Florida Tax Certificate / Tax Deed Questions

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Florida Tax Certificate / Tax Deed Questions

Bastian P.
Involved In Real Estate · Palm Bay, FL · Member since 2011 · 10 posts · 2 votes

I am living in Florida (Brevard county) and I recently came across tax certificate auctions. I was searching for tax certificates and some are as low as 40 USD and some go up to 14000 USD in Brevard. I hope this here is the right place to post some questions about the tax deed process and would appreciate your feedback.

The tax collector's website says: Certificate holders who apply for a tax deed must pay the Tax Collector the amounts required for redemption of all other outstanding certificates, plus interest; any omitted taxes, plus interest; any delinquent taxes, plus interest; and current taxes, if due; and other fees as mandated by state law (including a title search fee and a Tax Collector fee)

1) Lets assume I have a tax certificate and now want to get a tax deed for that property. If I understand this right, I first would have to buy any other outstanding tax certificates for that property, plus interest, before the process can start?

2) From your experience, how much are the fees that come along with a tax deed sale? A rough ballpark would help me.

3) I assume these fees would not be shared with the other tax certificate holders, i.e. the one who actually applies for the tax deed is the 'lucky one' who has to pay all the feeds. Yes? Or would the fees be covered / reimbursed from the sale price of the property?

4) I found tax certificates as low as 40 USD. Why could it make sense to buy such small amount tax certificates at all? Because the costs to get a tax deed would most likely be much higher. Maybe I am missing something.

Again, your feedback is much appreciated.

1Reply
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Most Popular Reply

Jessie Griffin
Rental Property Investor · Saint Petersburg, FL · Member since 2015 · 33 posts · 18 votes
9y

Howdy @Bastian P.

These are all great questions and you are thinking in the right mindset. Please see my responses below in italics:

1) Lets assume I have a tax certificate and now want to get a tax deed for that property. If I understand this right, I first would have to buy any other outstanding tax certificates for that property, plus interest, before the process can start?

Yes, exactly. You will never want to go through this process as it's ridiculously time consuming (6-9 months before the auction actually takes place from when the deed application was filed) and will cost you more than your investment is worth. For example, in Pinellas County, when the clerk approves your application, you have less than 2 days to respond and pay any remaining recording fees which have to be done at the courthouse. If not done promptly, you risk your application being denied and the county keeps all your money.

2) From your experience, how much are the fees that come along with a tax deed sale? A rough ballpark would help me.

A good estimate is roughly $1,000 in addition to the past years taxes plus interest. There are recording fees, application fees, stamp fees, advertising fees.... you get the picture. I actually purchase expiring tax certificates from people who don't have the time, money, or will power to file for the tax deed.

3) I assume these fees would not be shared with the other tax certificate holders, i.e. the one who actually applies for the tax deed is the 'lucky one' who has to pay all the feeds. Yes? Or would the fees be covered / reimbursed from the sale price of the property?

By "shared" you mean split between the tax cert holders, correct? Whoever files for the tax deed has to pay 100% of the fees. The amount of the fees are public record and can be found in the tax deed court case documents. The good thing is, you will be reimbursed every penny you've paid once the auction is held for the deed (assuming someone bids on it). The minimum bid on a tax deed covers all your expenses.

4) I found tax certificates as low as 40 USD. Why could it make sense to buy such small amount tax certificates at all? Because the costs to get a tax deed would most likely be much higher. Maybe I am missing something. 

I buy tax certificates and tax deeds and can tell you $40 liens are usually the sliver of land next to a power plant that even the alligators won't cross. It is very appealing, but you are better to bid on the $500+ certificates. The Brevard site (and many others in Florida) has a great search feature where you can pull a report on the certificates by how many previous years are still owed, if other certificates have previously been redeemed, and even what type of property (SFH, land, mobile, etc.). You can play around with this using common sense to determine which liens have the best chance of being redeemed. The $40 certificates are bought by people who have not educated themselves on the full process of tax lien investing unlike yourself. This is why so many certificates expire every year, because it is simply not worth applying for the deed.

