Tax Lien Stories – how is everyone going with these?

 tax deed or tax sale investing is as old as the Tax system and what you have here in the states by and large there will be some group or entitys or individuals that buy these basically for a living. They will dominate the sale, are highly orginized and know what they are going after. Then you have the seminar students that usually pick up the crumbs. You will always get lucky and get a few redeemed however you will also end up with many that never get redeemed. That is because the property basically is worthless has been worthless for 50 plus years and will alwasys be worthless. The investor never quiets title then lets the next newbie buy the tax deed whereby the first newbie lost their money and cycle repeats for years and years and years until the next guru's seminar hits the circuit.

So for some one like Judith who has moved to Lee county she stands a chance of being able to actually identify the properties that would be worth owning. Lee county has 2 Major Subdivisions LeeHIgh Acres and Coral Gables. I belieive Lee High has 750,000 platted lots of record that have a tax bill every year. Coral Galbles around 500,000. These lots were built back in the 1950's to attract snow birds and were built with little or no governement environmental controls. Ergo Long roads to nowhere were there are houses dotted here or there. One will use a well and septic on each individual lot. With the exception that city sewer has gradually been picking up service there. Back in the 1940's and 50'S Florida was a Mosquito pit and to entice Northern development the state allow almost any type of development on the hopes of getting people to move. This is where the Term "I bought a lot in florida site un seen but its under water" This was very famous saying in the states.

So with Lehigh and Coral gables throughout the years these million plus lots traded at 2k to 10k to people that actually wanted to venture out and place a home on a cheap lot. Then we had the big run up in 2000. Lots at the peak of 04 05 06 actually got up to 75k to 100k plus. builders mainly from SouthEast swooped in and started building Spec homes by the 100's. Remember Well Septic good to build and these homes traded at 200 to 300k. size of each home somewhat limited by Septic requirements.

Fast foward to 07 08 and beyond when the market crashed. These homes dropped incredibly. Lots went back down 2k to 10k each take your pick ( of course Sewer avaliable lots cost more) and the opening bids on 06 houses at the courthouse step's were starting in the 30k range. In fact last August I bought 2 there for 35k and 37k repecitively. Nice 06 house's that had 200 to 250k mortgages on them. At one time I bid on a group of 100 houses at 85k from a bank and was glad we got out bid. I bought those 2 to test the market. We did maybe 10k rehab. I paid the bird dog who bought it at the sale 7500. ( I live in Portland Or.) My other bird dog who lives in Detroit was paid 5k. A promotional company from the UK ( a lot like the guys who are pitching turn Key in Aussie) they made 10k or so and I think I made 5k as the money investor. So at the end of the Day the End buyer looking for a cash flow turn key investment paid about 80k. This is typical on Turn Key programs that I fund the acquasition for.

Anyway back to tax investing I digressed. So as for long term in Lehigh or Coral Gables values will remain low for generations and the end value will simply be a function of what an investor will pay for a property given a CAP rate. And or what will a retiree or some young family be able to afford for Owner occuppied.

I was on a State steering committee in 1980 from Califorinia, It had to do with what does the US do with the Millions upon Millions of platted lots that dot the country when they were platted legally the requirements for services ranged from Nothing pure shadow plats but legal lots with tax ID's and tax bills but no way to build on them. To a Development like Lee High were they pushed the roads in graveled them and allow Septic and Well on an individial lot.

The issue is its not sustainable. There is no way you could build out these subdivision in a normal sense there is not the infrastructure to handle them.  IE Roads Water Sewer. Can you imagine 1,000,000 individual wells an septics surround Fort Meyers. All on 100 by 100 lots.

So States that have huge tracks of these what are Called Paper lots are:

California  specifically Riverside county and the next county north out by Edwards airforce base there are millions of lots there that are legal but when you fly over you will just see desert rats in their mobilehomes scattered about. There was a chinese promoter in San Fran. Who sold thousands of these to Mainland chinese in the 90s he would buy them at tax sale for 100 bucks a lot then sell them over there for 10 to 20k with the promise of Edwards airforce base and the "Space shutte creating the next LA.

Arizona:  has millions of Shadow plats and a very vigourous tax deed season.

New Mexico: as well

Then there is the above mentioned Florida.

If you live in any of these states tax sale investing can be very lucrative. We used to buy 200 properties a year in 3 counties in CA. however when tax sale investing went on line. Prices got bid up to high and we exited the market. In CA of course when you buy you own like a Deed foreclosure. As I stated above In the states that have the Tax Liens the locals pretty much know what the good properties are and they will bid down the rate of return. I have attended sales were large intitutional type bidders will buy rates down to 4 to 6% and buy millions of dollars worth in one day, however they have their staff there with their lap tops and they know what to bid on and what is junk.

