What should I do?

Question

Hey BP nation, I've been thinking about this for quite a few days. I would like some advice. Ok here's the situation. There is this distressed property one block from me. I walk my dog every day by this property. Well, the area I live in is a very popular area, growing and the city is investing a lot money redeveloping this city park down the street to a high-end shopping, entertainment and restaurant condensed area. For a 2b2b condo it sells for $300+K. There are half-million or million dollar homes on every block. And many new houses or new constructions are here. But this house is not at all well maintained. Tall grass, window unit, looks pretty old (built in 1908), just in a bad shape, comparing to the houses around it, just not "fancy" at all. I looked it up on Zillow, this is a 1bed 1bath 716 sqft and it has a backyard. When I searched it on tax record, it shows the owner is behind on taxes, still owes 2015 taxes. And there's a tax certificate issued for 2015. As a newbie, not very sure what this means. I looked on auction or tax lien website but it's not on there for auction sale. Can the owner still redeem the tax certificate? How can I buy this property if I'm interested? Should I go knock on the door asking if he wants to sell the place or should I send yellow letters? I found out online he's a 63-year old elder. Say if I bought the place, does it mean there's a tax lien on it and someone else can buy it at an auction since it has a tax certificate created? I'm a little confused what I should do here. Any help is appreciated! Thanks!

Lin

Account Closed · Answer

You might not be the first to knock on his door but it doesn't hurt to ask if he's interested in selling. Property doesn't go to auction until there's 3 years of unpaid taxes in my county. Good luck with your prospecting.

Joe Mclain · Answer

@Lin Ding - so if the house is behind on its taxes, the county will sell the tax lien certificate on the property.  You buy the certificate and if the owner redeems then you would receive the money for your tax lien cert and interest.  I think its 18% in FL.   Well the owner has 2 years to redeem the property.   So lets say in your case they are delinquent for 2015 and then 2016.   You buy the certificate for both years.   Then after that period of time, you can bring that up to a tax deed auction.   The winner of the tax deed auction wins the house and the county pays the tax lien certificates off with the proceeds.

If you want the house then you need to be winner of the tax deed auction.   Or you could work with the owner to pay off the taxes and have the sign over the property to you and walk away.  Perhaps a cash for keys.  You come in, offer him a little money to sign over the property to you and you take care of his taxes and own the house.  Make sense?

Shawn Greeves · Answer

Lin

A letter report is something that you would get from a local title company.

You would tell them what you are wanting to do.

You would tell the title company that you want a letter report on this house. They will check and see what the tax status and any other liens are on the house.

The seller wont even know that you are doing this. It should cost $100.00

After you know what all the liens are then you can write a letter to the guy and ask him if he would be interested in selling the house. You can stick it in the door or mail it to him. It would be nice if the house was vacant because he would be more motivated to sell. But the thought of getting money might be enough motivation. If he still lives there you might have to buy it just to get him out.

Just make sure its a real good discounted price, so you can sell it quickly. Or if you want to fix it up you will need a big enough spread to rehab and still make a profit.

Shawn Greeves · Answer

Most states sell the taxes to generate money for the county or city. But that doesn't meant he still doesn't own the house. It usually takes 3 years of delinquent taxes before the owner loses the house to a tax sale. Then some states he still has a year of right of redemption. So he probably still owns it.

If you did buy it the title company will let you know the tax status. You can even have a title company run a letter report to tell you any and all fee/liens on the property.

Those would get paid off at closing if you bought it.

Why not run that letter report and see what's attached to the house to see if its even worth pursuing.

If it is, try to get it under contract and ask for 90-120 days to close on it and flip the contract or the house to make some quick CASH!

Lin Ding · Answer

Account Closed It's so scary thinking about knocking on the door. I never seen the person who lives there. I just see this rusty old truck in the front yard covered by tall grasses. And sometimes during the nighttime, I see some lights and it seems the TV is on..... How do you normally start the conversation and also don't sound threatening? The guy probably doesn't have any other place to go either.

Lin Ding · Answer

Thank you @Josh Carr. When I searched on county clerk office, this property was not listed in the sale list. I just checked again and it turns out the owner has just paid all property taxes current. I plan on yellow mailing him on potential selling this property. Wish me luck he wants to sell!

Thanks everyone!

Josh Carr · Answer

@Lin Ding It sounds like there is some research that needs to be done.  In FL it may be impossible to own both years as they have an auction every year there is a delinquent tax on a property.  If you own one year then you could wait to see if the next year is available and you are the winning bidder or it hits the over the counter listing and you could pick it up there.  Other than that you only need to own one year that is past the redemption period.  The two year redemption period begins when a lien is issued.  Look on the county website to see if you can get the listing from the over the counter tax liens and see if there is one you can purchase on the property.  You can search by address and or parcel id.  It is an easy thing to do once you have the listing in front of you.  If you get your foot in the door this way then you have a chance.  Worst case scenario is that you get your money back plus interest.  If you knock on the door then you will be able at least talk to the gentleman and see what your possibilities are, however, in Florida, if you own a tax lien then you are not allowed to contact the property owner legally.  Keep us posted.  I hope it turns out for you.

Shawn Greeves · Answer

Same to you

Lin Ding · Answer

Thank you very much @Shawn Greeves! Your advice is precious. It's more clear to me now. Have a good holiday!

Lin

Lin Ding · Answer

@Shawn Greeves what letter report? Sorry still trying to understand everything.

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