Some notes to take away:

  • Certificates less than $500 are usually vacant land. These can be good because there is less competition, but most likely no mortgage company to pay the taxes before they foreclose on the property. 
  • I recommend you find the Brevard Tax Deed Court document search online and look up a few from the most recent auctions. The case files will most likely show you a list of fees and other goodies. Best advice is to not buy certificates that may not be redeemed by using the Report/Search feature on the BidBrevard website. 
  • If you end up buying a certificate that does not redeem after 2 years, you can still hold it for another 5 before it expires. The interest will keep accumulating the same and hopefully someone after you will file for the deed and pay off your balance. Many times I get a check in the mail from a certificate being paid and it's from another investor (that bought a different year's certificate) that filed for the deed and had to pay my balance off.
  • A neat bonus that usually isn't promoted is that no matter how soon a certificate is redeemed, the investor will get a minimum 5% return. Meaning if you buy a certificate in June and the homeowner pays their taxes in July, you would actually be paid 5% return on your investment, instead of the 1.5% (18%/12 months). My theory is that this is why all the hedge funds bid 0.25% on all the single family homes in hopes they will be redeemed within 5 months to actually get a 5% return.
  • You can see an example from what I mentioned above by looking at the Brevard 2014 Tax Year certificate #8439 (account # 2812693). On 10/08/15, my company, Blue Coast Property Group, LLC bought an over the counter certificate (leftovers that no one bid on at the June auction and were assigned to the county for a full 18% interest to whoever wants it) for $250.63. The interest rate was 18%. The taxes were paid on 12/19/15 and we were sent a check for $263.16, yielding a 5% ROI for just 3 months. The annual yield on this technically ended up being 20% (2% more than the guaranteed rate) which is why tax liens are flippin awesome!

Hope this helps answer your questions. Cheers and happy bidding next month!

5Reply
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  • Wayne Brooks
    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    9y

    You figured it out......yes, you would have to spend multiples of your original "investment" in hopes that the property brings a high enough bid at the tax deed auction to cover all your extra outlay, to earn your 2-5% on just your initial outlay.

    0Reply
  • Roman M.
    Investor · Miami Beach, FL · Member since 2016 · 486 posts · 216 votes
    9y

    from my experience it makes no sense to buy any tax lien certificates that are less then $1,000. You have to redeem everyone else and pay $375 for title search plus clerk fee and then later sheriff fees and advertisement fee. 

    0Reply
  • Jessie Griffin
    Rental Property Investor · Saint Petersburg, FL · Member since 2015 · 33 posts · 18 votes
    9y

    Howdy @Bastian P.

    These are all great questions and you are thinking in the right mindset. Please see my responses below in italics:

    1) Lets assume I have a tax certificate and now want to get a tax deed for that property. If I understand this right, I first would have to buy any other outstanding tax certificates for that property, plus interest, before the process can start?

    Yes, exactly. You will never want to go through this process as it's ridiculously time consuming (6-9 months before the auction actually takes place from when the deed application was filed) and will cost you more than your investment is worth. For example, in Pinellas County, when the clerk approves your application, you have less than 2 days to respond and pay any remaining recording fees which have to be done at the courthouse. If not done promptly, you risk your application being denied and the county keeps all your money.

    2) From your experience, how much are the fees that come along with a tax deed sale? A rough ballpark would help me.

    A good estimate is roughly $1,000 in addition to the past years taxes plus interest. There are recording fees, application fees, stamp fees, advertising fees.... you get the picture. I actually purchase expiring tax certificates from people who don't have the time, money, or will power to file for the tax deed.

    3) I assume these fees would not be shared with the other tax certificate holders, i.e. the one who actually applies for the tax deed is the 'lucky one' who has to pay all the feeds. Yes? Or would the fees be covered / reimbursed from the sale price of the property?

    By "shared" you mean split between the tax cert holders, correct? Whoever files for the tax deed has to pay 100% of the fees. The amount of the fees are public record and can be found in the tax deed court case documents. The good thing is, you will be reimbursed every penny you've paid once the auction is held for the deed (assuming someone bids on it). The minimum bid on a tax deed covers all your expenses.

    4) I found tax certificates as low as 40 USD. Why could it make sense to buy such small amount tax certificates at all? Because the costs to get a tax deed would most likely be much higher. Maybe I am missing something. 

    I buy tax certificates and tax deeds and can tell you $40 liens are usually the sliver of land next to a power plant that even the alligators won't cross. It is very appealing, but you are better to bid on the $500+ certificates. The Brevard site (and many others in Florida) has a great search feature where you can pull a report on the certificates by how many previous years are still owed, if other certificates have previously been redeemed, and even what type of property (SFH, land, mobile, etc.). You can play around with this using common sense to determine which liens have the best chance of being redeemed. The $40 certificates are bought by people who have not educated themselves on the full process of tax lien investing unlike yourself. This is why so many certificates expire every year, because it is simply not worth applying for the deed.

