Anyone have some time to help me with Tax Liens?

Question

I haven’t invested yet on Tax Liens and would love some questions answered that have been hard to research. If anyone has some time to help I would really appreciate it. My questions would probably be random, but it would help fill the gaps that are making me hesitant to take the plunge.

Thanks for any help!

Wayne Brooks · Answer

@Bernard DePascale

If you’re talking about FL, there are two different types....

1) a Tax Certificate where are essentially just loaning money to the county, they happen around the first week of June each year.  You bid the interest rate down to receive one and you have No ownership rights whatsoever. Most certificates go for less than a 1% rate, but you get a minimum of 5% total over the life of the Certificate, no matter when (if) redeemed. It can cost thousands to force a public sale, in order to get repaid if the certificates don’t get paid off, when you want your money back....and you’ll have no advantage over anyone else in buying the properties.

2) Tax Deed auction, which occurs when someone with a Tax Certificate sends it to a sale.  You get actual title to the property, but not “insurance title” for four years unless you do a quiet title auction (approx $1500-$2000 and 3-4 months).  In most places the auctions are very competitive, expect to pay 80-95% of current value.

Bernard DePascale · Answer

@Wayne Brooks So deeds are the way to go?

Bruce Lynn · Answer

OTC is mostly junk in my area.   Landlocked properties, unbuildable lots, flood plain, lots in small towns where no one is building, etc.  Occasional jems, but not often and the jems are not easy to find and still involve a fair amount of work to profit.  My experience on OTC is you might go through due diligence on several hundred to find a good one...and then the work begins.

Bernard DePascale · Answer

@Bruce Lynn Classes always worry me since it’s good info, but you really get more mileage out of coaching/mentoring which always costs some much higher amount and even then isn’t very focused on the individual.

Since the competition seems pretty crazy is the OTC liens/deeds ever worth it or are they overlooked for good reason?

Bruce Lynn · Answer

You are lucky in FL to have an expert who teaches classes....Sandra Edmonds the Queen of Tax Deeds.  I believe she is in Palm Beach area.  I have never been to her classes, but when I watched a couple of videos she seemed legit and knew her subject.  Classes weren't cheap, but much less than the crazy $5000-$10,000-$30,000 classes the gurus seemed to charge.  Probably well worth whatever you spend to get it from a local expert who is practicing in your market.

Wayne Brooks · Answer

You can look at the past sales in your county on the tax Deed auction site....you can see what prices were paid for what properties.

Bernard DePascale · Answer

@Wayne Brooks That’s crazy low. Is florida “swamped” with lien investors and I should look to other states, or are deeds the way to go? (Lots, SFHs, etc.)?

How should I determine my bid amount as in what’s a good rule of thumb for what im financially willing to spend? There’s the initial fee/deposit and then the final bid amount, but what about after that? Should I also factor in quite claim costs or maybe quit claims?

Sorry for all the questions on questions but these have been just weighing on me.

Wayne Brooks · Answer

@Bernard DePascale You should be able to find the results for Certificates in your county...90% or so of them go for a 0.25% Interest ( yes, 1/4 %)....they make no sense to me.

Bernard DePascale · Answer

@Wayne Brooks Thanks for the Reply

Essentially Florida is where I want to start since I reside here, and I was researching deeds moreso than liens because it was hard to get and real answers about deeds so I thought liens might be a safer investment and I can invest while I continue researching deeds.

How do people handle Liens year round? Do they have a schedule since you mentioned beginning of June for Florida will they invest in different states each month so that they redeem on an annual timeframe?

Anyone have some time to help me with Tax Liens?

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