Florida Tax Lien Question

4 Replies

I've been exploring tax liens as I work my way through the various avenues of real estate investing. Something that's intrigued me so far has been the county owned tax liens in Florida.

I've noticed a lot of the county owned liens have tax certificates that have been held over two years, up to 5-6 years in some cases. These properties have new liens up for sale but I'm hesitant to buy any because I'm not sure why the certificate holders haven't started the foreclosure process even though they are years past the required redemption period (2 years in Florida).

What would cause a certificate holder to not start the foreclosure process or are these instances where they have started the process and they've just dragged out for a few years?

What would be your risk exposure if your purchased the most recent certificate from the county?

Thanks y'all!

Some certificate holders just hope to collect the minuscule interest rates (minimum 5% total regardless of how many years), or some may have realized the property isn't worth the total of their certificate, plus all the other outstanding certificates which they would have to pay off to send to auction.  Once you pay off all the other certificates, it generally only takes a few months to get to auction, where the certificate holders have No advantage in the bidding.  Some don't realize when they buy a certificate they may have to put out thousands of dollars to collect their $131 in interest.

Once the order has been made to start the foreclosue (tax deed sale) then it is set and what every property that does not sell goes into Lands Available where you can buy the property directly from the county. Whenever you buy these properties they may have other liens on them which you have to take care of. You can hire an attorney to do a 'quiet title' where they contact all the lien holders to negotiate a deal with them to clear the title. 

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@David What I have found out in the course of the tax lien world with Florida is that many times a person who holds the older lien will wait to see if any of the other lien holders, providing that they are past the 2 year redemption period, will go forward with the foreclosure instead.  The main reason I find is that the older lien holders won't have the cash to complete the process because of the additional funds required.  If the oldest lien holder does not foreclose on the property by applying for the tax deed then their lien expires.  It happens and it's not something anyone would like to have happen but usually from the lack of funds it does happen.