All Forum Posts by: DL Coker

Hi Brad, 

Did you ever find any online meetup groups focused on Baltimore? I've been looking for the same and am yet to come across anything concrete here in BP. I've heard of people mention some other platforms (GRID, Facebook meetups, etc) but I'm yet to try them out. 

I'm also starting out on real estate and looking seriously at the Baltimore City market, so if you'd like to connect, let me know. 

DL

Thanks to all for your responses - some really interesting points.

@Ned Carey I didn't know about PHIFA. It seems quite tricky but I would hope a foreclosure and title attorney could assist with that. I'll do some more research.

@Bruce Lynn There is some really useful advice in there. I like the idea of reaching out to people who bought properties I was interested in to see if they want to hold on to their interest or not. the pre-foreclosures angle is also something I've read about a lot and that seems to be an interesting avenue. The delinquent lists are indeed long and I will start trying to wok though what I can now.

Hi fellow BP community,

For the tax lien/ tax deed investors out there, I'm curious to know, what do you focus on once the tax sale season is over? I participated in my first tax sale auction in Baltimore City this summer - I didn't get anything but I learned a lot and I plan to bid with more purpose and seriousness when it comes round next year. But that's a while away, so I'm wondering what do those of you who invest in this RE asset class do when the tax sale season is over? Are you simply busy dealing with redemptions, title clearing, foreclosures, etc. from the lien certificates you won? Do you focus on another kind of real estate strategy while waiting for next year's tax sale auctions to come around? Do you focus on OTC sales is various locations all year around?

I'm currently reading the Bidding to Buy book by Aaron Amuchastegui and David Osborn and I'm thinking that foreclosures might be something I could focus on, pending my next foray into a tax sale auction. Plus, there is a bit of overlap with tax lien investing, so that can't be bad, can it?

I just kind of want to keep my momentum going after my first (albeit unsuccessful) tax sale experience. I'm interested to know what your journey was and what advice you can offer, if any.

@Ned Carey Thanks for the reply. I wanted to make sure I was fully understanding the implications, so I appreciate your input as it makes it much clear for me now.

@Cameron Whitehead and @Ned Carey Thanks for your responses. So @Ned as regards Maryland rules, once you have the tax lien certificate on a property you are then liable for future taxes at the full rate (i.e. without the discount from the Homestead exemption) - is that correct? Or does the homestead exemption stay in place until when (if) you actually go through with foreclosure?

Hi BP community
So I've been doing a lot of research about tax lien investing in MD. I participated in the Baltimore City tax lien sale not too long ago. After filtering out the properties that met my criteria and that I would bid on, I noticed that every single one had an asterisk next to it indicating that it had a homestead exemption - this gave me pause as a new investor to the market and I wasn't quite sure what this meant. I have since done research on homestead exemptions but I am still not fully sure how it could impact my tax lien investing (if at all).

What are the benefits / pitfalls of bidding on a property with a homestead exemption? My thinking was that, this simply indicates it's an owner occupied property - consequently, the likelihood of redemption is pretty high. However, if a property is under a homestead, does that ultimately make it more difficult to eventually foreclose (if things go that far)? Does it adversely affect the redemption period (i.e. my capital is tied up longer)? Or is it simply there to indicate that, if one were to acquire the property the subsequent taxes I would have to pay would be higher than what the current occupier pays? I'm not really clear on why or how relevant the homestead exemption is. Any guidance would be much appreciated.

Given that he is the resident expert on tax liens in Maryland, I'm sure I'll be directed to @Ned Carey. If he has any insight that would be great.
That said, if others have advice or similar experiences, please also feel free to share your thoughts!

UPDATE: So, I’m taking the plunge and am registered for a tax sale on July 20. The closer the tax sale, the more anxious and cold feet I get but now that it's just round the corner, I suppose I just want to confirm I'm still on the right track in terms of my tax lien investing approach. 

