All Forum Posts by: Will Sifert

Quote from @Ed Tamayo:

I have doing tax sales for over 8 years and I will never ever buy at a tax sale without doing a Title Search. Debts and liens are not an issue unless they are federal liens as they don't go away.  The major issue that you must uncover are easements.  I actually bought a piece of land that had the entirety of the property as easement in favor of a Billboard company that had a sign on the lot, making it worthless to me. I did not pay subsequent taxes and it was sold on the next tax sale to another unsuspecting tax  deed buyer that bought it for far more than I paid for it.

I was also close to buying another piece of property and i was willing to pay  over $250,000 but I found out that it was given as an easement to a conservation society.  That would have been a monumental loss.  

Municipalities will sale everything even if they know the properties are worthless for most people. 

That is a good point about the easements. Just another thing to look for.  But keep in mind, it's not just  federal liens you have to worry about.  Local municipality liens (I believe in the majority of states - not sure if all) those liens will not be removed.

Quote from @Arnie Abramson:

Misty- We wait and do the lien scan just before the auction as so many get withdrawn up to the last minute.  That allows us to check on a lot less than if we did it earlier.  Most do not have liens that remain anyway.

Same here. The last step in my due diligence is to do a quick title search.  You should have a process on how you work your list. I always wait till the last publication and then sort the list down to the properties I like the best. A few days before I will do a drive by as they can take several hours, then the last thing I do quick title search.

Quote from @Misty Quaintance:

I've been to a few tax sales now and there have been 100's of properties. Out of these I'm usually interested in 20-50 properties. Do you realistically do a title search on 20-50 properties before bidding understanding you may only pick up a couple? I'm just wondering how most people handle this process as it seems like it could get pricey to do a title search on all the properties I may or may not get.

It depends. If you are bidding on liens for nice, occupied homes there really isn't a need to do a title search. 99.9% of them will be redeemed making a title search irrelevant.

If you are bidding on liens on vacant land and/or abandoned houses yes I do and would recommend doing it. Those types of properties have a higher chance of not being redeemed and a much higher likelihood of having local liens place on them that can't be removed.  Liens from code violations, high grass, demolition, etc. or in some places municipality liens like for water, garbage, snow removal etc. You don't want to end up with a property that is worth less than the amount of liens it has. It happens.  

Doing a quick title search yourself is all that is needed. I can usually check out a property in a couple mins. Yes its time consuming if there is 100 you are interested in but the couple hours you spend could save you thousands of dollars.

Also when doing the title search you can get an idea of what is going on with the owner, are there creditor liens, has there been a succession, is there any pending litigation with the property, etc etc. This can help you find red flags or be a property that you may want to target depending on your strategy.

Quote from @John Underwood:

Quote from @Naeem Barbour:

Quote from @John Underwood:

Quote from @Marco Bario:

@Hector Casablanca -

Is there still yield left to be made in tax lien/deed investing? I've been under the impression institutional money found the asset class several years ago and drove yield down through aggressive bidding.

Many states are not bid down. You can target properties not in the big boys sand box.  I just got deeds to 3 houses from last year's tax sale. Most expensive house was 29k.

 Hey John, I stay in chicago and was trying to look out of state to basially get started. I heard that properties can be as cheap as 20k but where exactly? What advice would you give on where to look. 

I live in SC and I can tell you that SC is one of the top 5 best states for Tax lien investing. My returns will blow the doors off any Notes.

 I agree with John, but to invest in SC you need to start with a significant amount of money, unlike other tax lien states.  You not going to get far with a couple thousand dollars in SC ;)  I would consider SC to be more of like a deed state when it comes to how much money you need to get started.

Quote from @Hector Casablanca:

@Marco Bario - that is a good question, and I really don't know.  All I know is that there seems to still be a lot of "gurus" out there claiming it is viable.  Do you know of any sources that speak to this either way/

The "gurus" selling classes are very likely making more money from the classes they are selling than they are from buying tax liens.   They sell on hype and advertise the %'s that you *could* make. They conveniently leave out the important stuff that, like getting those rates rarely happen. They don't give you the realities like sales that are bid down by % typically get bid down to 0% interest. So to win the lien you would need to bid 0% and  would make 0% interest, not the advertised 16% or 18% starting amount.  Or in premium bidding states they wont tell you that most liens have premium bids that exceed what you could possibly make from interest, and in many cases you can lose money.  They leave a lot of the truths out because they want as many people to sign up and pay them as possible after that, how much do they really care if you succeed or make money?

I've thought about helping people for a small amount but my services would be limited to more of an intro as I am not an expert on every state.  Each state is so different.  You need to have the basics, a good foundation, strategy, learn to do due diligence, etc and then you need to really learn the specifics of the state you plan on buying tax liens (ideally where you live). The second part can usually be accomplished by finding local attorneys who are tax lien experts and pay them for a consultation (that is how I learned).

I would recommend before paying anyone, to ask them how much they spend each year of their OWN money on tax liens and to give you actual information so that can be verified. Also, to give you addresses of deals where they have acquired deeds and have sold the property. Lots of people make claims and most are full of ****.

