that you think have potentials & bid on them. I pulled at least 2 to 3 lists even on the counties & states that I do not invest in; just to know the in's & out's. You will find out you will run out of money before the quality properties run out. LOL.
Profitable? You have to have at least one Exit strategy before buying any liens. This will help you to decide where, why, how much. rental or flip; thus enable you to prepare the budget for that bid & whatever payments that is needed. (Some states you have to pay back tax after the sale & some state, You want to pay the subsequent years tax; so you get the maximum interest.)
I have attend bidding in 5 counties in GA, only successful in 2. crazy competition now, Stick to your maximum allowable bid for each property, DO NOT try to work the numbers to WIN the bid. Give you an example, Last sale in May, one property was bid up to 120% of what Zillow stated. The same area price I paid in 2013 was 40% of what this guy paid for his; when taking into the consideration of age, condition & square footage of the house.
Would you recommend this type of investment for someone with limited funds? I've notice that in Florida you can buy tax liens for a couple hundred dollars, is this possible in Georgia or because Georgia is different the cost per property is higher?
I will not recommend tax deed investing with limited funds in GA.
Beyond the point of competitive bidding. There is a redemption period of one year. Most tax deed properties need some sort of rehab before renting or selling. This all cost $.
let's say, tax rate in GA is 1.5%. So when there is a parcel that is listed for sale for $200. So the accessed value is around $1200. ($50 to cover interest & service charge to sale the lien by the county). Any good value parcel of land is worth more than $1200. So basically is a waste of your $.
This applies to FL as well. Most lien get bid down to .25% - 2%, If the owner redeems for your $200, you get $10, as FL has a minimum redemption rate of 5%.
But do not got discourage, save up a little more, go to smaller counties. Competition is not as bad. But make sure you have a exit strategy; as properties in smaller counties are harder to rent or sale.
Thanks for all of your advice. You have been extremely helpful. I will continue to save up and continue to search smaller counties. Is there a REI vehicle that you would recommend for a beginner with limited funds?
Unfortunately all REI cost money somehow.
But I can share a story how I find the funding when I started out investing in Tax sale.
I started in REO & short sale in 2011 with my own $.
Sept 2012, I run into Tax sale, I spent 7 months doing my research on this subject. April 2013, I wrote to other investors about tax sale. this were all new to them. I provide a portfolio for the April 2013 Fulton county tax sale to showcase my thinking & my strategy. I raised $200K investors $. This is my initial pot of funds for tax deed investing in GA.
That is a creative way to raise funds. I will get the ball rolling on figure out some more creative ways. Thank you again for all your help. If you ever need someone to look at some properties in Atlanta let me know. I currently in North Fulton but can do some traveling so help out a fellow investor.
I will take that as a rain check to use it later. Thank you for offering the help.
take care & good investing.
In Georgia after the redemption period, the other mortgages and liens on the property aren't wiped away like they are in other states? Thanks in advance.
mortgage & other liens will be wiped off in most state tax sale( there may be one or two states that do not wipe off mortgage liens; I can not remember which states.) government issue liens stays.
Same with HOA liens will stay with property in most states.
I play multiple sides of the coin on Tax Liens in GA. I am an investor who purchases the liens. I have had some redeemed, and had to do the foreclosure of right to redeem, and the quiet title action on others. I am also a real estate attorney who does the foreclosures and quiet title actions for my clients. If anyone has questions, but would rather do a little reading before asking, I have tried to break down the basics at
http://kimandbagwell.com/pitfalls-for-the-inexperi...
I only recently got started here at bigger pockets, so the best way to reach me is at my work email, which you can find on the website i just linked to.
Here lately, there are a lot of investors bidding way too high (presumably with other people's money). I see no way some of these bidders have any sort of exit strategy on some of the properties they're bidding on.
Final word of warning; Fulton County (where Atlanta is, mostly), is a bit of an anomaly in that the tax commissioner has transferred their tax liens on most properties to various sub-entities of Vesta holdings, Investa Holdings, investa services, etc... , and then the Sheriff's office is auctioning those liens off, rather than directly from the Tax office. While there is case law out there to question the validity of these transfers, the County still operates in this way, and it can complicate the foreclosure of right to redeem as well as the subsequent quiet title action.
