Record 58,000 tax liens in Lee County, FL. Post 87

58,000 parcels tax delinquent in Lee County, FL

news – press.com 5/11/2008

Property owners this year failed to pay taxes on time on a record 58,000 parcels in Lee County, totaling more than $150 million in unpaid taxes, an indication of Southwest Florida’s floundering economy.

That means taxes on almost 10 percent of all parcels in the county are delinquent.

“That is staggering,” said Mike Hagen, a former Lee County appraiser turned owner of TaxCuts1 Inc., in Fort Myers. “What it tells me is real estate values have tanked; people are hurting.”

That means delinquent tax dollars are up 211 percent in two years.

Many delinquent properties are vacant…

Unpaid taxes combined with other telltale figures to reveal the economic slump in the area. The median price of an existing single-family home has fallen 34 percent since December 2005, from $322,300 to $212,500 in March, the last month available. More than 15,000 foreclosure actions are pending in Lee County circuit court.

“I have plenty of friends right here, they lost their job and can’t find another one, I have three that have lost their homes already,” Belisarius said. “It’s tough. Real tough.”

See the entire article: http://www.news-press.com/apps/pbcs.dll/article?AID=/20080509/RE/80509084/1076

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Coach Mitch’s REFLECTIONS

It’s tough out there

These days, financial destruction is a typical scene in many counties. It is horrifying! The saddest part is that virtually none of these folks did real estate speculation. They just had some bad luck and they are losing their home.

I have several of clients who were speculators in new construction and they have been caught in this absurdity. They have seen their equity lost and their savings drained, trying to pay for an investment home that is not selling.

Eight months ago, I had given them my opinion in the strongest terms that they should sell, even at a small loss, if need be. Now they are facing very large financial losses, foreclosure, ruined credit, loss of stature, self-deprecation, family stress, – financial destruction.

We must know when to cut and run

Sun Su, that great, ancient Chinese general, in The Art of War, suggests that when your forces are small, you should avoid large scale battles.

When you do not have large financial resources, do not take on the banks and the local economy. Even if you do have significant financial reserves, why would you throw good money after bad? Every gambler and investor knows that is a very bad bet. Sell. Take your loss and move on.

I have done so several times. Not with property, but with tenants. I have made the determination that the tenant was too much trouble and I let them out of the lease and bid them farewell. Several times, I have not even pursued them for damages. I just wanted them out of my life – period. Thankfully, I had put myself in the financial position to do it.

Purchasing cheap is the answer

Just imagine if those investors had purchased their investments at $0.50 cents on the dollar, instead of at $0.85 cents on the dollar or more. Even though the local real estate market has dropped 35%, having purchased at 50% of market value, they would still be viable. Buying very cheap is the lesson to be learned here.

I can’t emphasize it enough

Yes, over the long term, government induced inflation will make your real estate asset rise in value. However, you must make it to the long term. What if something happens, in the short term? If you have paid too much, then you will lose. It is that simple.

10% – 20% ROR isn’t enough

We have been inculcated with the stock market, where returns of 8% – 10% are a big deal, or the bond market, with its “safe” return of 4%. If you are Bill Gates, sitting with billions of dollars, then these returns are OK. The Law of Big Numbers works in your favor when you have a large enough base.

Coach Mitch’s Investing Rule #1:

If you are only working with a relatively small amount of money, then you must only invest when: 1) you have a sure thing, and 2) your Rate Of Return is very large. I do not even look at a property unless I can make a ROR of over 200%

200% ROR???

You bet. 200% ROR is very achievable if you are getting a property for 10% of Fair Market Value and you sell it at 80% of FMV in a short period.

Example

Let’s say you got a piece of land for $300. Add in $200 for marketing for a total cost of $500. Let’s say you sell that parcel for $10,000 in three months. What is your ROR? Well, you made 20 times your money. That’s not 20%, that’s 2000% ROR. Additionally, you sold the parcel in three months. We look at interest as an annualized number. Therefore, multiply your 2000% by 4, totaling 8000% ROR!!! WoW!

Now, I agree that you did not make a $50,000 profit, but you made a nice profit and you had no chance of losing. That has to count for something.

Coach Mitch’s “Ridiculously Simple System…” is the system that can propel you to significant profits. Tax Delinquent Real Estate is the sure way to make the profits.

See Coach Mitch’s “Ridiculously Simple System…” ™ for details.

Take advantage of the times,