Advice on Florida Tax lien/Deed Auctions

6 Replies

Hey everyone, just FYI I have a long story, but I want to make sure I  understand the process before I go forward. I've been looking into Tax Liens and Deed Auctions. I've found a house on a major highway in my hometown that is been vacant for few years, just for curiosity i looked up to see if the taxes have been paid and what do know, the taxes have not been paid since 2013. So I called and spoke with the Tax Collector along with the Clerk of court to get more info. Anyways I found out the first Tax Lien Certificate from 2013 was held by the County because no one came to bid on it that year.  And that I could in fact buy their Cert. And then apply for the Tax Deed, which they will then hold a sheriff sale.  I was also informed Inorder to do that I would have to pay for the other years that the taxes have not been paid. Which totals a little over 3000. And of course pay for other fees the Clerk of Court request like paying to have it advertised in the paper for a month. All in all I would be looking at paying around $5000. When asked what happens at the Sale and how they determine the minimum bid I was told that basically all the fees I paid to have the process started would be the starting bid. If no one bids on the property then I would become owner after paying for the deed transfer and then recorded, basically more fees.LOL but if someone or more than one person bids on the property I would get back all that I paid for along with 1.5 interest in the amount.  Which isn't much but my thought is at least I would be getting my money back and maybe a little more. To me it seems like there's not much to lose if I decided to try my first tax lien/deed investing. The property appraisers office has the the property value listed at just under $20,000 but because the home was built in 1930's and might need some inside work, it might be less than that but the big advantages is that it's on a paved road right inside town and near commercial properties, heck even if I could make $5000 profit from the sale after I took possession, I would be tickled pink. That's saying if all this works out in the sale/funds of getting this all started.  So my question is, did the Clerk of Court explain everything correctly to me or am I missing a bigger picture and could lose some or all of my money.  TIA

They gave you the scoop. Keep in mind that if you end up with the property, you might need to do a quiet title action which could cost up to 2K. Also, you then, as owner, become liable for any future taxes when you own it, etc. There MUST be a reason nobody bid on the property IMO.  If you cannot get rid of it....the expenses keep piling up slowly but surely.

That's funny. I found a house with very similar circumstances where I'm moving. It's an abandoned house surrounded by $400- $500k houses in a beautiful part of town. The neighbor said it's been abandoned for over 10 years and it might be a tear down. I agree. It's in pretty bad shape. I was thinking about looking into the tax lien situation. After 10 years it would probably be pretty ugly. But with all said and done it looks like there could be a huge opportunity. I'm just nervous to have to put in all the work. You've laid out a nice path to follow though. Thank you.

@Nikki Garner   Yes, this is how it works in FL.  If you want the property for yourself, that's one thing.  Here our tax deed auctions are competitive and prices get bid up.....so if no one else is willing to bid the minimum bid, which is what you Already have into it, then I don't see it as a good deal....but maybe your auction competition is different.

Originally posted by @Nikki Garner :

Hey everyone, just FYI I have a long story, but I want to make sure I  understand the process before I go forward. I've been looking into Tax Liens and Deed Auctions. I've found a house on a major highway in my hometown that is been vacant for few years, just for curiosity i looked up to see if the taxes have been paid and what do know, the taxes have not been paid since 2013. So I called and spoke with the Tax Collector along with the Clerk of court to get more info. Anyways I found out the first Tax Lien Certificate from 2013 was held by the County because no one came to bid on it that year.  And that I could in fact buy their Cert. And then apply for the Tax Deed, which they will then hold a sheriff sale.  I was also informed Inorder to do that I would have to pay for the other years that the taxes have not been paid. Which totals a little over 3000. And of course pay for other fees the Clerk of Court request like paying to have it advertised in the paper for a month. All in all I would be looking at paying around $5000. When asked what happens at the Sale and how they determine the minimum bid I was told that basically all the fees I paid to have the process started would be the starting bid. If no one bids on the property then I would become owner after paying for the deed transfer and then recorded, basically more fees.LOL but if someone or more than one person bids on the property I would get back all that I paid for along with 1.5 interest in the amount.  Which isn't much but my thought is at least I would be getting my money back and maybe a little more. To me it seems like there's not much to lose if I decided to try my first tax lien/deed investing. The property appraisers office has the the property value listed at just under $20,000 but because the home was built in 1930's and might need some inside work, it might be less than that but the big advantages is that it's on a paved road right inside town and near commercial properties, heck even if I could make $5000 profit from the sale after I took possession, I would be tickled pink. That's saying if all this works out in the sale/funds of getting this all started.  So my question is, did the Clerk of Court explain everything correctly to me or am I missing a bigger picture and could lose some or all of my money.  TIA