    Some notes to take away:

    • Certificates less than $500 are usually vacant land. These can be good because there is less competition, but most likely no mortgage company to pay the taxes before they foreclose on the property. 
    • I recommend you find the Brevard Tax Deed Court document search online and look up a few from the most recent auctions. The case files will most likely show you a list of fees and other goodies. Best advice is to not buy certificates that may not be redeemed by using the Report/Search feature on the BidBrevard website. 
    • If you end up buying a certificate that does not redeem after 2 years, you can still hold it for another 5 before it expires. The interest will keep accumulating the same and hopefully someone after you will file for the deed and pay off your balance. Many times I get a check in the mail from a certificate being paid and it's from another investor (that bought a different year's certificate) that filed for the deed and had to pay my balance off.
    • A neat bonus that usually isn't promoted is that no matter how soon a certificate is redeemed, the investor will get a minimum 5% return. Meaning if you buy a certificate in June and the homeowner pays their taxes in July, you would actually be paid 5% return on your investment, instead of the 1.5% (18%/12 months). My theory is that this is why all the hedge funds bid 0.25% on all the single family homes in hopes they will be redeemed within 5 months to actually get a 5% return.
    • You can see an example from what I mentioned above by looking at the Brevard 2014 Tax Year certificate #8439 (account # 2812693). On 10/08/15, my company, Blue Coast Property Group, LLC bought an over the counter certificate (leftovers that no one bid on at the June auction and were assigned to the county for a full 18% interest to whoever wants it) for $250.63. The interest rate was 18%. The taxes were paid on 12/19/15 and we were sent a check for $263.16, yielding a 5% ROI for just 3 months. The annual yield on this technically ended up being 20% (2% more than the guaranteed rate) which is why tax liens are flippin awesome!

    Hope this helps answer your questions. Cheers and happy bidding next month!

    5Reply
  • Bastian P.
    OP
    Involved In Real Estate · Palm Bay, FL · Member since 2011 · 10 posts · 2 votes
    9y

    Thanks to all for the responses.

    Thank you Jessie for the detailed feedback and explanations!! This helps me very much!

    1Reply
  • Sophie Wang
    Investor · Denver, CO · Member since 2015 · 22 posts · 6 votes
    8y
    Hey Jessie, 

    Thanks for sharing this information. I have a couple more question, wonder if you can help me out here? 

    1. Does an investor get priority right to purchase subsequent years of tax liens after he/she made the initial purchase? Will the interest rate for sebsequent years 18% or whatever rate the investor bid for the first year's lien?

    2. Does florida allow multiple liens on one property? For example, there is a property, investor A purchased tax liens on it for year #1, but did not want to purchase the lien for year #2, in this case does the county bundle the lien plus interest for year #1 with the amount for year #2 and offer it for bidding again in year #2 and be purchased by investor B, and investor A got redeemed, or does the county allows A and B hold liens on the same property for different years?

    3. If a property has liens purchased by investor A and B for different years, do A and B have the same right to force foreclose when the 2 year redemption period is met? Either of them can pay off the other and foreclose? Can the lien holder bid at the foreclosure auction too if he or she wants the property?

    Thanks a lot! I know this is a lot of questions, just want to be prepared before going into bidding, especially I am not in Florida...

    Sophie




    Originally posted by @Jessie Griffin:

    Howdy @Bastian P.

    These are all great questions and you are thinking in the right mindset. Please see my responses below in italics:

    1) Lets assume I have a tax certificate and now want to get a tax deed for that property. If I understand this right, I first would have to buy any other outstanding tax certificates for that property, plus interest, before the process can start?

    Yes, exactly. You will never want to go through this process as it's ridiculously time consuming (6-9 months before the auction actually takes place from when the deed application was filed) and will cost you more than your investment is worth. For example, in Pinellas County, when the clerk approves your application, you have less than 2 days to respond and pay any remaining recording fees which have to be done at the courthouse. If not done promptly, you risk your application being denied and the county keeps all your money.

    2) From your experience, how much are the fees that come along with a tax deed sale? A rough ballpark would help me.

