What is the most important research?
I have the list for th yavapia auction and am taking notes basically to learn more aout the process. i am trackingthe 2003 assesed value, 2002 values, and 2002 tax bill. What is the most important thing i should consider if i was to go to an auction and bid. Some of the property bidding stars well below the tax rate, is this a good buy or does it have no relation. As the bidding is on interest rate would the bidding not be for the whole taxes anyway? I have read a couple books and am planning on attending an auction mostly to watch, but cant really find this answer. thanks
Hello Cay25, well I guess it all kind of depend on your county where the property is located. Most cases the assested value is lower than the tax value. Here in Lexington the PVA is about 20% below the resale value.
At auction you can get deal well below the assested value. Just don't be the first one to bid. Consider the location of the property, because it is all, location location location.
Do your homework, figure out what you would do with property before you bid, and always do a complete walk through before buying.
I am sorry i should have been more specific before. I am actually not trying to buy property or deeds, just the tax lien.
Is location as important in this case. My goal is not to get the property trying to pick something that someone would actually redeem on. Course i would not object if they never paid up!
You can't do a complete walk through before buying tax lien property.
Hi there,
The most important research before you go any further should always make sure that you are in a state that will serve you as the "senior" lien holder to any other liens against the property. California, for example, is not a good state to buy a tax deed, because you'll never end up with the property, even if the home owner doesn't pay up. In Texas or Kentucky, for example, they might consider you the "senior" lien holder to the mortgage, but not the hospital bill. So if you have a homeowner that is dying of cancer and is racking up his chemo hospital bill to $250,000, he might not care about his tax bill and let it go. You then buy it at the auction and hold on until redemption period. You're finally getting the house, but you will also be responsible for the $250,000 hospital bill. Other states will keep the mortgage holder senior over the tax lien holder, etc. There are as many different laws as there are states.
There are only about 10-15 states that are worth buying tax liens for, at least in a safe way and without having to spend additional money on attorney's fees. I say 10-15 because some states changes legislative every year and they are good states to buy in one year, but not a good state to buy in another...
So be careful, do your research there first before looking into the actual lien itself.
Good luck.
I'm new to this site, so please pardon my ignorance. What ARE the 10-15 states where you can safely buy tax liens?
While I'm not attorney I don't really want to say which states EXACTLY are good or not so good to buy in. But I can tell you where I personally buy and don't buy... My favorite states to invest in are Indiana, Tennessee, Alabama, South Carolina, Arizona. I wait 12 months for the owner to pay his or her bills and if they don't, I can go through the foreclosure process and the property in the end belongs to me free of any mortgages or hospital bills or any other liens.
I don't buy in Texas, Kentucky, Georgia because of the potential legal catastrophy it could cause and because of some liens that remain with the new home owner, no matter what.
Some states I stay away from because the redemption period is too long and I don't want to stay non-liquid for that long. I also don't buy in California as the deed never belongs to me but remains with the tax collector. Even if the bill doesn't get paid, I still don't get the property but it gets auctioned off to the highest bidder.
There are some states that are good, some are better, some are not so good and some are terrible. Laws change literally every year. So it's hard to put a finger on one state alone. It's all in the research!!!
Hope this helped!
Thank you! I assume by research you mean reading every state's real estate tax laws, right? I'm thinking of getting my feet wet by going to the county struck-off properties, but my main concern is still getting stuck with other leins on a property. Does a title search from a title company show ALL leins, even from other states/countries/IRS, etc? Any general advice for an absolute babe in the proverbial woods? What do you wish you had known starting out? Also, given the economy, would you say this is a good time to begin in this business? Thanks in advance!
Hey Spot,
Good questions! The one thing I wish I would have known when starting out was not to spend unnecessary money on info mercial products that make it sound like you can get property for $200. While it's possible, it's not very likely and chances are very, very slim. The second most important thing to me is to find the states that "pardon" all liens, including IRS liens when your lien turns into property. Don't worry about WHAT liens are on the property as long as you know that the state you're investing in pardons those liens. The states I mentioned above nullify all liens if a lien matures into a property, at least for 2003. If you have any specific questions for a specific state, feel free to send me an e-mail at info@dynamicinvestmentsolutions.com
Dynamic,
If your are Françoise Johnson then I need some personal tutoring on Tax Liens.
We appreciate your in-put here at TCI on Tax Lien investing, looks like you have the experience to help.
John $Cash$ Locke
I was recently informed that the following states are beneficial for tax lien investing...Texas, Iowa, Arizona, Michigan, Florida, and IL
Maybe someone else can confirm my findings.
Hey JohnLocke, no hard feelings. I'm glad to help.
Tab, Texas is good but not in 2003. Some law changes that make it hard if you get property.
Michigan has too many liabilities, I stay away.
South Carolina is great, Tennessee is great, Alabama is great (3 years to property at 12%, auctions are coming up).
Georgia, stay away unless you have good attorneys and deep pockets.
Quote:
On 2003-03-19 18:30, Dynamic wrote:
<<snip>>
Some states I stay away from because the redemption period is too long and I don't want to stay non-liquid for that long.
<<snip>>
Hi Dynamic,
Doesn't Alabama fall into that category, 3years?
Thanks in advance,
Steve
Hey Steve,
You're absolutely right! And it also depends on your portfolio...
If all funds you have go to Alabama and you have to wait for 3 years to property, then liquidity could be an issue. However, if you have multiple liens in multiple states, some mature, some don't, money flows in from other states while some money stays patiently in Alabama.
The ultimate goal is to have multiple liens in multiple states. Different states hold their auctions during different months, some of them do this purposely. So, while your SC liens from October might be paid back to by, let's say January, you are just in time to recycle your funds into AZ liens in February.
