tax links
In a tax lien state, the next tax sale notice is in the classified section of the local legal newspaper. Keep in mind that investors are bidding on interest rates and not on the property at these auctions. The investor who accepts the lowest interest rate wins the certificate.
Florida law provides that a “tax certificate” is a legal document representing unpaid delinquent real property tax, non-ad valorem assessments, including special assessments, interest, and related costs and fees, issued pursuant to this chapter against a specified parcel of real property and becomes a first lien thereon, superior to all other liens, except as provided in s.197, Florida Statutes.
It depends on how long the investor owned the tax lien certificate and the interest paid by the state. The investor will be paid up to 50% when the owner decides to pay the delinquent tax.
Depending on the state, if the delinquent taxpayer does not pay, the investor may request a tax deed or title deed.
Some states will have a second tax sale where the property is auctioned off. When an investor purchases the parcel, he will have to release the liens by paying back taxes and interest before he can take possession of the property.
Each state has the right to pass statutory laws to administer how the collection of unpaid taxes is carried out. Be sure to research which state fits your investment needs.
Tax certificate states include:
Alabama, Arizona, Colorado, Florida, Illinois, Iowa, Kentucky, Maryland, Michigan, Mississippi, Missouri, Nebraska, New Hampshire, New Jersey, North Dakota, Puerto Rico, South Carolina, South Dakota, Vermont, West Virginia, and Wyoming.
Having a lien on property will not prevent you from giving title or ownership of your property to someone else. Keep in mind that it will be difficult to sell your property.
A lien is attached to the property, not the property owner. The lienholder has the option to take steps to legally enforce the payment at any time. Unless the property owner has the money to pay the lien holder, they have no choice but to sell the property.
The order in which the debt must be paid is based on the date the debt was recorded at the local county office. The good news is that anything that has no effect on real estate taxes, Tax Lien takes precedence regardless of when it was filed.
The tax lien will always be higher than all other liens, regardless of the date and time of record. When a property is sold to pay all liens, the first lien recorded is the first lien paid, taxes have a first lien position. Yes, even over a mortgage! This is incredible news for us investors.
Tax Deeds
If your interest is in obtaining the properties, you should consider how you will research the parcels before purchasing them. Ideally, you may want to view the property first. What you see is not always what you get with these properties.
Then consider how much the cleanup will cost you. What do you want with the property after you have it, do you want to sell it or rent it? The choice is yours. Narrow down your state that favors your strategy, such as Arizona, Colorado, and Maryland, be sure to check current state law before investing.
Check the foreclosure rate. If the foreclosure rate is high, it is a buy signal. Take into account the type of property you are interested in buying, a fiscal deed or a fiscal certificate, they are pros and cons of each property.
Residential: it is my favorite, most in demand, greatest opportunity for appreciation, easy to sell, closer to schools, shops and churches. Stay away from the bad part of town, drugs, gangs and robberies that would make it difficult to sell or rent.
Commercial properties are harder to sell. You look for higher taxes because they are worth more, if you decide to invest in this type of property and rent it out, be sure to set up legal protection in case someone falls and tries to sue you.
Stick to residential real estate in neighborhoods where property values are appreciating and in counties with little to no competition.
