Real Estate Investing FAQ
You Question We Answers

This Real Estate Investing FAQ page has been built to answer many of the frequent questions that I receive. While I can not answer every question I can and will be posting new and interesting FAQ here periodically that pertain to tax deeds, tax liens, tax sales, tax certificates, auctions, foreclosures. If you have a real estate investingFAQ let me know, submit below.

P.S. There have recently been some Statute and U.S.C. changes which affects you. This is need to have information for tax deed, mortgage foreclosure and certificate investors.
Update To Info

Real Estate Investing FAQ
TAX Deed
Hi James. We're the ones you called and commended for being upfront about the lot for sale being a tax deed property. Is there a specific Fl statute about holding the tax deed prop 4 years and then being able to get title ins? Also, can we hire you to do title searches for us? We live in Vero and it's a long ride to Citrus County courthouse to do research. And now I'm concerned I may have overlooked some things before we purchased our lots. Thanks for the favor of a reply.

Real Estate Investing FAQAnswer
I was looking at the underwriting requirements for tax deed properties I received from an underwriter and came across the FL. Statute number specifically relating to our conversation.

So Stated in the underwriting requirements for issuance of title insurance,

The tax deed has been of record for less than 20 years AND there is any 1 of the following conditions:

• i. A conveyance from the prior owner by virtue of a quit claim or warranty deed;
• ii. The prosecution of a quiet title action pursuant to FL. Sat 65.081 in which all necessary parties are joined as Defendants.
• iii. The tax deed has been of record for atleast 4 years; AND

• (a). The underwriter is satisfied etc,etc,
• (b). There must be recorded competent, substantial evidence establishing at least 4 years of continuous adverse possession as defined in FL. Statute 95.191
• (c) The prior owner was not in actual possession of the property for one year or more following the tax deed issuance as defined in Fla. Statute 95.192.

Good Information is Contagious. PASS IT ON!

Real Estate Investing FAQAnswer
As a new tax deed investor I would avoid those tax deeds which: are issued against property previously owned or conveyed by Sky Development Group, have more than 6 parties of interest or owners listed in the Owners and Encumbrance report (applicable if quieting title), properties whose owners reside outside of the USA (applicable if quieting title), properties with federal or state liens.

Good Counties to look into: Charlotte, Orange, Duval, Martin, Citrus, Hernando, Marion, Okaloosa.

Counties to avoid due to either lack of online resources, huge cost in time and money per tax deed: Miami-Dade, all the smaller counties in the upper central region, Palm Beach, Monroe.

With the intent of immediate resell, you may consider hiring an attorney to conduct quiet title actions so the property can be resold with title insurance and warranty deed. A tax deed is not an insurable instrument of conveyance.

I hope this answers some of your questions

Real Estate Investing FAQAnswer
Thank you for the positive response. I do happen to have a few pointers:

1. Avoid properties previously owned by Sky Development Group. Many of the properties owned by them were conveyed by fraudulent deeds. Many of these properties are undergoing quiet title actions brought forward by the true owners whose property was conveyed without their knowledge. Buying tax deeds for these properties can lead to a great number of defendants in a quiet title action and a lot of headache. I believe Sky was conducting sales in Palm Beach County.

2. As a new tax deed investor I always advise you to set up a business entity such as an LLC, it is relatively easy to do and the cost is minimal, around $300.00 with Click and Inc. This can limit your liability in the event something goes wrong, seek legal advice.

3. If you intend to do a quick sell and will be utilizing an attorney to conduct a quiet title action, the standard fare is $1,000 plus expenses. Make sure you get an estimate of cost. I, when doing this, would premise the question as, what quiet tile action expenses are normal for a single property with 3 defendants all being in the US? The costs for the advertisement, clerk's fees, mailings should be consistent among the different attorneys you approach. The inconsistence will be if they use a paralegal for document drafting, legal courier or in house provider, do they appear telephonically or appear in person for the hearing. It is perfectly acceptable for the attorney to appear telephonically in a quiet title hearing.

4. Be warned, the time between the Tax Collectors ownership/encumbrance certification and time of tax deed auction can be months, so conduct your title search before bidding. I have site pages which can point you in the right direction in my Tax Foreclosure Info.