Hopes this gives a little background that you may not get in a seminar trying to sell you their system.

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Thanks very much for that insight Jay, I will be taking your post into account when it comes time to decide where my hard earned will be invested!

Judith, you said you attended the Thomas Senatore’s Tax Lien and Deed training, would you recommend this? There seems to be a few online pakages for sale which arnt too expensive…

[your welcome just trying to give some background.. Do not want to make it seem us good ole amercians are letting great deals fall off the pumpkin truck.

And as more counties go to on line bidding for their tax sale tax deed. It will be come more competitive. However it will be easier to follow one that you may want to Quiet the title Or confirm the title which ever is applicable.

Its very intriguing to me to see such an interest from foriegners in our Real Estate and at the end of the day its a good thing more buyers keeps price stable and they may rise as well.

quote=cappy88]Thanks very much for that insight Jay, I will be taking your post into account when it comes time to decide where my hard earned will be invested! Judith, you said you attended the Thomas Senatore's Tax Lien and Deed training, would you recommend this? There seems to be a few online pakages for sale which arnt too expensive… [/quote]

Jay, in Florida there currently is no redemption period on deeds and unfortunately, some of the Counties that had gone on-line for lien sales have reverted back to the old system which is not helpful for out of Country purchasers.

I have looked at many of the programs available to teach tax lien/deed purchasing and am not excited by many of them.

[  My point exactly. As an out of country investor your darn lucky you got your money back much less a profit. There is no cream in these deals unless you live here and can due heavy due diligence period.

Please see my long reponse to how TAx sales came about and how the pro's in the US approach these.

No one is going to invest on line out of country and beat the locals, Just not going to happen. Of course you can buy all sorts of courses and the folks selling this info. The reality is those Lotion and Potion sellers are just that making their money selling retread info. Ask these guys to prove they invest in anything other than advertisements hotel rooms and books.

The investor from China who is retired and young is right on with his advice by the by.

quote=petejac1]More of an update and also something I learnt from the Arizona Tax Sales.

I had 4 Liens redeem in Arizona and received the cheques today, 2 of these actually cost me $10 in fees as they redeemed straight away, 1 I received $0.60, another $3, and 2 again cost me $10 each.

Look like I prefer Florida for the min of 5%[/quote]

Jay I find your comments amazing, do you realise what forum and website you are talking on?

I have been following Steve McKnight for at least 5-6 years and followed his different investment strategies for most of this time.  In regards to investing in Liens I know that he is directly investing his money into these liens as when I do my research on a particular Lien to purchase I have quite often seem Steve's name on the a different years lien on the Tax collectors website.

Yes some spruikers out there may not be trusted but I know Steve can and I am only commenting on my experience because I like to hear how other investors are going in regards to investing on Liens and as no one commented on this thread I thought I should start.

Jay, a spruiiker is someone who comes onto a forum offering advice and once accepted as someone who knows what he is talking about comes in for the kill offering services that many take up as they believe his services will be great. It is a great way to play on the weaknesses of investors who have neither the time nor the expertise to invest on their own.

Steve McKnight is someone who is at the top of the good guy list in Australia and is very well respected. His advice is always valued and he offers far more than services and has done so for many years simply because he cares.

Chief Wigam,

Exactly right. You can phone the County, speak to their Tax Collectors Office, explain that you want to buy Tax Liens and ask for a letter to support your ITIN application. Depending on the County, they will email one to you.

I have just done this last week with Lee County. They were very obliging, and sent me a letter the next day.

But that is the fast part. The application with the IRS will apparently take 8 to 12 weeks at this time of year (tax time).

Cheers, TH

Many counties are going to http://www.bidforassets.com to sell their tax liens and tax deed sales. Lots of wholesalers selling AS IS REO property as well. Many of these properties have 1k minimum bids and will routinely sell for 10k or less, Via quit claim deeds…. Most of the properties are beyond help and definatly not for out of country owners.

We have disposed of some of our REO's on Bid for assets as well.

Sorry,

http://www.bid4assets.com

You will find counties all across the US use this on line auction site to sell tax sales. Of course not the majority. However a lot of them in CA. As I am a west coast guy I have always focused on CA and WA. 

As in all things about US real estate BUYER BEWARE:  Or as we used to say in the good ole days Caveot Emptar.. this was actually part of our REal estate contracts back 30 years ago.

J