Fast Talking Tax Lien Sellers Post 217

Craigslist:    FL Tax Lien On Sale  10/7/2015

Legal Notice — Florida Tax Lien Sales — Daily News

You can invest in tax lien certificates from anywhere in the world.

When you own a tax lien certificate, you have a certain right on the property, but you don’t own the property yet.

Tax year is 6/1/2009 of the tax lien certificate (TLC). This is a priority lien which supersedes all other (junior) lien holders. The holders of the first lien can initiate tax deeds, application and sale (TDA).

Parcel ID Number is: 132823-077000-004082. Face amount is $947.68 on the record. Interest rate is 6.5%. The amount of the tax lien certificate was $1250.54; this is the amount that the company had paid for the certificate. The company is now selling the TLC at $1200.54. There is a $50 instant equity of the TLC. The current amount on this certificate is $1,256.79 and the interest is still accruing.

The 2 years redemption period has been passed. The TLC can be foreclosed at anytime. $7721.31 (back taxes) is the amount that is needed to foreclose on the property. The process is called Tax Deed Application. Please ask Polk County for the current foreclosure rate. The result: You are either going to get the property for “pennies on the dollar” or the tax lien certificate is going to be redeemed at 18% interest rate prior to the Auction.

The C2 Commercial Lot (0.07 acres or 3,049.2 square feet) is located at 409 Quincy Street, Lakeland, FL 33815 (images attached). According to Google Maps, the GPS Coordinates are: 28.0542154,-81.9608985. The FL land value is going up in general. The FL C2 Commercial Lot is a pre-approved for a 56K commercial real estate property.

This certificate expires at 6/1/2017. Do not delay. Buy Now. 

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Coach Mitch’s REFLECTIONS™

Walk Fast Past Fast Talking Tax Lien Sellers

If you do the smallest amount of due diligence and use the tiniest bit of common sense, then you will see that not all Tax Lien Certificates, TLC’s, are Pot’s O’ Gold!

Goto see this property on Zillow, and you will see several nearby lots that sold for very low prices, e.g. $2900., this lot is in a better neighborhood and is smaller; $4500 this lot is significantly larger, has nicer land and is in a better area. Other lots, selling for higher prices, $10K – $40K, are on water, are larger or are in genuine commercial areas. IMHO this lot is worth $0.00!

Price History

DATE        EVENT                       PRICE
09/02/15  Listing removed  $10,000
05/07/15  Price change              $10,000
04/24/15  Listed for sale           $1,250      $1 Owner

Typically you must be the owner in order to list a property in the MLS. I’m guessing, but the TLC holder may have gotten the deed for $1.

This idea is credible because the Listing Price is $1250., the same amount as the TLC. It may seem nonsensical to you that a seller would give away their property, but a student of mine just got his first property and the owner said, “Just take it.” I have seen it happen many times. I got a property for $100 that I sold for $89000. It does happen.

You must understand the circumstances

This property already owes about six years of taxes. My guess is: $1200. taxes X  6 years = $7200 total taxes + interest + fees = $7721.31 total back taxes owed.

Do you see the problem?

A comparable property but in better location sold for a whopping $2900. and just the back taxes owed on this property are $7721.

How is anyone supposed to make a profit on this property? I don’t understand how anyone can make a profit let alone get the property for “pennies on the dollar” as is advertised?

In addition, all you are buying is a TLC, not the property. Yes, the sellers are selling the TLC at a discount. Why would they do that? I think I can guess! The TLC owners realize that they have thrown away good money after a bad TLC and they are looking for a greater fool than themselves to bail them out.

Lets pretend You are the “Greater Fool”

You start a Tax Deed Application, which costs several hundreds of dollars. There are still so many mortgage and tax foreclosures that it takes Polk County about 12 months to do an auction, more than enough time for prices to depress as the economy continues to languish.

The big tax deed auction day comes. As the senior lien, you open the bidding for your lien amount, i.e. $1250. However, the state of Florida requires that the opening bid be the amount of the outstanding taxes, $7721.31.

What happens if there are no other bidders? And why would there be? The other TLC holders should realize that their TLC’s of about $1200 each is thrown away money, so why throw away even more money?

Therefore, you could be left with the deed, but in order to get clean title you must pay off the other TLC holders in full, that means with interest.

BTW, if you did buy this TLC and if you decided to not do a Tax Deed Application, then the TLC will automatically expire as worthless in 2017. Florida, like other TLC states, has an expiration limit of seven years within which time you must sue for the deed or the TLC  goes null – it disappears – just like your money!

Lessons

1. Can you see why the owner would be desperate to be out of this property? There are many desperate owners.

2. Can you see why the owner would “give away” the property for $1? There are many who don’t know what to do in difficult real estate situations. This is when your REI education pays dividends.

3. Can you see that you must do due diligence before jumping into a tax lien or a tax deed? Other posts give other examples.

4. Can you see that there are plenty of wannabe’s who have bought into the tax lien hype – to their detriment? I’m glad you’re not one of them.

The Moral of the Story:  When TLC hunting, keep your wits about you and watch out for Fast Talking Tax Lien Sellers. But…

If you want to be safe and profitable, then see Coach Mitch’s “Ridiculously Simple System…” ™ for details.