5. If you are new to the game don't attempt to do your own quiet title action, it can lead to a lot of aggravation and wasted time. I have known people who spent a year of time and a lot of money, only to have their case thrown out over and over again. One such person was attempting to represent himself while the property tax deed was in the name of his company. Can't self represent as a corporation in a quiet title action, only an individual can act as a pro se litigant in this type of case. In time you, after having a few attorney represented cases completed, will be able to follow the time line and document trail for conducting your own.

6. NEVER TRUST A SINGLE SOURCE FOR INFORMATION

7. Good information is contagious, pass it on.

Real Estate Investing FAQ Question: when you say $5,000 is a "high dollar" amount and $500 is "middle of the road", is that for counties in the middle of the state that might not have as high tax bills and face amounts as Palm Beach, Broward, and Miami-Dade, or do those numbers still hold true for these 3 counties? I guess same question as it pertains to your suggested target assessed values of $25k-$80K?

I need to sift through the Miami data from last year a little more although there were over $45,000 TLC so I don't know what I will really be able to determine. Do you have any data that shows the ranges of face amounts or assessed values that get eaten up by the institutions, or bid down low, or whether it's homesteaded properties or some other factors?

Real Estate Investing FAQAnswer
The difference between investing in Dade, Broward, Palm Beach versus a smaller less populated county really comes down to risk assessment. I prefer to allocate my risk over as many properties as possible while staying around the $500.00 per certificate rule. What you will find in Dade County is that there are few certificates available in that price range, due to the lack of vacant land. The certificates you do find in that range, won't be worth the risk or investment. It is not uncommon for property taxes in these counties to exceed $5,000 annually. If you do purchase a $5,000 certificate and it is not redeemed, when applying for the tax deed you may have to redeem 2 years of additional certificates. This equates to, officially out of pocket $15,000. If the property owners file for bankruptcy, it can really hurt. If the property becomes riddled with code enforcement liens, it can also hurt. You may have difficulty getting your money out. It just isn't worth the risk, in my opinion, to invest in this area for tax certificates. The old rule still rings true, less than 1% of certificate holders end up with the property after the tax deed sale unless they bid at the tax deed sale.

I would much rather be in a smaller county, not that surrounding counties are much smaller these days, but your net can be cast over more fish. With so many counties certificate auctions being online, it makes sense to seek out smaller counties. I find that in central Florida there are thousands of tax certificates to purchase that fall in the $500 category which are against property with a value around $25,000. Marion and Polk have a considerable number. Being safe while at risk, is really the name of the game. With the current revaluation of many properties through out Florida, your $500 will go farther than it has in the past few years. I own some lots in Marion which carried a tax bill of $1,000 annual per lot with assessments around $50,000 but in the last year I noticed that my tax bill has come down to $400 on these lots while the assessment has only gone down by 40%. So, these numbers, 25k-80k, $500-$5,000 are just my standing numbers, which change over time, but make for a comfortable and safe place to start.

Regardless of what county you are considering, if the property value exceeds $80,000 it will almost always be redeemed immediately.

In regards to institutional buyers of tax certificates, there is no rhyme or reason. They seem to buy at random and I really don't know what their criteria are. Don't waste your valuable time searching through data of previous auctions to find the hidden key, there is not one. Your time would be better spent shooting yourself in the eye with a rubber band, I have wasted a huge amount of time on tracking different aspects of tax certificate sales for years-all pointless.

I hope this information is helpful and answers some of your questions.

Reader Response
thanks so much I appreciate your insight. I see what you’re saying. I think for my first time I am a little more comfortable doing it in my own backyard in one or all 3 of the counties. The only county of the three with reliable data is Miami-Dade. Palm beach switched to Real Auction so Real Auction didn’t run their sale last year and doesn’t have the data and Grant Street shut it down when Palm beach left. Broward has been live until now so they don’t have on-line data either. Their IT guy did send me some raw data, and I glanced through it briefly and saw that of approximately 46,000 TLC’s last year, 3,618 were below $1,000 or 7.8%, 24,890 were between $1,000 -$5,000 or 53.6%, 13,702 were between 5,000-10,000 or 29.5%, and 4,199 were over 10,000 or 9%. I should probably bifurcate the 1,000-$5,000 a little more.