How long did they state it would take for the property to goto Tax-Deed auction? 

https://www.alta.org/education/online-courses.cfm (great place to get a basic idea of how clouded the title is before you bid on your tax liens).


There's 1 situation that would cause you to lose your money in a tax-deed auction (this is alteast what a 6 year UM real estate lawyer told me - I've never heard of it happening from any other lawyer).

If the owners declare bankruptcy the day before the start date of the tax-deed sale you would have to goto court and ask a judge to refund you back your $$$.

Before you start make sure the property title is somewhat clean with a limited amount of liens.


1. Municipality liens (you can order the lien search for $250 or you can go with a title company  - FYI Tax-Deeds in MDC have their title reports in the auction listing - so you can view all the liens/mortgages on the property at that time).

You can search the majority of the lien records online for free using the Clerk of Court - its a pain sometimes due to the glitchy nature of the search engine so you have to spend around 1-3 hours looking through each person who was originally on the title and run their name through code enforcement and liens (you can input the property address but sometimes the liens don't show up so I usually run through all the previous owners.

FPL -  isn't really a lien but they sometimes "charge" a deposit for tenants who never their previous bills - Confirm how much your deposit will be using the "starting new service" tool and select yourself as a renter.

Water and Sewer (you'll have to come up with a situation to "trick" them into stating if there is any un-paid balance on the property - "Hey I just bought this property and I wanted to setup my water" or "Hey I'm a current renter of this property and I would like to setup water" - they may or may not disclose if there is a un-paid balance on the property just depends who you get (you can alternativly file the paperwork for a lien search but it makes no sense to do so if you're going to pay for a title search). 


2. Federal IRS Tax Lien - The IRS has a lien department you'll have to call them during the week and ask them to see if the property you're looking at has any liens on it. Try to get a fax sent to you confirming there are no liens (not fully necessary but I like to have this just in case... kinda over-kill).

 
There's another risk for the quiet title process - If there are a bunch of quit claim deeds on the property anyone in the chain of the title can challenge your claim in court - some state its best to do it before the deadline to file the suit others just file it as soon as they get the property - I'd say file it 6 months before you intend to sell your property.

@Wayne who do you have file your quiet title suits?
  

Thanks yall, for your replies and advice.

@Wayne Brooks my county is very small from what I've seen alot of properties that have bids on them are vacant lands, this area has a lot of hunting/farming potential either they buy for their farming or to have property to lease/hunt during hunting season. Another thing I noticed when reading the FLA Staute on tax and deed liens is if the property is homestead then the min. Bid will need to be 1/2 or 1/4 (cant remember which one was the correct fraction)of the property value along with the back taxes and fees. The good news on this property is it's not homesteaded.  

The property was bought in 1989, and the property owner has a bad habit of not paying the property taxes, they live out of state, there was twice when a cert. Holder tried to do a tax deed but the owner redeemed the property that was years ago, so it been 4 years since he has not paid the taxes, 2 of the cert. Holders is the county one is a company and the 4th year is coming up for auction at the end of the month. My guess why there has been no bids is because of owner redeeming the property twice, and possibly bidders are a little hesitant.  But that's just a guess. (That's only if they are interested in owning the property). I'm still doing my research.  But thanks for all of the advice and what to look for.  :)