I play multiple sides of the coin on Tax Liens in GA. I am an investor who purchases the liens. I have had some redeemed, and had to do the foreclosure of right to redeem, and the quiet title action on others. I am also a real estate attorney who does the foreclosures and quiet title actions for my clients. If anyone has questions, but would rather do a little reading before asking, I have tried to break down the basics at
http://kimandbagwell.com/pitfalls-for-the-inexperi...
I only recently got started here at bigger pockets, so the best way to reach me is at my work email, which you can find on the website i just linked to.
Here lately, there are a lot of investors bidding way too high (presumably with other people's money). I see no way some of these bidders have any sort of exit strategy on some of the properties they're bidding on.
Final word of warning; Fulton County (where Atlanta is, mostly), is a bit of an anomaly in that the tax commissioner has transferred their tax liens on most properties to various sub-entities of Vesta holdings, Investa Holdings, investa services, etc... , and then the Sheriff's office is auctioning those liens off, rather than directly from the Tax office. While there is case law out there to question the validity of these transfers, the County still operates in this way, and it can complicate the foreclosure of right to redeem as well as the subsequent quiet title action.
Approximately how much would it cost in attorney fees to foreclose and possibly do a quite title action.
The Foreclosure of the Right to Redeem is not normally very expensive. We usually quote a flat fee around $1,200 plus costs (costs will vary, depending on how many parties need to be served, and also include the advertising costs). We include a title search in that fee as well. At the conclusion of the foreclosure, we include an affidavit of matters affecting title to real estate, which may be recorded in the chain of title to the property.
If someone wants us to pursue a quiet title, the costs vary. Assuming that we are not filing "against all the world," meaning that we are simply attempting to remove the title cloud created by the tax lien, we normally quote a flat fee of approximately $2k-$3k plus costs. If the Court requires the appointment of a special master, or if any other party challenges our petition, we convert that fee to a retainer, and then charge hourly. If we are filing against all the world, which normally includes all neighboring parties, a new survey, and a special master, we ask for a $3,000 retainer, and bill against that hourly. Depending on the case, we've had total bills on these hourly cases wind up as low as $3,000 or so, and also had some cases wind up north of $10k. It all depends on how many parties are involved, and how badly they want to challenge the case. Also keep in mind that the special master (normally a court-appointed lawyer who issues a report and recommendation to the judge) will also be charging an additional hourly fee, normally higher than ours.
Of course, pricing will be a little different depending on which county we're dealing with, how clear the title is, etc..., but that's a general overview.
That said, make sure your exit strategy includes enough of a financial cushion to absorb any of those costs, as well as a time cushion of at least 90 days for the foreclosure, and approximately 6-9 months for the quiet title.
@Sam
Thanks for the useful information. This helps me understand how much I need to save up for these expenses. Also to try and find alternative exit strategies
@Sundiata Jackson I'm interested in your progress. I am also looking to get in tax liens in Ga as well.
@Sam Bagwell Thank you for sharing the great information. Is there a difference in how delinquent taxes and tax liens are handled when the owner is deceased? I was searching for the owner of a vacant house and found out through a skip trace that she is deceased. It appears family of the deceased lives in CA (property in Fulton Co. GA) and has no idea their mother still owns the property.
My research shows Investa Services has the lien, but it has not been sold by the Sheriff to date. My plan was to contact the family, help them open probate (quite sure she died intestate), and buy the house from the administrator (minus liens of course) or pursue a short sale.
@Michael J Shabazz The short answer is no. The person handling the foreclosure of right to redeem (barment) as well as the quiet title action, would simply serve any heirs that can be located, and serve the "unfindable" ones via publication.