I guess, given that property values are relatively higher here, maybe target a minimum value of $50,000 versus your $25,000, and face amounts in the 1,000-$2,500 range. Does that sound out of whack? If I limit the face amount, not sure if it even matters what I cap the value at. Another way to look at it would be the lien to value ratio. Using your 500/$25,000 that would mean a max value of 20%.

A couple of other things you mentioned. When you say those over $80K almost always get immediately redeemed, that sounds like a good thing. With that statutory minimum of 5%, if they get redeemed in 30 days that’s a 60% annualized return. Also, while the higher certificates will require more out of pocket when you apply for the tax deed, your total outlay receives 18% until it’s sold which sounds like a pretty good deal as well. I wasn’t aware it could take that long to quiet title if it got to that point, although I knew it could cost a few thousand bucks. Someone told me that another option was some sort of specialist title insurance.

To mitigate my risk, in addition to what we’ve discussed , I was planning on focusing single family homesteaded properties which seem to have the highest redemption rate as well as other single family homes. Avoiding industrial, exotic, and probably commercial properties as well. I suppose sticking with first year TLC’s or at least those with a history of redemption and without more than one existing TLC.

I appreciate your help. I learn something new every time I read your site or receive emails. I can’t believe you offer that website for free. You should charge people something. It’s good info. Do you only bid in those central Florida counties?

RealEstateInvestingFAQJames Response
Your assumptions are correct, in regards to the numbers we have been discussing.

The $80,000 redemption statement may be a good thing it all depends on your objective. Either way, redemption or not, when you can make a good return with little out of pocket and limited risk-its a good thing.

Example: You purchase a county held tax certificate which has been held for 120 day. Your purchase amount will be the face amount plus the interest accrued, 6%. If the certificate is redeemed 30 days after the transfer to you your return would be the 1.5% interest accrued during your holding period, with reimbursement made for the face amount and interest paid, numbers are based on the 18% annual interest for county held certificates.

Example: You purchase a certificate at auction and your certificate is redeemed in 60 days you receive your 5%. You then go purchase a 1st year county held tax certificate and it is redeemed in 60 days add 3%.

So, with these examples in hand, if your county auction certificate purchase yields 5% and is redeemed lets say 60 days after issuance, and subsequent county held certificates yield 1.5% per month with an investment window of 10 months, your maximum annual return could be 20%. If, on the other hand, your first certificate isn't redeemed you are looking at a total annual return of what ever your interest bid amount was.

Thanks, Kim

Real Estate Investing FAQAnswer
Some specialty title insurance agencies advertise they can obtain title insurance on tax deeds in Florida. Conversations, with title agents, clerk of courts, underwriters, have all been the same. These insurers issue an affidavit and a certification that all parties were properly served but it does not purge the title of prior owners or parties of interest. So, the insurance issued by these agents’ corporate affiliates is not viewed as acceptable by many title insurance companies and underwriters.

One of our best clients came to us, after obtaining such insurance, and then paid our attorney to quiet the title to the same property. It seems client could not obtain title insurance through any local title agency when he had a buyer for the property. He informed us that the title certification disclosed that a quiet title action may be necessary, but after he had paid them. It was presented as a standard disclosure, so he assumed it was the norm not the exception.

Hope this helps.
Good Information is Contagious. PASS IT ON!

Real Estate Investing FAQAnswer
Hello Diana,
Congrats on taking the first steps to tax deed investing.

You can find links or info to all county tax deed auctions in Florida at my web site page http://www.floridataxsale-foreclosure-info.com/CountyGovernmentAuctions_Florida.html just locate your county on the map and click.

For Palm Beach County, specifically, they have a very nice online system so you can access the tax deed files, so you won't have to make an extra trip to view them. The site access for the tax deed sales and file viewing is at http://www.pbcountyclerk.com/oris/records_home.html Click on Tax Deeds, Accept, sale Date, enter in todays date, enter. When you locate a tax deed that is ready for sale click on view, when the page loads, click on other documents to bring up the owners and encumbrance report so you can view all the documents of liens and owners. If the file is unavailable it usually means that you are to far out from the date of auction and the document has not yet been prepared. Many potential problems, if any, can be located in the file.