    A good estimate is roughly $1,000 in addition to the past years taxes plus interest. There are recording fees, application fees, stamp fees, advertising fees.... you get the picture. I actually purchase expiring tax certificates from people who don't have the time, money, or will power to file for the tax deed.

    3) I assume these fees would not be shared with the other tax certificate holders, i.e. the one who actually applies for the tax deed is the 'lucky one' who has to pay all the feeds. Yes? Or would the fees be covered / reimbursed from the sale price of the property?

    By "shared" you mean split between the tax cert holders, correct? Whoever files for the tax deed has to pay 100% of the fees. The amount of the fees are public record and can be found in the tax deed court case documents. The good thing is, you will be reimbursed every penny you've paid once the auction is held for the deed (assuming someone bids on it). The minimum bid on a tax deed covers all your expenses.

    4) I found tax certificates as low as 40 USD. Why could it make sense to buy such small amount tax certificates at all? Because the costs to get a tax deed would most likely be much higher. Maybe I am missing something. 

    I buy tax certificates and tax deeds and can tell you $40 liens are usually the sliver of land next to a power plant that even the alligators won't cross. It is very appealing, but you are better to bid on the $500+ certificates. The Brevard site (and many others in Florida) has a great search feature where you can pull a report on the certificates by how many previous years are still owed, if other certificates have previously been redeemed, and even what type of property (SFH, land, mobile, etc.). You can play around with this using common sense to determine which liens have the best chance of being redeemed. The $40 certificates are bought by people who have not educated themselves on the full process of tax lien investing unlike yourself. This is why so many certificates expire every year, because it is simply not worth applying for the deed.

    Some notes to take away:

    • Certificates less than $500 are usually vacant land. These can be good because there is less competition, but most likely no mortgage company to pay the taxes before they foreclose on the property. 
    • I recommend you find the Brevard Tax Deed Court document search online and look up a few from the most recent auctions. The case files will most likely show you a list of fees and other goodies. Best advice is to not buy certificates that may not be redeemed by using the Report/Search feature on the BidBrevard website. 
    • If you end up buying a certificate that does not redeem after 2 years, you can still hold it for another 5 before it expires. The interest will keep accumulating the same and hopefully someone after you will file for the deed and pay off your balance. Many times I get a check in the mail from a certificate being paid and it's from another investor (that bought a different year's certificate) that filed for the deed and had to pay my balance off.
    • A neat bonus that usually isn't promoted is that no matter how soon a certificate is redeemed, the investor will get a minimum 5% return. Meaning if you buy a certificate in June and the homeowner pays their taxes in July, you would actually be paid 5% return on your investment, instead of the 1.5% (18%/12 months). My theory is that this is why all the hedge funds bid 0.25% on all the single family homes in hopes they will be redeemed within 5 months to actually get a 5% return.
    • You can see an example from what I mentioned above by looking at the Brevard 2014 Tax Year certificate #8439 (account # 2812693). On 10/08/15, my company, Blue Coast Property Group, LLC bought an over the counter certificate (leftovers that no one bid on at the June auction and were assigned to the county for a full 18% interest to whoever wants it) for $250.63. The interest rate was 18%. The taxes were paid on 12/19/15 and we were sent a check for $263.16, yielding a 5% ROI for just 3 months. The annual yield on this technically ended up being 20% (2% more than the guaranteed rate) which is why tax liens are flippin awesome!

    Hope this helps answer your questions. Cheers and happy bidding next month!

    2Reply
  • Jessie Griffin
    Rental Property Investor · Saint Petersburg, FL · Member since 2015 · 33 posts · 18 votes
    8y

    Howdy @Sophie Wang,

    These are all great questions! Let me first preface saying that all the information provided in my comments below are only for Florida tax certificates/liens as every state is different. I assume you will be bidding on Florida certificates, but saw you are in Colorado so just making sure. Please see my comments below your questions and let me know what else I can help you with.

    1. Does an investor get priority right to purchase subsequent years of tax liens after he/she made the initial purchase? Will the interest rate for sebsequent years 18% or whatever rate the investor bid for the first year's lien?

    Each year is treated as a new certificate so to answer your first question, no; you can buy 2017's certificate, but next year anyone can bid for 2018. The subsequent taxes (any taxed unpaid after your purchase) are free game and will not affect your certificate - unless of course they file for a tax deed after two years and pay your certificate off - yay! 

