Found An Auction, Got A List, Now What?
I found an auction to go to and got the list of liens from the tax collector. Now what's next What type of checks should I do to make sure a lien is a good investment?
For example are two entries from the list:
Owner Name: Slintak, Deborah
Block/Lot/Qualifier: 101.01 18
Additional Lots:
Total Due: 1,307.92
Owner Name: Heri, John & Christine
Block/Lot/Qualifier: 237 25
Additional Lots: Lots 26,27,28
Total Due: 425.41
Based on the above info, what can I do to make an educated investment decision.
Thanks in advance for any advice.
mike212--(NY)-----------
and the "consideration" is the orginal amount of the loan.
I think you are right.
I assume that is a mortgage ("MORT"
Well, I don't know what more you might want to do. I don't know the law for collecting delinquent property taxes in New Jersey.
I know that some posters have said that some of the New Jersey auctions have a lot of the big wall street investment firm types there buying as many certificates as they can.
I saw this phenomenon in Tucson, AZ a few years ago. There are few liens that an ordinary investor can buy. These people have big binders full of the information on the property: the assessment roll printouts and even pictures of the properties.
Before you do a lot of work on the sale, I'd recommend that you call up people in the office that will be holding the sale. Ask for the person who is in charge of the sale. Ask that person, and perhaps others in the office, what they expect to happen, given what they have observed in the past few years. How many liens actully go to sale? How many get bought by ordinary people investors? Are the big financial linstitutes likely to buy a lot?
Good Investing***********Ron Starr************
The way to make your list pay you is to first learn, through whatever means works there in the Big Apple, what the RE is worth, what like, or similar, RE in the area is worth...so you know whether you're getting a bargain if you end up with the RE.
I'll admit it's tough when there are a lot of properties on the list, and I used to face a similar problem in another city & state, when, monthly, I'd get a list from the Tax Assessor, of something like 70 names...and there was no really great or simple mechanism in place to do this RE research.
But today there are undoubtedly a myriad of RE info sources and resources, so with that assistance you might be able to pick out the real values quickly.
It depend on the interest rate New York state will allow you to charge the owner. This type of investing can be very lucrative. Learn all you can by reading articles on this site. Good Luck.
mike212--(NY)------------
I assume that this county is not in NYC, as the city does not sell tax liens to individuals.
You need to clarify your goals. Are you going after the liens for investment income or to attempt to acquire the properties? Choose one or the other. Do not try to do both with any single lien. Most beginners say, "Oh, I'm after the interest rate return, but if I end up with a property, all the better."
Bad thinking, in my view. These are two different investment objectives. For each objective you should be buying individual liens that lean toward getting you what you want: redeemed with a good return or ownership of the property. It is possible to do both, if you really want to go to the extra work.
If you want to buy liens for investment income, look for those liens which are on valuable property--many properties with delinquent property taxes are junk, worthless—and buy only on those properties. Target improved properties, especially those which are occupied. And GOOD vacant parcels, typically meaning larger ones and in good neighborhoods. But, if you bought only liens secured by improved properties, you will do fine. If you do some research in the county land records, you can reduce the list further by going after those with mortgages against the properties, especially with institutional lenders. Then not only the owners may redeem, but the lenders are likely to do so also.
Then get out and see every one that you plan to bid upon. Don’t buy blind, you might end up with an unpaid lien against a wet lands (prior to EPA known as swampland), a 1 foot by 10 foot parcel, or a property with 250 old rusting, leaky 55-gallon barrels of foul-smelling substances, in which case you will learn about EPA soon. Then you will not get an investment return and probabl will not get your money back, as you will probably not want to take the properties by deed.
If you are after properties, you need to target other liens than those I mentioned earlier. John Beck, who I consider a friend, sells a bargain-priced tax sales investing educational program called “Free and Clear” at his www.johnbeck.com website. In it, he gives you guidelines to buying liens most likely to be convertible into deed ownership.
You will have to do more research than for investment return. Then you will also want to look at the properties and probably had better do a lot of research on the ones you are most interested in owning. Such stuff as zoning, building restrictions, availability of utilities, buildability of the parcel, road access, potential for well or septic systems in rural areas, etc. There is a lot of work to do trying to figure out which properties to bid upon. Hint: ignore the property with the 256 leaking barrels. (I know, I said 250 earlier. But time has passed, and more have been dumped off.)
Ask the people conducting the sale what form of payment they will accept and when. Then have that form of payment available to you and go to the sale with your list of researched and targeted liens. Bid on them. Smile if you get some. Send me $100 for this advice. Continue to smile.
Good Investing********Ron Starr************
Thanks everyone for your response. I'm in NY, but this auction is in NJ.