For Broward, specifically, the Clerk of Courts has no direct link on their home page to the auction calendar or list, so see the legal ads in the Daily Business Review the page is at www.dailybusinessreview.com once the page loads click on Public Notices, then on Tax Deed Applications under Real Estate Info. You will need a subscription to gain access or pick up a copy of the Thursday edition locally. If I'm not mistaken Thursday is the day the ads for "Application of Tax Deed" are run, to make sure contact the Clerk's Office to verify.

Most of your Broward County questions can be answered by seeing this page at the Clerks Site http://www.broward.org/revenue/tda_faqs.htm The Tax Deed Files can only be viewed online one week prior to the sale.

Good Information is Contagious, PASS IT ON! PS-I received your message, thanks for the positive input for my site. I spoke to your husband, John, and will be calling you back shortly. Hope this info is helpful, James

There were two mortgages recorded on the same day, which one is the first mortgage? Both mortgages are from the same bank, I don't want to make the mistake of bidding on a property only to find out later that it was the second mortgage foreclosing not the first. As you stated, I would be responsibe to pay off the first if the second is the one foreclosing.

Real Estate Investing FAQAnswer
Jack, Thanks for the positive response. There are a couple of ways to tell which mortgage is first.

• 1. Look at the date, time and book/page number of recording into the official county records. The first mortgage will have been recorded first.
• 2. View the mortgage document, look at the bottom of the pages, if the loan is a mortgage insured by FHA, Fannie Mae, Freddie Mac, they insure first mortgages.
• 3. The amount of the first mortgage is typically the larger amount.

Good Information is Contagious, PASS IT ON! Hope this helps, James

I do have one question, I live in Ca now but will be moving back to NJ in a few months. Are Tax Lien sales run the same in other states? Ok two questions lol, if not do you know of any other informative websites covering them for NJ?

Real Estate Investing FAQAnswer
John, thanks for the positive post and review.
I don't know of any other informational sites such as mine. Please keep me posted, if you do find one please let me know so I can share it with my readers.

Don't know much about NJ but this should give you a boost in the right direction:
http://www.state.nj.us/treasury/taxation/index.shtml
http://www.townshipofhamilton.com/content/1681/default.aspx

Hope this helps, James

RealEstateInvestingFAQAnswer
Wade, thank you for the interest in my site and for sending your comment. I did discuss the fees for application (required to redeem other outstanding certificates, auction costs, fees)of a tax deed but failed to bring up this important fact. The opinion you have received is correct, current HX exempt status does require 1/2 of assessed value to be paid by the party making the application and is added to the opening bid at the tax deed auction. While it is an expense reimbursable upon sale of tax deed or redemption of the property certificate, it can be a huge out of pocket. If the property is not redeemed or tax deed purchased you may have a 40% equity in a property (based on 50% of assessment + 2% per year averaging 2 years of certificates you redeemed, + your certificate and cost).

If you have been following along with my tutorials you are also aware of the fact that this will impact very very few individuals.

As example, Palm Beach County where in 2006 more than 30,000 certificates were sold yet fewer than 100 tax deeds were auctioned and sold in 2008 with only 1, if memory serves me, being a developed parcel. Remembering that a certificate has to be held for more than 22 months and can't exceed 84 months without making application, most applicants hold their certificates for as short a duration as possible.

Further reducing the number of certificate buyers impacted, in your scenario, the home purchaser in most instances would have obtained the property by warranty deed with title insurance. Prior to title insurance issuance, a binder for title would have been prepared and disclosed the outstanding certificates. Before title insurance would have been issued the certificates would be redeemed. If the new owners were obtaining financing, a prerequisite of obtaining the mortgage would be redemption of the certificates outstanding.

Regardless of the numbers impacted, an important fact was left out. The goal of the site is to disclose information, and you have brought a new piece forward. Thanks again for bringing this to my attention. Good information is contagiuos, PASS IT ON!

While the info I'm adding/suggesting does/would impact very few certificate holders it is a real possibility. The out-of-pocket and potential investment in redeeming HX certificates is worrisome.

