Note/Tax lien purchase: Where am I going wrong?

[Michael Randle]

So I have been researching the idea of Tax Lien and notes and for ease of gathering data I have been using Miami's city run website that lists all the past due tax amounts. I am just trying to feel out how the process works and I came across the following situation and as the old saying goes (if its too good to be true...) this looks too good/easy. Where am I going wrong in my thought process here?

https://bidmiamidade.com/main

Account #:

3122020444010

Listed as Oceanview condo: 19390 COLLINS AVE UNIT: CU-O Sunny Isles Beach, FL 33160-2200

https://www.miamidade.gov/propertysearch/#/?folio=...

The lien is listed at $21.94. Yet 1/1 condos at around 1k Sqft are going for $240,000.00 (https://www.redfin.com/FL/Sunny-Isles-Beach/19390-Collins-Ave-33160/unit-1504/home/43318747).

So why would I not grab that lien, drop $200,000k into the condo, and turn around and sell if for $240,000 and make $40,000k?

There has to be some sort of huge obstacle preventing people from doing this that I am not seeing.

Help educate a newbie Note/Lien learner by pointing out what I am missing.

Thanks!

[Account Closed]

I believe Florida is similar to a few states I invest in.  With relation to tax liens, I currently have a couple in Arizona.

I purchased the liens after the auction (some juridictions have leftover liens that if they aren't won at auction, you can purchase outright - earning the highest level of interest available...18%).  A few years ago, I purchased multiple liens against the same property owner, as well as a couple of others.

Last year was the first year I was eligible to redeem those liens (after the 3 year statutory period).  I contacted an attorney and we started the foreclosure process on three liens.  One was redeemed...I received 18% interest less the processing fee and my lawyer's fee for the noticing process.  I lost money.  The other two went through the full foreclosure process - I was able to buy two building lots for about $3,300.  Similar lots in the area are currently available for $5,500.  The two I acquired were previously sold for $9,500 in 2006 and for $17,500 in 2005.  The 2008 recession hit these lots hard.  Annual property taxes are about $65 per year so they are worth holding on to until they sell.  The two lots were owned by the same person who after foreclosure, got his back end in gear and paid the liens off on the rest of his properties - so without noticing, I got 18% interest (less the service fee) on three other lots plus my principle back.

This year, we sent out noticing on one lot.  No response.  The lawyer was paid his retainer to start the foreclosure process.  If all goes as it did last year, I will have possession by the end of December.

Is it worth it?  So far, so good.  Just don't invest in areas where they bid down the interest rate to 2% (or even less).  It's not worth your time - you can get that in bank interest.