Quote from @Marco Bario:

@Hector Casablanca -

Is there still yield left to be made in tax lien/deed investing? I've been under the impression institutional money found the asset class several years ago and drove yield down through aggressive bidding.

Yes there is, but the margins across the board a pretty low. The competition is fierce and if you are trying to bid online its really difficult to find deals.

There are still in person tax lien sales that can produce good returns and deals. But they are scattered and a lot harder to find as a lot of locations have chose to gone online. 
Tax sales going online has been the biggest detriment for those of us who have been buying tax liens for several years.

Quote from @Denise Evans:

No, you cannot. There are some strategies that will let you take possession, but it requires some work. it's not automatic.

In Louisiana typically we can’t take possession either. The only caveat is if the local municipality is sending out notices, code violations etc. to satisfy a local order we can file for a writ of possession that allows us to go on the property to do the repairs needed. 

Quote from @Ray Lin:

I have purchased tax liens in KS, MS and NJ and performed extensive research in FL. In my opinion, tax lien and tax deed properties are not worth owning. The properties will be probably be valued around $50k or less. Most of my liens were redeemed and I got paid 18% interest, but I still end up losing in total because the liens that was not redeemed turns out to be worthless homes, probably valued around $10-$20K or less. Those properties needed a lot of work to bring to rentable conditions. Just too much work and too much money involved. Tax liens and deeds may work for you, just not for me.

 That is why it’s important to do your due diligence. You need to know what you are bidding on and you don’t bid on anything that you don’t want to get stuck with. 

I have a vacant lot under contract right now for 40k. It cost me about $5500 in taxes and court costs. I picked it up as a tax lien 4 years ago. I have some additional closing costs and commissions to pay since I listed it in the mls but I will make a really nice profit. I love tax liens but I also do an extensive amount of research before the tax sale. 

Quote from @Ned Carey:

@Will Sifert

Are those bidder big bidders winning a LOT of liens?

Hopefully some of these big money idiots will lose a lot of money and decide to get out of tax sale permanently. 

 It just shows a bidder number or id so I am not sure who they are. Here I can check the recorded records to see who the tax lien was made out to after the fact. I haven’t tried to do that in Colorado. I also haven’t run any reports from the final bids to see how many each number got. I bid mostly on land. I can’t imagine the ones bidding more than you could possibly make in interest being the big hedge fund companies especially on land. 

I bet the big companies are bidding on houses and I am sure they have a formula where they can bid up to 9 months worth of interest for example. The probably know from doing thousands of liens the average redemption time  is XX months.  They lose  on some but make more from others, overall get a 3% return etc. 

Quote from @Karissa Sampson:

@Atha Winston Thank you for your response. I'll let you know if I go and what my experience was.

@John Underwood In Colorado, there was a public outrage about tax liens and transfer of deeds so they've added on restrictions over time. We have a 3 yr redemption period. Any premium paid over the original tax lien amount at the sale is not required to be paid back by the property owner. There are minimum requirements for  the number and timing of notifications you must send to the property owner (certified letter or similar I believe). I also believe once you apply for the deed at the end of the 3 yrs, they give one last notice to the owner and they have one last chance to redeem (a month or a few months, cant remember) before the deed is transferred. *If I'm incorrect on any of this, please chime in. I'm not an expert on tax lien sales in Colorado. Im just starting to look into them*

Seems like in Colorado, the laws are such that its nearly impossible to actually get a property deed out of a tax lien sale. I also have heard that many of the liens are going for large premiums and hardly any reasonable interest. Kinda seems to make tax lien sales a moot point. But, I'll see for myself at the tax lien sale.

 Colorado is not a good state to invest in tax liens. I bought there for the first time a couple months ago, about 200 tax liens, I have a strategy but will be adjusting it some next year. The premiums being bid on almost all liens is insane. I had to bid in 13-15 counties to find a few I think will be worth doing again with my adjusted strategy. It hurts every time I get a check because I lose money one every one since it's only been a couple months.

In Colorado you do not get the premium amount back, the county keeps it. The in person auctions are much better but everything online is being bid way up.  For example, a $1,000 tax lien on a decent house will sell for about $1200.    So the high bidder paid a $200 premium (donation) to the county.  The interest rate for 2021 was 9%.  So you making $7.50 a month in interest. If the owner redeems after 2 months you get a check for $1015.00  but you spent $1200.  Even if they home owner  waits till the last month to redeem you would only make $270 in interest. Your net would be $70 for tying up $1200 for 3 years. Most don't wait till last month to redeem a lot redeem in the first couple months. In many cases when you pay a premium you will lose money.  For the vacant land liens that are around $50 - $500    people are bidding way more in premium than you could possibly make from interest. All of those bidders are taking a lose on every single lien that gets redeemed in the hopes of getting a few deeds.

Yes Colorado is 3 year redemption period, after 3 years you apply for a deed usually about $300 and it can take anywhere from couple months up to a year before you could get the deed. The county will try to find the owners best they can once you apply for the deed. I imagine a lot are found and pay up.

You would do much better going to tax sales that are in person in smaller counties. If I lived there I wouldn't even waste time on the online auctions.