But, from my perspective the regulation/interpretation regarding "most current assessment" dictating the status of the deed application has the implicit potential to be a major problem with just about any certificate bought. Florida has a loooong history of unqualified sales and a savvey owner has a loophole here you could drive a Mack truck through. I wouldn't know how often this comes up but do know even in our little county (Madison) there's one this year. Basically this interpretation of "most current assessment" says to a certificate buyer "you may be buying a non-HX certificate but it's just your tough luch if the property goes HX before the end of 22 months."

Example: #1. Unwitting bidder buys a certificate on a non-HX rental. Holds it 2 years. Goes to the clerk (or assessor) and learns - guess what - that property is now HX. All it takes if an owner is looking ahead and knows what's down the road, is for him to execute either a totally unqualified sale and/or hold his own mortgage sans all the usual good stuff of title searches, surveys, etc.. He's's now transfered to a buyer who can/did apply for HX. This scenario doesn't get the property owner "off the hook" but still $^&%&'s the certificate holder and may delay the deed application because of the stiff costs/investment.

#2 Unwitting bidder buys a certificate on a vacant lot/parcel. Property owner sells lot for cash (again no title ins - not uncommon in rural FL). New owner puts a mobile on the lot and applies for HX. Whether he bought the mobile for cash or financed it -most MH dealers just require a deed and look no further - it really won't matter - again the certificate holder is )&))**.

Have you followed the certificate auctions this year? The counties look to be in for a tough road as in the dozen or so auctions I've followed (most non-metro) sales have been absymal (and rates at the top - great for we buyers).

Best & keep up the good work.
Pat

Real Estate Investing FAQAnswer
Pat, thanks for your positive response and input, input is the backbone of growth for my site.

Absolutely, it is a risk but I can say with certainty that in Citrus County there has been 5 homestead exempt properties sold at the tax deed auction and 7 in Marion over the past 6 years. While this doesn't absolve the fact that there may be others which aren't brought up for auction due to the cost, it is an indicator of the low numbers we are talking of since there were in essence tens of thousands of tax certificates issued over that time frame. There are typically a small percentage of homestead exempt certificates advertised for the tax certificate sale but these are usually redeemed quickly.

In my opinion, there are few investors which have your knowledge base on this issue and even fewer home owners. I'm sure there are home owner out there which will use this as a loophole to deter certificate buyers but with considerable equity at stake it would not be wise to play with fire.

The real problem would be if the property owner filed for bankruptcy after the application was made. OH NO, the certificate becomes unenforcable after your big lay out of funds and it is at the discretion of the trustee as to wheather the tax certificate is redeemed or a payment plan established for repayment of the taxes. I really don't know the full implications of such a scenario. I haven't seen or heard of this happening and the probability of this happening would be as likely as shooting yourself in the eye with a rubber band but I would like an outside opinion. Sometimes hearing a voice louder than your own is necessary and welcome.

Off Point but interesting point I just thought of that you may enjoy.

A few months back, I found a first year tax certificate being sold on ebay. Curious as I am, I researched and found that the face amount of the certificate was less than $70.00. The annual tax bill for the property was around $3,000.00 for a home which was homestead exempt. It seemed the owner shorted the tax collector and a certificate was issued for the balance owed. The ebay seller purchased the certificate from the list of county held certificates, as memory serves, and paid the nominal transfer fee and costs. This ebay seller set forth a beautifully illustrated picture of property ownership on ebay. It was a nice rosy picture indeed and raked in over $1,200 for the certificate with a $195 transfer fee. The ebay purchaser will not know the impact of the purchase for another 18 months from time of purchase.

I have also been disturbed by the number of vacant land properties auctioned on this site which are conveyed by a special warranty deed due to seller's interest being a tax deed. One such property had a $87,000 Federal lien. There could be some real issues for the buyer and we have met many tax deed auction purchasers who intent to sell their interest "the property" on ebay without clear title. If that weren't bad enough, I have looked at the recorded conveying special warranty deed and have found many are faulty in that no warranty of any means is offered due to the poor wording used in the conveying document. In an attempt to undo some of the wrong doing I have run ads of warning on ebay but fewer than 5 people looked at my last posting, while the above noted tax certificate seller received more than 40 bids.