    2. Does florida allow multiple liens on one property? For example, there is a property, investor A purchased tax liens on it for year #1, but did not want to purchase the lien for year #2, in this case does the county bundle the lien plus interest for year #1 with the amount for year #2 and offer it for bidding again in year #2 and be purchased by investor B, and investor A got redeemed, or does the county allows A and B hold liens on the same property for different years?

    The later situation you stated is correct. The county allows both investor A and B to hold separate liens (certificates) on the same property for different years. Investor A will keep collecting the original said interest rate until the certificate is paid. Investor B will collect their interest rate (whatever they bid) until their certificate is paid. 

    3. If a property has liens purchased by investor A and B for different years, do A and B have the same right to force foreclose when the 2 year redemption period is met? Either of them can pay off the other and foreclose? Can the lien holder bid at the foreclosure auction too if he or she wants the property?

    Yes, investors A and B both have a right to apply for the tax deed (which will initiate the auction to foreclose on the property as you stated). The difference is if Investor A purchased the tax year ahead of Investor B, then Investor A can apply for the tax deed one year sooner. Investor B has to wait their full two years from the "purchase date" of the certificate as well. Either of them can pay off the other and foreclose. Now, Investor A may not want to apply for the tax deed right at two years and they have the right to wait up to 7 years from purchase date to apply for the tax deed. During that time, any of the other investors after that can apply and essential will pay off Investor A's certificate. During that time, Investor A will keep the same interest rate each year. Interesting side note, if you research any properties that have expired tax certificates, where the lien holder did not apply for the tax deed within 7 years, this is a HUGE red flag that the property is not worth it. 

    For your last question, yes, anyone can bid on the property during the auction. The Investor who applied for the tax deed basically starts the auction at the minimum price since they have paid for all the past due taxes from other years, plus all the fees. If no one bids against them, they automatically get the property. This RARELY happens unless it's a useless piece of land. A good example would be to go back and look at the Pinellas County tax deed auctions for any land in St Petersburg on the South Side. Another example is Hernando County, where Brooksville and Weeki Wachi have a bunch of developers that go bankrupt and land is not bid on since it's not worth the starting bid. If you do want to bid on the property once it goes up for auction, this is a separate process and website from the annual tax certificate sale. You will need to sign up for an account and make a minimum deposit before bidding. 

    Hope this helps. Let me know if you have any further questions. Cheers.

    4Reply
  • Zhishan Wang
    Denver, CO · Member since 2014 · 2 posts · 0 votes
    8y
    Originally posted by @Jessie Griffin:

    Howdy @Sophie Wang,

    These are all great questions! Let me first preface saying that all the information provided in my comments below are only for Florida tax certificates/liens as every state is different. I assume you will be bidding on Florida certificates, but saw you are in Colorado so just making sure. Please see my comments below your questions and let me know what else I can help you with.

    1. Does an investor get priority right to purchase subsequent years of tax liens after he/she made the initial purchase? Will the interest rate for sebsequent years 18% or whatever rate the investor bid for the first year's lien?

    Each year is treated as a new certificate so to answer your first question, no; you can buy 2017's certificate, but next year anyone can bid for 2018. The subsequent taxes (any taxed unpaid after your purchase) are free game and will not affect your certificate - unless of course they file for a tax deed after two years and pay your certificate off - yay! 

    2. Does florida allow multiple liens on one property? For example, there is a property, investor A purchased tax liens on it for year #1, but did not want to purchase the lien for year #2, in this case does the county bundle the lien plus interest for year #1 with the amount for year #2 and offer it for bidding again in year #2 and be purchased by investor B, and investor A got redeemed, or does the county allows A and B hold liens on the same property for different years?

    The later situation you stated is correct. The county allows both investor A and B to hold separate liens (certificates) on the same property for different years. Investor A will keep collecting the original said interest rate until the certificate is paid. Investor B will collect their interest rate (whatever they bid) until their certificate is paid. 

    3. If a property has liens purchased by investor A and B for different years, do A and B have the same right to force foreclose when the 2 year redemption period is met? Either of them can pay off the other and foreclose? Can the lien holder bid at the foreclosure auction too if he or she wants the property?

