All Forum Posts by: Christine Garnier

Thank you for your answer Randy. I totally agree with you. When signing a QCD to an investor, out of complete transparency, one should always provide a copy of the title search so that the buyer is informed of any defect on the title. This is so easy to do, even without a title company, this information can be found in probate court's data.   

I am trying to find the correct process to sell a parcel with a quitclaim deed in Birmingham while I am in GA. I believe that working with an attorney that  provides escrow services would allow the transaction to go smoothly while reassuring both parties. Does anyone know how that type of transaction goes, I am trying to find the step by step process for my buyer and myself. 

I thought about skipping the attorney and going with just a notary but out of complete transparency, I believe that it will reassure a buyer to know that an attorney is going to oversee the transaction.   I appreciate any feedback on this topic. Thank you.

 I shouldn't say that Michael but when I read your message I laughed, not that it is funny but the whole complexity and the lack of information regarding this matter makes the whole situation funny! Imagine, I contacted the County and they were unable to answer the question regarding the multiple lienholders. 

From what I understand, you need to have a lien and pay three consecutive years before you can file a foreclosure action but if you buy an OTC lien and you are able to find multiple liens for the same property, I believe that the date that counts is the tax sale year. So if you buy OTC liens from 2020, 2021, 2022, you should be able to file for foreclosure in 2023. Please anyone, correct me if I am wrong.

Other than that, and since we do not know how things would play with multiple lienholders, Denise Evans's answer provide the key on how to move forward with a foreclosure action. Again, the system is new and no one can really come and give us feedbacks on their personal experience. Yet. 

Thank you so much Denise for your insight, I sincerely appreciated it. You are a blessing to the community.

 Thank you for your answer Michael. I just received an email from Shelby county and they refer me to Code of Alabama §40-10-197 which doesn't answer the question in regards to multiple lienholders and the foreclosure action.

Alabama has now implemented the new tax lien system and  many are left wondering how it really works, especially with the OTC tax liens.  When multiple liens have been issued on a property, we now see multiple lienholders for the same property. This fractional interested ownership is truly a turn off. Now what happens when one of the lienholders want to file a foreclosure action after the three mandatory year period? 

1) Does this lienholder have to buy the liens purchased from previous lienholders, before filing the foreclosure action? If so, what is the process or worse, what if the other lienholder refuse to sell? 

OR

2) Can the lienholder who wants to proceed with the foreclosure action proceed and then pay the previous lienholders back, their investment + 12%?

It is so unbelievable to see that there is little to no information on the subject. Even calling the Counties is to no avail because they all say the same thing: we do not know.  I keep hearing that no one has yet foreclosed on a tax lien yet since the system is so new in Alabama, however, investors need to know what is the proper way to do it, especially when there are multiple lienholders for the same property. 

Thank you for joining the conversation Denise. You are making some great points. I did not elaborate too much when writing this post but it is now the perfect time for me to do so. This would allow many of us to have a clearer vision of what is really going on in Alabama.

I came across several websites that are reseling their position and if the pipeline is so very full in Alabama it is because these resellers and wholesalers are hiring foreigners to keep submitting thousands of forms each month. This allow them to keep the deals within their inventory for as long as possible. As a matter of fact, if you were to go on their website (pm me for details), they have thousands of deals at any given time. Obviously, they have created a business out of it  but this has also created a secondary issue for the State of Alabama.

Many investors prefer buying from the State directly because the State offers a superior credibility and because this protects investors from losing their investment, should a previous owner redeem his property. The new issue is that, while resellers and wholesalers are hiring people in the Philippines to fill out forms all day long on the Alabama Revenue's website, the Department of Revenue in Alabama is not generating as much revenue as they should. All these forms being submitted by resellers and wholesalers, just to keep a deal in their inventory has now a strong impact on how the State is receiving funds.

Several investors have already contacted the Tax Commissioner in Alabama and lawmakers to expose the issue. The feedback is that the State is very aware of it and that they are working on implementing a new system in the future. This is good news for many investors.  I believe that once they implement the new protocol that requires people to buy a deal right away or to pay a fix fee to submit a form, this would eliminate a huge part of the issue and unclogged the pipeline in the same time. 

 Thank you for joining the conversation Bryant. I strongly believe that disclosure from resellers and wholesalers would make a big difference. This would inform investors of the potential risk and provide them with all the necessary information to make a wise decision. 

I understand that not everyone is going to like this post but I feel this is our duty to warn others of potential investment risks that could be prevented. This time, I want to expose the danger or buyings tax liens or deeds from resellers and wholesalers in Alabama. Most of them do not own these liens or deeds, they simply fill a form on the state's website to get a price notice. When they receive it, they resell it for profit and this is where you could get hurt.

In Alabama, whether you buy a tax deed or lien from the state, your investment is protected meaning that, if the previous owner who has 3 years to redeem his property, you will get your investment back. However, resellers and wholesalers usually charge double to include their "fee" and if you buy from a reseller or wholesaler while the previous owner redeems his property, then you lose half of your investment. Example:

1) You buy a tax lien or deed from the state for $5000, if the previous owner redeems his property within the redemption period, you will receive your $5000 back, with interest.

2) You buy the same tax lien or deed from a reseller or wholesaler, they will probably charge another $5000 or so, on the top of the original tax lien or deed, so the price for the same item will cost you $10,000. And if the previous owner comes and redeems his property within the redemption period, then.... you lose $5000 overnight.

I know this post is going to upset some of the tax liens and deeds resellers or wholesalers and it's fine with me. I believe that, out of honesty, if you know that there is a risk your buyers could lose half of their funds, you should disclose this information before making a quick sale. This is why I strongly support new upcoming legislation regarding resellers and wholesalers. If you did not have a specific contract with the original seller, then please be honest and disclose the risk to potential buyers. 

As such, when it comes to tax lien investing, i do not recommend buying from resellers or wholesalers. I want to thank Denise Evans for her knowledge, and if anyone is serious about investing in such instruments, please contact  people with credentials that can help you get started safely.