The problem you're up against, though, is Investa Services. I've warned people against Fulton County tax sales for years now. 1. They're arguably illegal, as they typically go through Investa Services, Investa Holdings, Vesta Services, or Vesta Holdings, rather than the Tax Commissioner. 2. The deed hasn't been sold, so you're a little premature on your concerns. 3. If there is a dispute over the amount of the tax lien, and therefore the entire tax sale, then having an intermediary like Investa Services causes nothing but headache. We've actually seen investa sell off liens that were later determined to be invalid, as the taxes were under appeal at the time Investa bought the lien, and everyone wound up paying way too much in legal fees to sort that one out. 4. Fulton County does not communicate well with its cities. We've seen Fulton County competing with Fairburn on its tax sales, which, by itself, isn't that complicated, except that it normally isn't Fulton County, but one of the "Vesta" companies. In short, if you're a newbie, or have limited risk tolerance, stay clear of Fulton. Investa (or its other alter-egos), is a complicating, and arguably illegal intermediary.
With regard to your strategy, if you can have the probate completed and buy your deed prior to a tax sale, and include a payoff of Investa as part of the closing, go for it. Nothing wrong with that. A short sale would be the same arrangement; you'd have to have an administrator or executor of the estate, and then negotiate reduced payoffs of Investa and any other lienholders prior to the sale. That would be more complicated, but theoretically possible. To justify that much work, though, it better be one hell of a deal!
@Sam Bagwell Sam I just put up a long post on how to buy tax deeds in Fulton County, including the role of Vesta in the process. It sounds like you have some concerns about some of the legal issues involved, which obviously I'm not qualified to comment on. Could you maybe share your thoughts on why Vesta and other tax lien investors muddy the waters?
https://www.biggerpockets.com/forums/20/topics/395837-how-to-buy-a-tax-deed-at-the-fulton-county-tax-sale-atlanta-ga
@Dan Mahoney Thanks for the shout-out! On the attorney side of things we've come across cases where Fulton County has sold a lien to Vesta (or Investa) while a tax appeal was pending (we were not handling the tax appeal). While the appeal was still pending, Vesta then conducted the tax sale, selling to Investa (or Vesta). So now there is a tax deed sale, while the tax appeal is pending. By the time the tax appeal has worked its way through the system, it is determined that Fulton County (the taxing authority) actually owes money back to the tax debtor, meaning that the initial lien should never have been filed, and is wrongful. At that point, however, Vesta, or Investa might be considered a bona fide purchaser after the fact of what they believed was a valid lien. During the quiet title action on the part of the subsequent purchaser, both sides bled way too much in attorneys fees though they did eventually resolve the matter. Basically, the County should never have sold a lien which was subject to appeal, the tax debtor should not have had to defend their interest in the property, since they were in the right on the underlying tax issue, and Vesta shouldn't have had to incur legal costs to fight for a lien which was issued based on an invalid tax deficiency. By outsourcing it's status as tax authority to Vesta, Fulton County endangers the purchasers of the deeds, as well as its tax-paying property owners by not accounting for potential challenges to the underlying property taxes. Additionally, Fulton has many underlying municipalities; Atlanta, Fairburn, Peachtree City, etc... We've come across cases in which there are competing tax liens (not deeds) between the County and a City, where the timeline of when the lien was filed, and when it was transferred to Vesta (or Investa) becomes crucial. The lagtime between these huge bureaucracies endangers the priority of many of the tax deeds they sell.
That being said, we have many clients who have had successful transactions in Fulton, but we don't recommend it as a sandbox for newbies to learn the ropes. If an investor has picked a solid enough deal, and has the funds to have a bit of a fight and incur some attorneys' fees, there can still be opportunities, if they know what you're doing.
Is it right that when I buy a tax lien certificate in GA I get a 20% return even if the person pays it the next day? As long as I dont pay to much of a premium I should be ok because if the person never redeems I can take posession of the property after 2 years.
@Account Closed What you are describing is correct for a Georgia tax deed, not for a tax lien. It is tax deeds that you are sold at the monthly auction on the courthouse steps of each county.
And your timeline is a little off. If the deed is not redeemed for a year after purchase, you have the option to file paperwork to bar the right of redemption, which is a 45-day process. So theoretically you could take possession after 1 year and 45 days, but you'd have to spend money to do it.
In the meantime, you don't control what happens to the property so chances are it will deteriorate (and/or be vandalized) during the year you are waiting.
With all that in mind you need to bid well below what the property is worth if you want to be confident of making a profit.