Real Estate Agent · Los Angeles, CA · Member since 2019 · 25 posts · 0 votes
I’m ready to take the step of purchasing a tax lien in Mohave County AZ. I’ve done all of my due diligence other than knowing the foreclosure costs of someone is to not pay the lien within the 2 year term. It’s is for a vacant land that is valued at about $7,000 with a $280 lien.
Does it cost cheaper since it’s not a homestead?
Does anyone know around how much it’ll cost based off experience?
Torrance, CA · Member since 2019 · 13 posts · 4 votes
6y
@David Petikyan
Hey I just done one for Mohave county tax lein as well and picked up a parcel. But I bid at 0% because I knew I wanted it lol. I just paid the first payment for the tax. Yes I belive you make the payment for 3 years, and as for forclosure costs I'm not exactly quite sure. I would also like to hear the specifics but from what I believe it's about 2-3k with a lawyer? Great question!
Real Estate Agent · Los Angeles, CA · Member since 2019 · 25 posts · 0 votes
6y
@Alan Matthyssen I just got off the phone with a lawyer who said it would cost about $2,500. I heard people can do it themselves for about $500 so I’d like someone’s insight on that who’s done it before.
Either way, I’m about to pull the trigger on this $280 lien on a $7,500 valued lot. It’ll be a decent return regardless and a good learning experience.
Did you pull the trigger? How low did you bid down? Are you looking into acquiring the property or just going for the interest winnings? The next years auction I was going to look back into my "farm area" and I will have more capital to place bids on and see what I can acquire to create a "cashflow" of selling the properties or just see what interest I can achieve.
Real Estate Agent · Los Angeles, CA · Member since 2019 · 25 posts · 0 votes
6y
@Alan Matthyssen I found the property from the county’s OTC (Over The Counter) List.
You get the property with the full interest amount at 16%
I’m fine with either redeeming or getting the interest. It’s a win either way. Yes I pulled the trigger, I’m mailing the money order and registration forms in a bit.
Real Estate Agent · Los Angeles, CA · Member since 2019 · 25 posts · 0 votes
6y
@Alan Matthyssen My tip to you is to go to the county website for where you’re trying to purchase tax liens, and search for their OTC list. Mohave County AZ currently has around 16,000 liens that can be purchased anytime. This list is updated daily and you get the full interest amount. You just have to be patient going down a list of some bad properties, but there are definitely some great investments that just slipped through the cracks.
awesome to hear to pulled the trigger! Now this (OTC List) is new to me. Do I search the actual county treasure office or is it on real auction? Thanks for the tip!
Real Estate Agent · Los Angeles, CA · Member since 2019 · 25 posts · 0 votes
6y
@Ned Carey thanks for your response Ned. I understand that title insurance doesn’t cover the properties due to the cloud on title. From what I’ve heard is that owner financing is fine since you can move forward without title insurance.
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
6y
@David Petikyan if the tax sale foreclosure is done properly then their shouldn't be a cloud on the title and you should be able to get title insurance. This will vary by state and the particular insurance underwriter.
In MD we can get title insurance but we have to use specific title companies. Now due to how the foreclosure process works in some states you may not get tile insurance even if the case is done properly. Virtually all tax deed states require a "Quiet title" action to get title insurance.
That aside, yes you are right, owner financing is makes that issue go away for the most part. This can be a great business model if there is market demand for the land you acquire.
Real Estate Agent · Los Angeles, CA · Member since 2019 · 25 posts · 0 votes
6y
@Ned Carey I’ve been investing in CA tax deeds for 4 years and acquired 20+ properties throughout that time. For CA, title companies won’t cover the property 1 year after it’s bought. They’re fine to do it after that time frame. I typically do all cash or owner finance and just let the buyers know that the county wipes all the past liens when they auction it, so title and escrow isn’t really needed. (I write deed, agreement, etc.. all myself)
This is what my mentor taught me and we’ve never had any issues.
Now that I’m expanding to other states, I’m just trying to figure out how long it takes after a tax deed, or lien foreclosure takes place for title insurance to be covered. States have different time periods and I’m not so sure where to find that info.