All Forum Posts by: Joe Donohue

I'll see you on a FL county RealForeclose.com site soon enough!  

@Tom Scott    There are many ways to lose you principle.  

First,  before bidding, make sure you actually drive by the property and it is still there.  Make sure that it is not in a flood plain.  Just because you drive by it on a nice sunny day doesn't mean its not underwater when it rains.   When you drive by, pay particular attention to the roof.

Second, when bidding, make sure you bid on the right property.  DUH

Third, once you have the tax lien certificate/deed, make sure to FOLLOW THE STATUTES for that State.  If you employ an attorney, request copies of everything they do - all notices, all title work.  I take it a step further and do my own work (duplicate work) on high value liens to make sure nothing was missed.  Do this especially when it is the county's job to do something (like SC or Marion Co Indiana).  

Fourth,  during the redemption period is a good chance to again drive by the property and get an in-depth look at what is going on.  Dig through title work, visit the county, look for anything wrong.  Don't forget to look up Environmental issues.  

Finally,  File petition for deed in the time allotted.  

@Greg Scott  IMO, there are so many problems with the Charles Sells model.  He is trying to attract passive investors into an active game.  or vice versa.  Real Estate is first a local business, and the idea of spreading out into all these states without having real boots on the ground is to me always suspect.  Also IMO, he is in the wrong states and counties.   I've heard so many bad stories.   

Hope this helps!

Joe Donohue

 
Hello Everyone,  
I invest heavily in Indiana tax sales.  Let me help clear some confusion.

The minimum bid (opening bid) earns a 10% penalty if redeemed in the first 6months, and a 15% penalty for the rest of the redemption period (6 months).  The surplus (overbid) earns 5% PER ANNUM.   THAT'S WHENEVER THE REDEMPTION OCCURS = 5% ON OVERBID.  The difference is a penalty is a straight return whereas the per annum is what it says.   

The overbid USED to earn 10% per annum about 3 years ago, but now it is 5%.   Lobbyists got that reduced.

As for the surplus (overbid), which I believe is the topic of discussion,  that amount is held in a separate fund at the county and is paid out when a redemption occurs.  If a redemption does not occur, the county considers that money as part of the payment for the property.  Now, if the previous owner lays claim to the property after the redemption period has ended (during petition for tax deed), that owner may be entitled to collect some or all of the surplus.  Furthermore, if the property houses the owners, and they destroy the property on their exit, the tax sale purchaser may also submit a claim to that surplus for repairs.  Interesting right?

While I do not invest the Fort Wayne area, I do invest in about 20-25 counties per year.  The state statute is the same in every county

Also, you do not necessarily have to pay Spring taxes and liens during the redemption period.  I would highly recommend it, however I have seen many of my competitors wait to pay it after the redemption period.  Its a county by county basis, some judges prefer it.  Also, the Spring taxes earn 5% per annum just as the overbid, and adds weight to the redemption amount, so do it!

Hope this helps,
Joe Donohue

 Well said.  The tax deed auctions are swamped with out of state (and out of country) investors paying market prices.

If you are set on having rentals in high crime areas, I recommend trying to house police officers.  Offer them a special rate.  Having that squad car parked out front is priceless.

Ohio counties usually do a bulk sale to a single winning bidder.  Everything is kept private.  Sucks but that's why no one is talking about Ohio.

I do not know the intricacies of Ohio, but I suggest calling your local county tax department to get more information.  I agree that you should focus on small counties first.  

As far as the the interest rate - it depends on the auction type:  Bid up Property or Bid Down Interest?  Again another question for your county officials.

My entire business is centered around Tax-Default property.  We invest in multiple states.  You can be very successful if you do the right research before the sale.  Knowing the area is paramount.  The less you know the area the more easily avoidable mistakes you will make. 

One thing you have to keep in mind is that these are Tax Deeds or deeds issued by the county.  They are not Warranty Deeds or "clean" deeds.  Properties over a certain value need a quiet title to sell at a reasonable price.  This requires additional time and money.  My advice is to always figure a quiet title cost into your bid amount.  The price can vary wildly.  

-Narrow down an area to concentrate on.
-Call the county to learn the process
-"Backtest" prior sales vs. Market values. (Spend a great deal of time on this)
-Attend at least a few sales before actually investing.
-Talk to an attorney

Happy Hunting
Joe D

Whenever you plan to purchase a tax lien certificate, you must factor in average attorney costs and other possible costs such as maintenance (to avoid weed liens, etc.) and future taxes.  

Your possible legal expenses:
Noticing
Title Work
Petition for Tax Deed
Quiet Title Action
Contract review or templates.

Many Florida sales are online
https://www.charlotte.realforeclose.com/index.cfm?...

https://www.lee.realtaxdeed.com/

https://www.miamidade.realforeclose.com/index.cfm

I have been to only two in person Tax Deed sales at Collier and Monroe County.

IMO the lists are extremely tight and competition fierce, especially online.  Look at past sales and you will see buyers from all different countries (paying way too much).  

You also have several big funds 
Interesting article on  the Florida tax lien certificate market:

http://articles.sun-sentinel.com/2013-05-03/news/f...

My advice is to stay in your local market to get started.

Happy Hunting!