All Forum Posts by: Ian Cox

I have invested with PIP multiple times during the last 21 months and found them responsive and the redemptions checks keep coming so I have been happy with their services.

Most of the time the liens on the good properties get snatched up at auction however there are a few good ones that survive the auction to be purchased directly from the county.  Which counties in FL are you seeing decent liens?  Be careful to check the back taxes, municipal liens and the most current tax assessed value as they can change drastically from year to year depending on the condition of the property.  

Talking about "Top states" to buy TLC's would vary drastically depending on what is most valuable for you?  Do you only care about the interest rate or are other factors like being able to bid online, how noticing is handled, are lawyers needed, the ease of foreclosing, the time before you can begin foreclosure etc etc all need to be asked.  Just concerning the interest rates, the highest are 36% in Illinois and Iowa at 24%.  The rest range between 8-18% but often can be bid down to 0%.  I have seen counties where thousands of liens are purchased at just 0.25%.

@David Shulski If you buy the tax lien you are far from guaranteed to getting the property.  If you buy a lien for 2015 unpaid taxes, you will have to wait until April 1, 2018 before you can "foreclose" by sending the property to a tax deed sale.  When you foreclose you'll have to pay all the back taxes and various fees so the total all in costs will typically be 3-4 times the price you paid for the lien(ie just 2015 taxes).  Once it goes to a tax deed sale 6-9 months later, other bidders can bid up the price of your home to a price where you don't want to compete by also bidding on the property.  What county is this house in? What is the approximate tax assessed value on it?  

David Shulski

David Shulski

Hello Cazemba

If the property owner does not pay the taxes within the redemption period then you can legally foreclose and force the property to go to a tax deed sale.  No there isn't a deal you could make with the property owner because you don't know beforehand who will be the new owner of the property because the property will go to auction.  You are not required to foreclose on the property however the next year(or same year with more than one lien for that year) another lien holder will be able to foreclose on the same property.  Which state are you specifically looking to buy liens in?

You will want to purchase the earliest lien so that you are more senior than other liens and can foreclose earlier. Yes buying the 2014 lien when the 2015 lien has already been paid can be a good investment since there is more skin in the game for the home owner.  While this situation is rare, I see it perhaps 2-3% of the time.

Is the property located in MA? If so, MA doesn't have tax liens but instead has redeemable tax deeds with a 6 month right of redemption.

Hello Thomas

Yes your right in buying a junior TL would mean those senior to you would have first crack at the property IF they chose to initiate foreclosure. If they do, then you get cashed out and get your nice return.  The biggest risk in buying a junior TL is that the other lien holders won't initiate foreclosure because they are just interested in collecting interest or they don't have the funds or desire to initiate foreclosure.  This means that the total taxes will grow on the property and a year or two later, when you have the option of initiating foreclosure, the total price to initiate foreclosure will go up substantially and could be many times(200-400%) more expensive depending on all the back taxes/liens which need to be paid off.  This results in the starting bid at the tax deed sale being much higher due to all those years of back taxes/liens which weren't paid. This higher starting bid will scare aware some bidders which increases the chance you will get the property.  

What state/county are you looking at buying liens in?

Ian

Interesting to see how the number of investors has plummeted in the last few years yet the average interest rate has remained remarkably stable. This would appear to indicate that the institutions are becoming a much larger share of the total bidders.  Do you have any stats for any other counties in AZ?  Thanks!

I don't know the rules for NJ. I am talking about FL. Check to see if NJ has a tax deed auction.