It's really up to the individual investor and the size of the portfolio and how liquid one wants to stay. If liquidity is a problem, one can always turn around and sell the certificate for cash to another investor.
I'm not sure who was saying that Alabama is a good state to buy in, but they better research the law a little better. First - you are six years from owning the property. A three year redemption period and then three years additional holding through adverse possession to perfect interest. Oh, and by the way - other encubrances (such as mortages and other liens - they don't go away).
Check the law!
I hear that Florida is the only state that you can buy Tax Liens "Over The Counter". If you do not live in one of the "good states" for TL's, is there an easy way to purchase them without a road trip?
Michigan no longer does Tax Lien sales.
Quote:
On 2003-04-04 23:55, StaceyWyatt wrote:
I hear that Florida is the only state that you can buy Tax Liens "Over The Counter". If you do not live in one of the "good states" for TL's, is there an easy way to purchase them without a road trip?
Yes, I am interested in the answer to the above question as well. I live in California and don't hold any property anywhere. Tax liens/deeds seem like a good way to own property (any kind of property) cheaply.
Can you purchase over-the-counter liens or deeds from Arizona?
Hi KB,
Actually 6 years to property is only partially correct. While Alabama is indeed 3 years to property, it's possible to foreclose after the 3 years are over. I don't personally invest in Alabama (too long to property). I would only invest there through an experienced full-services company who has attorneys backing them up. But it's definitely one of the better states to get TLCs.
Kharvel. I am in the same situation. I live in southern CA and would like to start investing in tax leins in other states. OTC would be great in that I wouldn't have to travel to start out. Over time, travel could be made possible as my portfolio grows. Can anyone help us Californians?
jkoontz04@gsm.uci.edu
You can buy over-the-counter liens in FL and AZ. Please be careful. Think of it this way, the good liens get bought at the auctions by people who can afford them and people who do the research and know for sure the liens are good. There are millions of dollars in some of these investors' pockets. Especially in FL and AZ, two of the hottest lien/deed states! The competition is fierce. What does not get bought does not get bought because of a specific reason (which those who do their research are aware of). If they were good liens, they would not be "left over."
If anyone out there has bought a good, safe and profitable lien over the counter or what they also call left-over liens, please share your experience with us.
Dyynamic, i was thinking of investing in a property at a tax deed auction in california, if I win the auction, am I responsible to pay any 1st or second mortgages on that property or do they get eliminated? what else should look out for?
Thanks
Dynamic,
I have followed the conversation and found you to be very informed. I am new to the tax lien world in Texas and would like very much to understand what pitfalls could arise by investing here. I have a few basic questions,
1. Do Texas tax liens only supercede previous liens or completely nullify them? Your example was very clear, however, I have read an article that is conflicting.
2. My long-term goal is to own the properties that I will invest in, if they are not redeemed. From your point of view is this a difficult process in Texas or is there just more effort required on the research end?
3. In your opinion is obtaining a Real Estate License a good step towards a more complete understanding of the Tax Lien business?
Thank you in advance for your help.
florida is a GREAT OVER THE COUNTER STATE-several counties have liens available now--(COLLIER COUNTY/NAPLES is one good example)--i am a bird dog--i transfer@$50 each-- i have access/information on over 2,000 over the counter tax liens available for sale in next 2 weeks at sales statewide-i will be attending 4 with over 35,000 tax liens for sale! arizona is also good--graham county has over 5,000 over the counter and mohave has 18,000 over the counter!
need anymore info or need a birddog-email me-rconcentine@yahoo.com
What is the best way to check the tax and property law in each individual state?
I found that the clerks in the Tax Collectors office are not that knowledgable and you cannot rely on their accuracy.
TexasNewOne, sorry, just saw your post.
Texas law is ever changing and therefore not a stable State (in my opinion). While the interest rate is good, in order to stay safe I think one should have a large amount in Texas with extra cash left over for attorney's fees. If you don't have that, you might spend more on legal fees than you make on a couple of liens. Texas used to have a great system going, but not in 2003 and most likely not in 2004. Check the date of the article too.
Having a RE licencse will not teach you anthing about tax liens. My neighbor is a successful realtor and she doesn't have a clue about tax liens and shows up on our conference calls frequently to learn so she can talk to her clients about it.
A great place to get information about specific states and the specific laws is the National Tax Lien Association. You can find them at www.ntlainfo.org. You're right in that some tax collector's clerks are not very knowledgable; you definitely need to speak to the actual tax collector if you want information; again I've found some of them not very helpful, and others are. The NTLA is a great place to get started.
Dynamic, is it possible to access information on the web with regards to the pardoning of liens. I am particularly interested in obtaining this info for the state of Georgia. Your comment on staying away from Ga....unless you have good attorneys and deep pockets.. concerns me now that I have recently made purchases at a Ga. tax sale. There were no liens recorded at that time. Would possible future liens be affected? Thanks for all of the insight you've passed on to us today.
What about Nevada?
I understand that in 2004 it's going from tax deed to tax lien. Any idea on the details of how it will be to buy there?
Is there a summary of each states' law, redemption, supieor liens, interest rates. . etc ???
I live in Illinois and does anyone know the status of purchase and foreclosure for this state? How long does it take? I am new to this and hope to learn some things.
Does anyone Know about Maryland, DC or Virginia or the central to northern Eastcoast areas? I just missed the annual DC auction
I'm in an unpopular state, MA. I suppose we are not any good for tax liens.
New York? No one here speaks of NY tax leins! Does anyone have some info for newbie me?