Back to point. The loophole effectively could deter tax deed applications from being made but will effect fewer than 1% of certificate holders, the other 99% of certifcates will constitute a very real and positive outcome for the certificate holder. I'm sure you are aware of this as you are yourself a tax certificate purchaser.

Great time for tax certificate buyers indeed. With lower than expected turnout of potential bidders, it definitely makes 18% easier to achieve.

Knowledge is power and thank you again for the wonderful points and information you have contributed.

Good information is contagious, PASS IT ON!

Reader Response Hi again James
FYI - for just a few of the Real Auction (I prefer their search features over Grant St.) "preliminary" results for sales of their certificate sales this year:

• PUTNAM 15791 total certificates, sold 4332 - 27% (they extended the auction an additonal day
• GADSDEN 2547/1606=65% sold
• COLUMBIA 3587/1861=52% sold
• SUMTER 2090/1031=49% sold
• TAYLOR- didn't get original total #'s but they continued the sale an extra day with 1474 "left overs" of which they sold 674 (46%)
• WAKULLA, again I don't have original total # or sales, but they sent out an after-auction list of 1701 unsold certificates asking folks to buy from the tax collector.

Two counties I know of did well: GILCHRIST sold 93% (1089/1011) and SUWANEE sold 95% (3055/2893).

Your reference to the problems (and potential these days) of bankruptcy affecting HX certificates is right on the mark. It would seem possible it could also affect corporate/developer-held vacant properties as part of their assett portfolio. The chances of a court either setting aside or reducing the interest on those certificates would seem quite good. On the other hand I'm not sure I believe the courts would protect the run-of -the-mill "investment" properties (or affect their certificates) such as second homes, rental properties, ag land, etc. I wish I could share better info with you on the bankruptcy issue but I, too, am short of info here. While I find a lot of reference to the problem I don't find a lot of explanation or detail and am no expert in bankruptcy law.

Re EBay sales I believe the seller you refer to is still at it. While I look at RE there it's rare to find anything but dogs and yes, a lot of scammers. Unfortunately EB doesn't hold a candle now to it's "good old days". You use to be able to sell easily, at good returns and reasonable overhead costs. I moved a lot of antiques back then.

RealEstateInvestingFAQJames Response Pat, thanks again excellent points.

With our combined expertise on this subject matter, we still don't have all the answers. No one really does regardless of their blog posts.

I wish my knowledge of this small but riveting point could be better expanded.

I ask of my Reader's who are following this page, have you owned a tax certificate against a homestead exempt property whose owners filed for bankruptcy? If so, please let me know. I never disclose or use personal information for a use other than its intended use, so you won't be getting follow up e-mails from me trying to sell you something. I'm trying to save up my flashy banner ad things and large font hype for later use.

This email is in response to the question posted on your emial page.

I have been investing in tax certificates in South Florida for the better part of 20 years and I have never had a property on which I was holding the certificate convert from non exempt to homestead exempt status AND had possession of the certificate for the two years required to apply for the tax deed AND have the misfortune of owners filing for bankruptcy after application and before auction. This feasibly could happen but the probability of it happening is remote.

In my opinion if this were to happen,

A. The certificate would be unenforceable upon owners filing of bankruptcy, as you suggest

B. The Clerk of Courts would return your application cost including the 1/2 of assessed value because the property could not be auctioned

C. You would be in ownership of the other outstanding certificates which are also unenforceable

D. It would be at the discretion of the bankruptcy court as to the outcome of the certificates. I think the courts would exercise a payoff plan.

Real Estate Investing FAQAnswer
Mr. Gonzalez,
thank you for your time and response.

Your information is a welcome addition to our efforts. Though this a remote possibility, it is the intricacies which intrigue me.

Good information is contagious, PASS IT ON!

Have a good day

Real Estate Investing FAQAnswer
Hurley, thank you and excellent. Your response goes directly to the heart of my question. Just for clarification, a bankruptcy filing does not remove the certificate, this I know. As stated in my Q & A, "I really don't know the full implications of such a scenario." This was the reason for posing of the question to my readers. I thank you again for your contribution, and please let us know the outcome of your Broward dispute and opinion findings.

Reader Response Hello again James,
Regarding the tax deed with a homestead.

