FL Tax Deed Question
Hello,
I am quite new to the tax deed process, but I have come across a property that has caught my attention, and I don't want to miss an opportunity if it exists. It is an older single family home built in 1913 that is listed on a FL county tax collector site as a "land available for sale". The neighborhood doesn't look great from my research, but the taxes due are only approx. $900, and the assessed value is $36k. I obtained a satellite photo of the neighborhood which shows that it is not in great shape, but is an older developed neighborhood with residents. I also found similiar sales on the same street for $40K +. This seems too good to be true. Why would this property not have sold earlier at a tax lien sale? I'd appreciate any thoughts from those of you seasoned pros on what I should look out for. Thanks in advance.
With tax deed sales, what you see is what you get. You need to do as much research on the property as you can. It is very real that the house is only up for taxes, but you need to make sure it is what you are looking for. Thorough research is the key. Sounds like a great deal. Hope it works for you. Good luck
You are better off if you do a physical inspection of the property. I came across a similar property in the Orlando area - I was tracking some properties to see what they would sell for at tax sale - after driving to the subject property I understood why the owner walked away for approx. $1000 in taxes - the property was one of 4 units in a condo building that had a fire and was determined to be uninhabitable. I sure am glad I drove by before bidding! Good Luck!
Most likely there are governmental liens against this property and they survive a tax sale. Actually, in FL anyway, a gov't lien on any property attaches to any other property titled in the same name that is in the same county. Plus, one county can record their lien in another county if they choose, much like a judgment creditor can. Code enforcement liens are typically in the $100-$250 PER DAY range so they can add up fast. THE TAX DEED BUSINESS SUCKS. THERE ARE TOO MANY GET RICH QUICK SEMINARS & PEOPLE ARE PAYING RETAIL AT THE SALES. NO PROFITS THAT WAY.
The essence of your question was: "listed on a FL county tax collector site as a "land available for sale". "
First, you have, in my opinion, located a wonderful area of REI, namely Tax Deeds. There is no better way to be involved in REI because tax delinquents are the most motivated of any motivated sellers. This automatically means that you have the potential of making a great transaction - if you can negotiate effectively.
Anyone can learn the mechanics of any REI "system". The real success comes when you master the "art of the deal", which is mostly made up of good sales techniques. This area is neglected by RE guru's, perhaps because it is not "mechanical"; it is not prone to devices under your total control, like putting out signs, etc.
Nothing good will happen unless you can control the conversation, and make the seller comfortable with you by having him feel that you are credible, competent, compassionate and compatible. When these "6 C's" are being accomplished, in a work-man-like manner, then your transactions will close consistently, with significant profit and with friendship.
Most people think that the only way to invest in Tax Deeds is via purchasing a property at the tax deed auction. Not so! The most profitable time to buy is prior to the tax auction; and the closer to the actual auction, the more profit potential there is, because the seller will be more motivated. You can also make great returns purchasing after the tax deed auction, however the selection is much reduced. Your best choises are made prior to the tax deed auction.
Finding the potential "deal" is only the first part. Next you have to close and that is where the salesmanship comes into play. Even though he is in a serious financial prediciment; if the tax delinquent does not like you or does not trust you, he will not sell to you. He will cut his nose to spite his face, rather than let you make anything. So, just finding a situation that has a profit potential is not good enough. You have to develop the sales skills to close the transaction.
To answer your question directly: you may have found a really good transaction.
Florida is a Tax Lien state. When a Tax Lien sale occurs, not all tax liens are sold. In those cases, the county retains the tax liens. In Florida, Land Available For Sale, is a piece of tax delinquent land that has been on the tax delinquent roles for such a significant length of time, without anyone buying the tax lien, that the land is now available to be purchased directly from the countly, for the cost of the total amount of taxes and penalties due, and the land does not have to go through the standard tax deed auction process.
Up until this point, the county has not taken ownership and the land owner can redeem for the same amount.
Of course, proper due dilegence is appropriate and paramount. You can typically find out the details of this transaction by contacting the County Tax Collector's office.
The clerks in Florida are the most friendly, accomdating and informative clerks that I have come across. It is a genuine pleasure to work with them. You can often access information online from the County Assessor's office, the County Recorders, the County Tax Collector, the counties Land Development office and the area's Chamber's of Commerce.
If from out of the area, consider:
1 Hiring a buyers broker,
2 Using a local hard money or regular lender to refi the property or buy and then rehab the property .
These two local professionals will allow you to have access to great information regarding local trends, paths of progress, good local contractors, attorneys, etc. The real estate broker can take digital pictures of the property, do a market assessment , work for you when selling, and will only get paid when you do. The hard money lender will give you terrific local insight, as well as the monies to make the transaction happen. Just watch out for pre-payment penalties and points! However, if you buy, fix-up and sell within six months, remember that the annualized ROR is doubled and the annualized effective interest rate has been cut in half!
Hope this helps. Good luck!
Mitchell Goldstein
518-439-6100