    Yes, investors A and B both have a right to apply for the tax deed (which will initiate the auction to foreclose on the property as you stated). The difference is if Investor A purchased the tax year ahead of Investor B, then Investor A can apply for the tax deed one year sooner. Investor B has to wait their full two years from the "purchase date" of the certificate as well. Either of them can pay off the other and foreclose. Now, Investor A may not want to apply for the tax deed right at two years and they have the right to wait up to 7 years from purchase date to apply for the tax deed. During that time, any of the other investors after that can apply and essential will pay off Investor A's certificate. During that time, Investor A will keep the same interest rate each year. Interesting side note, if you research any properties that have expired tax certificates, where the lien holder did not apply for the tax deed within 7 years, this is a HUGE red flag that the property is not worth it. 

    For your last question, yes, anyone can bid on the property during the auction. The Investor who applied for the tax deed basically starts the auction at the minimum price since they have paid for all the past due taxes from other years, plus all the fees. If no one bids against them, they automatically get the property. This RARELY happens unless it's a useless piece of land. A good example would be to go back and look at the Pinellas County tax deed auctions for any land in St Petersburg on the South Side. Another example is Hernando County, where Brooksville and Weeki Wachi have a bunch of developers that go bankrupt and land is not bid on since it's not worth the starting bid. If you do want to bid on the property once it goes up for auction, this is a separate process and website from the annual tax certificate sale. You will need to sign up for an account and make a minimum deposit before bidding. 

    Hope this helps. Let me know if you have any further questions. Cheers.

     Hey Jesse thanks so much for the detailed answers and the tips! Yes I am in Colorado but Colorado's rules are not very investor friendly (bid on premium, and the premium is not refundable and does not bear interest) so I start to look into other States that have better rules and higher interest rate. Florida is definitely one of the best but a lot to learn about the rules too :)

    0Reply
  • Quinn Skierski
    Investor · Live Oak, FL · Member since 2015 · 3 posts · 0 votes
    8y

    Good morning @Jessie Griffin!

    I bought two 2013 county held certificates this year and applied for the tax deed with in a few days. Is this something you have done? I was interested in owning the properties that I bought certificates on was how this started but now I am obsessed with perfecting this method. 

    Thanks in advance for your response. You are a wealth of knowledge in this area.

    Quinn

    0Reply
  • Jessie Griffin
    Rental Property Investor · Saint Petersburg, FL · Member since 2015 · 33 posts · 18 votes
    8y

    Howdy Quinn - I assume this may be your first purchase, and if so, Congrats on that end! Liens are super exciting. I personally have not done this, but it is a great niche strategy. The only problem is if it goes to auction and someone else is willing to pay more for the property then you've done all the hard work. The tax deed sale is fair game so if the starting bid is $2,500 and someone bids $2,600 they will get the property unless you bid more and are the highest bidder of course. You would just pay the difference between the starting price and your max bid since you've already paid all of the fees and other liens off (included in the starting bid). Are you familiar with the tax deed sales? Let me know if you have questions about this process. 

    One thing to note, watch your mailbox carefully. Usually when the county sends you something, you'll have 1-3 days to respond. If you miss this window it can possibly forfeits your fees paid and/or sends your application to the back of the line if you want to re-apply. Usually the county will send you a bill for all the advertising, fees, etc. that needs to be paid pronto in order to move forward. I would love to see what properties you purchased the liens on if you'd like to private message me with the county and addresses?

    0Reply
  • Shawn McKechnie
    Member since 2018 · 3 posts · 2 votes
    8y

    @Jessie Griffin, my son and I just came across this posting.  We are very interested in investing in Tax Deeds.  As newbies, we have a few questions as we have been reading a lot about this, and there are an abundance of Buyer Beware articles that cover this topic, and we don't want to lose our shirts.

    1. Do you perform title searches on properties you are looking to bid on at tax deed auctions? If so, what type do you ask for and what does this typically cost you?

    2. Have you come across a property that you have won the bid on, to only find out their are other liens on it such as code enforcement, hospitals, utilities, etc.?

    3. Have you ever won a property, and used either of these methods to be able to sell it quickly? If so, which has been the better approach for you?

    - Hold the property for 4 years to remove any title issues

    - File a quiet title suit with an attorney

    - Buy a special title insurance policy

    Your time and advise are greatly appreciated.

    2Reply
  • Alexis Monroe
    Member since 2019 · 45 posts · 19 votes
    7y

    @Shawn McKehnie

    I have been studying tax deeds for about a year now. I just flipped my first tax deed a few weeks ago!! I purchased vacant land for $2,300 and sold it for $12,500 4 months later. I'm also a realtor and law school student in the Tampa Area.  I had ALL of your same questions when I first started. 

