Florida RealEstate4PenniesThere has been much hype in recent years on purchasing Florida RealEstate4Pennies on the dollar through the acquisition of tax liens "tax certificates" but here is the truth. In Florida, yes you can most definately locate and purchase property for 30-50% of value but it is not as easy at many claim and it usually doesn't come from the ownership of tax liens. In fact, our average is closer to 70% of value on most of our land purchases and none have come from ownership of tax certificates. In the past 10 years we have only had 6 properties which produced triple digit returns. Skeptical, don't believe me, here's some proof. A common Florida RealEstate4Pennies on the Dollar misconception: If you own the tax lien "tax certificate" you can foreclose the lien and own the property, therefore purchasing the RealEstate4Pennies on the dollar. This is a falsehood on many fronts that the gurus want and need you to believe, so lets start the dissection. Nearly 90 percent of tax certificates are redeemed within the first 2 months, with the minimum interest earned being 5%, that is a significant gain by itself. This minimum applies even if the certificate is redeemed the day after you purchased it and remains in effect until such time that interest earned exceeds it. The exception here is that you did bid less than.0025% (one quarter of a percent), if you bid more than that the minimum applies. This is the reason many banks and large institutions purchase tax certificates and are willing to bid down the interest so low it is not of interest to investors. The good news is that there are so many certificates available they can't purchase even a small percentage of them. Example: Marion County 2008 20,000+ certificates were advertised. The most likely of outcomes from ownership of a tax lien is a superb return in the form of interest earned. Tax certificate auction bidding begins at 18% and is bid down. After the certificate has been held for 22 months application for tax deed can be made. The application process requires the applicant to redeem all other outstanding certificates and to pay court fees. So if your one certificate is equal to 3% of property value the redemption of usually 2 others means you are up to 6%. The result of your application for tax deed and redemption of other certificates is a tax deed auction. At the tax deed auction its off to meet the sharks. Valuable property does not go unnoticed at the tax deed auction. I have seen as many as 300 people in attendance at a tax deed auction with 60 bidders. If no one bids at the tax deed auction you will indeed have obtained the RealEstate4Pennies on the dollar, right? Well not exactly. In the event no one bids at the tax deed auction and the property is homestead exempt, as of the last tax roll, you will have to reach deep in the pocket to pull out 1/2 of the assessed value and post it with the Clerk of Circuit Courts. If the property isn't homestead exempt, which is typically the case as 95% of property tax-deeds conveyed are for vacant land, then you have obtained the RealEstate4Pennies on the dollar, right? Well not exactly. The prior owners and parties of interest (mortgage holders, lien holders) still have a recorded interest in the property. To remove those "clouds of title" you must hold your interest "tax-deed" unchallenged for four years to cure your title and pay taxes OR complete a quiet title action. OK, so after the quiet title action is completed you will have obtained a nice piece of RealEstate4Pennies on the dollar? Well, not exactly. If there were superior liens at the time you obtained the tax deed, you may have inherited them. Lien holders and parties of interest including the prior owner can make claim to the auction overage if there is any and it is allocated in accordance to superiority. But, if you were the certificate holder and no one bid at the auction and the property was not homestead exempt, there is no overage for them to claim. So, if superior liens exist, you will have to negotiate or pay for their satisfaction. So you really can't get Florida RealEstate4Pennies on the dollar? That is correct, but sometimes a rare gem will fall upon you and it should be savored as there are few to be found. The true nature of tax certificate investing is to gain interest. If property ownership is your desire seek tax deeds. I find that less than 1% of certificate holders are issued tax deeds to property unless they bid at the tax deed auction. Nearly all of the tax deeds conveyed are against vacant land due to mortgage holders will come forward and pay the taxes before losing their right to collect on the mortgage. Florida RealEstate4Pennies On The Dollar-the truth. Both tax deed and tax certificate investing can be very lucrative, you just have to know where the investment is taking you and pick the one that is right for you. Back To Realty News Pre Foreclosure Article No RealEstate4Pennies Hype, Real Investor Information TaxLienAnswer Florida Deed Lose Money Largest Florida Real Estate Scam and its affect on tax deed investors.
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