Advice in Florida

[Steven Paul]

Hello, I am a new investor in the Tampa, Florida area, I am in college and am planning to start out with tax deeds. I am looking for fellow investors in my area who have gotten past the early stage of investing and would be willing to give a new investor some tips for this area of the market. Thanks in advance

[David Dey]

Originally posted by @Steven Paul:

Hello, I am a new investor in the Tampa, Florida area, I am in college and am planning to start out with tax deeds. I am looking for fellow investors in my area who have gotten past the early stage of investing and would be willing to give a new investor some tips for this area of the market. Thanks in advance

Hey Steven

Tax deeds can be a very lucrative area of real estate to deal in.  We took on over 200 tax deeds last year using a unique approach. 

What I assume you are looking to do is buy them at the auctions.  As such, the most important thing to do is research, research, research!!

Every month or so, the county provides a list of properties that will be selling in the coming month.  Most counties in FL are on realauction.com, Hillsborough isn't.  You will have to get it from their site at

http://www.hillsclerk.com/publicweb/td_sales_information.aspx

There are 2 things to realize is that if you are bidding at the sale:

1)  you will have competition.  Right now, with the market being quite hot, people are bidding premium prices, even on tax deeds.  So make sure you don't fall into the auction trap and find yourself bidding higher than you can justify through your research.

2)  Chances are there is a reason that the homeowner, and or lender has abandoned this property to the tax deed.  Many an unseasoned investor, (and some seasoned ones too) have found themselves caught in a trap with a property that has either physical, or title issues, that can not be resolved and leaves them holding the bag. 

I came across a deal recently on the open market that seemed like a goldmine on the surface.  It was being sold for almost 70k under tax value, in a great part of town.  It had been bought at tax sale, but the owner wasn't looking for more than a 5-10k profit from his purchase price. (and this was after doing a quiet title on the place) 

I spoke to him and was actually excited about this opportunity.  We scheduled a time to meet after the weekend, but I was so anxious I decided to head over and peek at it prior to the meeting.

When I got there, I was even more excited.  It looked great!!  And peeking through the front windows revealed that the living room and what I could see, needed very little work indeed. 

So to the back I went, and then deflated.  I now knew why the property was selling at such a steep discount.  The entire back half of the house was sagging,  the blocks had cracked as the foundation had given way and you could actually see the wall leaning out at almost a 30 degree angle.  I'm was surprised it was still standing.

No doubt this investor had done most of his research online, but there is only so much that google maps and Zillow can show you. 

I'm also currently selling a gas station, on the East coast of Florida, that a CA tax deed fund had bought without all the facts, and has ended up spending thousands and thousands of dollars in EPA issues for leaking gas tanks.  (That will put a bite into your profits)

Now I'm not trying to scare you away from investing in this very lucrative area of the industry, however, I want you to do your homework and not cut corners.  This is called investing for a reason.  You have to invest, not just money, but also your time and effort into making sure you actually have a good investment in the first place.

OK, enough of the soapbox speech.  Here's a quick proactive tidbit that can make you a truckload of money.

When you get the list of properties for the upcoming tax deed sale, there is nothing in the rule books that says that you can't track down the owner and buy the property before the sale date, thus saving yourself the issue of having to compete with the crazed masses. 

I usually pick up at least one or more properties before the sale each month, and at a very steep discount as well.

Hope this helps.