    1.  In Florida, A title search is required before the properties can go into a tax deed auction.  You can also search the title records in your county's public records website. You will have to look up all mortgages purchased under the owner of the properties' name. You can also run a search for municipal codes. There are ways to obtain title information FOR FREE. However, since this was my first deed, I went ahead and purchased a title from deeds.com just to be 100% sure there weren't any government liens that I was missing. (County and govt liens only survive the sale). Title companies typically do not rely on the county's version of the title search because they may not property notify all of the interested parties. 

    2. Hospitals and utility liens do not exist after tax deed. The only liens that continue through the sale are government, county and sometimes HOA. (which means you will be responsible for) Most times, these county liens can be negotiated to a lower rate since you are the new tax deed purchaser. I don't see how an investor who does their due diligence can accidentally purchase a property with a government lien on it because in order for the lien to be official, the lien will need to be recorded on public record. IF the lien is not recorded in public record, then it does not exist. you must read public records for county liens and if your not comfortable googling public information, then purchase a title search. A title search tells you every person who currently has interest to that property and any persons that ever previously had interest.

    3. When I initially purchased the property, I was planning to spend an additional $2,000 on getting a quiet title action. However, I was able to find a title company who was wiling to ensure my property because they were familiar with tax deeds and it was purchased from the bank. The title company explained that because the bank allowed the property to go into foreclosure, the title would be easier to insure. So, I got lucky with beating the 4 years that title companies are recommended to wait before insuring.  In the future, I plan to either use cleartosell company or a quiet title action to insure the property before selling it :)

    Making sure your title is clear can be "complicated" because you basically have to do the job of the attorney yourself BEFORE you purchase the property so that you know if you can actually win the quiet title action or not. It just takes diligence and lots of reading to details. 

    I hope this helps!!

    2Reply
  • Jamie Psmith
    Member since 2019 · 25 posts · 0 votes
    6y

    @Alexis Monroe  Hi. Great information! I'm looking at buying a tax deed being sold a county website in Florida and I was wondering if the fact the owner filed bankruptcy before the tax deed sale will have any effect on the sale or the money I will have to pay. Also, do you know if there's a way to look up IRS liens online? Thanks!

    0Reply
  • Mike S.
    Investor · Broward County, FL · Member since 2018 · 1k+ posts · 938 votes
    6y

    @Jamie Psmith

    I believe the bankruptcy filing will stay the tax sale. The property will be removed from the auction and will possibly be relisted after the end of the foreclosure is closed.

    1Reply
  • Jamie Psmith
    Member since 2019 · 25 posts · 0 votes
    6y

    Thank you! 

    0Reply
  • Mike S.
    Investor · Broward County, FL · Member since 2018 · 1k+ posts · 938 votes
    6y

    By the way, I was recently notified that the owner of a property I have a tax certificate on, has just filed for chapter 7 bankruptcy. I have never dealt with that situation before, and the research I have done is conflicting.

    Could someone confirm or elaborate on the following for Florida:

    - a chapter 7 should not extinguish the tax certificate lien on the property. In general this secure debt is not dischargeable, but even if it extraordinarily was, the lien would stay with the property, not the owner.

    - as a creditor owning a tax certificate and listed in the creditor list, in a chapter 7 there is very rarely the need to file a proof of claim, and as such no attorney would need to be hired by me in this case. I should just keep on eye on the notices and wait for decision of the bankruptcy court.

    - the 7 years life of the tax certificate would be extended by the duration of the chapter 7 proceeding.

    - the accrual of interest will stop during the proceeding, but resume at the end.

    0Reply
  • Mike S.
    Investor · Broward County, FL · Member since 2018 · 1k+ posts · 938 votes
    6y
    Originally posted by @Jamie Psmith:

    Also, do you know if there's a way to look up IRS liens online?

    The lien will be recorded in the county where the property is located. You should locate it the same way you locate other note or lien on any property. Most of the county public records in Florida are accessible online.

    0Reply
  • Luke Rainone
    Specialist · Vero Beach, FL · Member since 2017 · 44 posts · 12 votes
    6y

    @Mike S. Regarding your questions about the Chapter 7 bankruptcy. You are correct on all accounts. The lien will not dissappear, it will outlive the escheatment date (only until the following escheatment date once the bankruptcy is resolved though). For example it the bankruptcy extends the life by 2 years, in June of the following year, all certs 7 years or older will escheat at the same time.

    1Reply
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