The tax certificate holder does NOT have to post one-half the homestead value at the time of applying for a tax deed . The money would only be due if the certificate was not redeemed before the sale and there were no bidders at the sale and the tax certificate holder was left as the only bidder. Consequently all the chatter on the web site about bankruptcy is not applicable in this case.

The tax certificate holder also has the option of refusing to pay the additional funds and the property then has to be redone in the next scheduled sale.

If the P.A. in the County where the certificate is purchased has been doing his or her job then you would have obtained a property with some type of a residence for ½ the assessed value which should be less than half the market value as most P.A.S reduce market value 10 to15% to cover “cost of sale”

On top of that it is very unlikely that some poor tax payer is going to spend money on a trailer live in it and file a hx so that he won’t loose his investment to a tax certificate.

Real Estate Investing FAQJames Response
Thank you again for your excellent points, input and time. I have received a lot of e-mails in regards to my recent Q&A page postings about homestead exemption consequences, some in agreement and some not. With the website objective being to bring the best information forward, I will be searching the Florida Statutes and making some calls today in hopes of creating some clarity on the issue. My comments are based on my personal knowledge and notes/logs entrusted to me by family and friends. Your voice has been heard and is the cause for my further research.

Real Estate Investing FAQJames Follow Up

Through conversation with my contacts at varying county offices, examination of the DOR Ruling 12D-13.063, examination of F.S. Chapter 197 and specifically statute 197.502 I have concluded the following:

Final Opinion of the Florida Department of Resources will be upheld, links for DOR opinion provided at bottom. I give great weight to my county sources as they have provided information to my family for many years, and they are in the know, enforcing and carrying out the rulings of the DOR.

In the past, current, but not so in the future:

The posting of the 1/2 of assessed value for homestead exempt properties, at the time of tax deed application, is at the discretion of the counties. Counties may require posting of the funds by the certificate holder at time of application. Other counties do not, but instead add this at the time of auction whereby it is added to the opening bid at the tax deed sale. If the property receives no bids at the tax deed sale and the county did not require prior payment of the 1/2 of assessed value, the certificate holder will then be required to post that payment and subsequently be issued the tax deed or the property may be entered into the List of Lands Available For Taxes or the property may be reauctioned at the direction of the certificate holder. If after the second auctioning of the tax deed, no bid is received higher than the opening bid, and the certificate holder further refuses to pay the 1/2 assessment the property is entered onto the List of Lands. If a winning bid is received at the time of tax deed auction the winning bidder, upon consummation of the transaction, would be responsible for the payment of the 1/2 of assessed value, if, if the county does not require it pre auction of the certificate holder.

NOTE Interesting point, if the property is entered onto the list of lands, the tax exempt status is voided. Therefore, theoretically, you could pay less for the property on the list of lands than at tax deed auction, if you waited until the following tax year to purchase the tax deed. You wouldn't be required to pay the 1/2 assessment due to the fact that the following years "current tax roll" would not include the homestead exempt status.

"The authorized determination and discretion inherited by the county is the result of indeterminate language within Florida Statute 197, as to the counties fiduciary responsibility in collection of funds as required of this department and in protecting this counties citizens." I have been informed that there have been numerous conversations between the DOR, Tax Collectors, Clerk's and the counties attorney's in regards to the point we are discussing here.

In reference to the above noted, "poor tax payer" unlikely scenario, you are correct but I can think of scenarios where it would be likely, i.e. non homesteaded 2nd home is at risk owner moves and applied for exemption due to home being unrented and vacant. If the homeowner knows investor will have to come up with 1/2 of assessment and prices are decreasing, it would deter many from purchasing the tax deed.

A special thanks to Clayton, Michelle, Tyler, Hurley, Jose, Mr. Gonzalez and Pat for your input and time.

Jacob, WWII vet, former investment fund executor, good luck best wishes and thank you. Input through phone conversation, In 1987 the Franklin County Tax Collector required me to pay the 1/2 assessment, I owned the tax lien. The property sold at the deed sale so I was issued a check for my investment plus the interest earned.

This is the end of discussion on this point at the current time.

Good Information is Contagious, PASS IT ON!

Next Real Estate Investing FAQ Page

Home