@Ned Carey, I was indeed too late to register for the PG County sale but I am registered for the Baltimore City tax sale on July 20. As you say, at the very least it'll be a learning experience. I've made more contact with a tax sale attorney in an attempt to get more knowledgeable about the ins and outs.

Right now, my roadblock is a case of analysis paralysis. Having obtained the list of tax sale properties (for which values will apparently be updated at least twice more before the sale), I am trying to determine the best way of sifting through the data. Is there a typical way one assesses properties - particular formulas or rules that you use?

I've filtered out according to my budget and I'm trying to focus on occupied properties that are likely to get redeemed (my focus at this point is more to get interest than to acquire property). Beyond that, I'm trawling through the lists to run some basic comps on similar properties.  Admittedly, I need to educate myself a bit more on the Baltimore City market...

So my questions now is this: Are there any general rules of thumb that I could follow to help me focus a bit more? For instance, I've read that:

1. A tax lien should represent no more than 3-5% if the assessed value of a property. Does that sound broadly reasonable or would that be way off/totally dependent on one's budget and strategy?

2. Newbies should essentially stay away from vacant lots because these can be loaded with risk to the uninitiated, but I have also read a lot about potential upside (vacant land on unimproved subdivision lots) - perhaps it's too much to tackle as a first timer?

Logically, this leaves me focused on occupied single-family properties as they should have higher chances of redemption. Is my reasoning sound or are there aspects you think I might be missing altogether? 

Any advice that Ned or anyone can offer going into the final stages before I participate in an actual auction would be welcome.

Looking forward to any input and I’ll keep you all posted on my progress.

@Ned Carey

@Scott J. How are you getting along in your preparation for the upcoming PG County tax sale? I ask because I am also interested in this area and am registered to participate in my first ever tax sale in just over a week. I will be focusing on the Baltimore City tax sale, but I imagine there might be much overlap in our areas of interest.

On another thread, a fellow BP member (@Matt Schelberg) suggested that I get in touch with a Maryland tax sale attorney, which was really useful advice. I was able to get more clarity on legal (and additional) costs, which will be covered in the event the liens are redeemed. Essentially, you would only really need to appoint an attorney once you acquire a lien (at least that's the case with the attorney I communicated with). You could then sign a retainer with said attorney who handles the rest of the process (title searches, filing fees, etc.). That gave me a bit more comfort because I wasn't sure if I'd have to fork out for an attorney before I could bid and I was wary of potentially bidding, not winning anything, and then being out of pocket for legal fees.

Feel free to PM me if you want more attorney details. There are slide decks that can be useful too.

Hi @Ned Carey

I'm glad this thread got your attention and I appreciate you taking the time to respond! I imagine an amount of $5k is the bare minimum to invest, so I'm building up additional funds while I continue to educate myself on the tax sale market in Maryland. I've taken @Matt Schelberg's advice and reached out to a Baltimore-based attorney who provided me with useful and detailed information. 
Right now, I know some county tax sales have been postponed due to COVID, so there is still time to register and bid. That said, I don't yet feel quite comfortable diving in. Par of me says "go for it' - maybe I'll have the beginner's luck you had! The other part of me is extremely wary of all the hidden costs you and Beth H mention, and makes me err more on the side of caution. If I can be smart and lucky, that would be ideal!
Given I'm starting out small, I will definitely focus on Prince Georges, Baltimore County and Baltimore city. Then I will perhaps look at smaller and farther out counties too.
As for vacant houses, they seem to attract more problems than anything (at least from what I've read). I might steer clear for now.
Thanks again and I'll be following your (past and present) discussions on all things tax lien-related!

@Account Closed This is golden! Much for me learn but it's good to know that with diligence and proper research, even the little guy can make something in this competitive market. I like your point about empathy too...particularly relevant in the current context we're living in.

My main takeaways are:
1. Research, research, and research again 
2. Tax lien investing in not risk free - understand the rules
3. Look up for anything Ned Carey has to say about tax liens and deeds! :)

Thanks to all for your input so far! I'm already ahead of where I was a week ago - no doubt I'll be back with more questions soon