Ron thanks for your detailed post. I have just a few more questions:
I'm looking to buy liens that will get redeemed. In NJ rates go up to 18% but usually go much lower at auction.
(1) Using that information I posted above, how do I even find the address of the property? (All I have is block and lot #).
(2) How do I tell if there is a mortgage from an institutional lender? (You mentioned county land records, where are these available?)
(3) How do I tell if there are any other liens on the property (is this even neccessary since tax liens are most senior)?
(4) Are there any online resources available do prepare research first (lookup addresses, mortgage info)?
Thanks so much for your help.
mike212--(NY)---------
(1) Using that information I posted above, how do I even find the address of the property? (All I have is block and lot #).
The assessor's office. It might be online. Look for internet offices of the county government. In some parts of the Eastern US, these are not at the county level, but at the township or even the city level. Find out what it is for that area.
(2) How do I tell if there is a mortgage from an institutional lender? (You mentioned county land records, where are these available?)
Similar to above. Look for a county clerk, county recorder, or perhaps township level or city level. Call the government office and tell them you are looking for the land records office, or "where the deeds and other official documents are recorded or filed."
(3) How do I tell if there are any other liens on the property (is this even neccessary since tax liens are most senior)?
You need to first know the state statutes related to the collection of delinquent property taxes. In most state you are right, they are a superior lien and it is not necessary to know about other liens. Look at the websites for the agency which is conducting the tax line auction and see what they have to say about the auction. If that is not enough, check other such agencies in other locations within the state.
(4) Are there any online resources available do prepare research first (lookup addresses, mortgage info)?
Possibly. I indicate how to start in answer to question 1. You could also call the land records office and ask if they have their records online for free viewing. Some places do, many do not. Some charge a few for online access. The variations from jusdiction to jurisdiction is too varied to give a blanket answer beyond what I have just said, I feel.
Good Investing**********Ron Starr************
tell me the county the properties are in and I'll give you the address..[ Edited by lp1 on Date 01/29/2004 ]
Its Ocean County NJ. There are 600+ properties on the list. I'm sure you don't want to tell me the addresses of all of them. How do you do it?
With the well know sky-high property values in NY & NJ, one can only dream to get ANY property (even a property shadow) for 1,307.92.
I do not see a risk there for as long as the property described is not the street corner garbage can, seating on the non owned cement pedestal.
Depends of where you like to invest in NJ, I still don't see how can you lose buying small tax liens.
Anyhow, my sugestion to you is to start your venture only AFTER you read all the details about sale technicalities, pertinent laws and local sell mechanisms. Maybe you should adtend an auction or two where you can question few more tax lien investors about the business ropes.
I can also offer you to vist the following site: http://njtaxlieninvestor.com/
Good Luck! [ Edited by omega1 on Date 01/29/2004 ]
I found some info from the county clerk/ land records office. Ron or anyone else with experience...I'm going to post an example....can we go through the analysis together?
The first one was:
Owner Name: Slintak, Deborah
Block/Lot/Qualifier: 101.01 18
Additional Lots:
Total Due: 1,307.92
Here's the info I found:
Type: MORT
File Number 076477
Date/Time: 11/9/1994 09:51:00
Book Type: MR
Book/Page: 4017/931
Pages: 0
Consideration: $135,000.00
Legal: 1218 AQUARIUS COURT
Grantors: SLINTAK DEBORAH
Grantees: COMMERCE BANK/SHORE
Some questions about the fields here.
Consideration is what the person paid back in 1994?
Legal is the address of the property?
Grantees: fits your advice Ron for an instituational lender I think.
So correct me if I'm wrong, If I did a drive by the address above, and the house is intact and the land seems to be fine, this is likely to be a safe investment.
Should I look at anything else before I put up the cash to buy the lien (if I can win the auction)?
Thanks
Hey Mike (and all others out there) here's a real cool website you can go use in your search ****Must Reach Freshman Investor status before posting URL's*** Not sure how applicable it is for NJ, but I know it works well for many other states. If you have a PIN # or address you may be able to view a pic of the Prop, assessment values, etc.
Hope it helps
Mark
SLINTAK DEBORAH
218 AQUARIUS CT, FORKED RIVER, NJ 08731
HERI JOHN & CHRISTINE
BRIGANTINE RD, FORKED RIVER, NJ 08731
13-00237-0000-00019
HERI JOHN & CHRISTINE
BRIGANTINE RD, FORKED RIVER, NJ 08731
13-00237-0000-00023
HERI JOHN & CHRISTINE
BRIGANTINE RD, FORKED RIVER, NJ 08731
13-00237-0000-00025
HERI JOHN & CHRISTINE
BRIGANTINE RD, FORKED RIVER, NJ 08731
13-00246-0000-00008
hope this helps!!