All Forum Posts by: Roy Oliphant

Quote from @Jay Hinrichs:

Quote from @Don Konipol:

Quote from @Don Konipol:

I used to think that most investors purchasing mortgage notes were clueless as to the mechanics of how it worked.  I now see that lack of knowledge is nothing compared to the cluelessness of investors who purchase tax liens……

1. About 50% of investors buying a tax certificate think they’re buying the real property
2. About 75% have no idea about redemption period
3. About 85% have no idea about waiting time for filing deed
4. About 90% think tax liens work the same everywhere 

Has anyone heard “investigate, THEN invest? 

when i first thought of doing this was in Hinds county MS.. I had a very successful HML company there funding mid 2000 turnkey guys/gals. I thought since i was there I would go buy some tax certs what can be so tough about those.. I took 30k to the sale and got schooled big time.. the big players are there with their lap tops the sale goes at lightning speed those guys snag most everything I end up spending my 30k.. And not one redeemed I lost interest trying to follow them and just chalked it up... I grew up in Tax SALE in CA with my dad so I thought what could be so tough about this.. Tax SALE and tax certs big diff. Now you get all these gurus trying to sell the sizzle like folks are going to end up with pretty homes for 5k each total BS. TAX CERTS are a bizzness not something you do as a passive investor or someone like me who is busy with their core business.. thankfully it was only 30k

All that and the SC Hennepin Decision last year now causing states to re-write their laws so that if an investor does somehow end up converting a lien to a deed, that investor may be liable to tax defaulter for the difference between the lien and market value of the property, Tax Liens seem to be VERY MUCH a place where only the big money, interest investors can make it worthwhile.

Fortunately, Texas has "immediate" possession Tax Deeds so we keep our focus there.

Quote from @Ned Carey:

@Jack Seiden the issue in TYLER, was that the surplus went to the state vs the homeowner. In Maryland the surplus of the amount I bid above the tax lien does go to the homeowner. 

For example I bid $150K for a property with a $2,000 lien. The $148k surplus went to the property owner. 

 @Ned Carey  Not to nitpick (although that is what I am doing;-)  ) the issue in TYLER was not that the surplus went to the state rather than the homeowner but that the homeowner had no opportunity to obtain the surplus.  If there had been an opportunity for the homeowner to claim the surplus and they missed that and then the surplus went to the state, SC said that would generally be ok.   Still need to track the other case that was remanded after TYLER as it was more generally focused on the value of the property sold vs. the amount of taxes owed and whether that difference could result in a violation of the Takings clause.   

Quote from @Brittany Wilkerson:

Hi, everyone. Does title insurance sort of serve the same purpose as a quiet title action? Would a quiet title really be necessary if you have a tax deed and the tax sale is valid? I had purchased a course and it came with some really helpful templates to file the quiet title, but I'm not sure if I really need to. 

Hi Brittany,

I assume you are asking regarding an Alabama property.  Tax sales are very different by state and you need to get state specific answers.  Best person for Alabama is @Denise Evans  She can give you the best answers. 

In general terms, Quiet Title and Title Insurance serve two different purposes.  Quiet Title is a process (usually via the courts) that works to remove claims that others may have on the property.  In Alabama Tax Sales it is necessary to remove any claim the previous owner may have to redeem or reclaim the property.  It is usually required before any company will issue Title Insurance which is a company's warrant that they have inspected the title and believe it to be good and will pay up to the policy amount if there are any successful claims against the title, subject to their limitations.  

As an investor, you need to get Quite Title so that you have uncontestable ownership.  You would not usually get Title Insurance until you sell or borrow against that property.

Quote from @Ned Carey:

@Roy Oliphant what Supreme Court case are you referring too? Was it TX or US Supreme Court?  

I know of one US Supreme Court tax sale case about the bid surpluses must go to the former owner and not the county. 

 Hi Ned,

It wasn't quite as simple as that but yes the US SC decided (Geraldine Tyler, Petitioner v. Hennepin County, Minnesota, et al.  22-166) that the taxing entity must give the foreclosed owner an opportunity to claim the excess between the bid and the amount of taxes owed.  The case sent back to the lower court to reconsider (Kevin L. Fair, Petitioner v. Continental Resources, et al. 22-160) in light of that decision was more specifically focused on the amount of the excess and whether the foreclosed owner suffering any loss in value in excess of the taxes owed should be considered invalid under the "takings" clause.  It is a much broader case and may affect the ability of the taxing entity to make the foreclosed owner whole at less than market value.  In the pleadings in the case decided and the one sent back, the taxing entities made a bid deal about how they are not in the real estate business and had no way to determine the market value and thus could not possibly be held liable for any amount other than what was bid at the sale. 

Since the decided case focused on whether the taxing entity had to provide an opportunity for the owner to recover any excess and not if that excess was sufficient compensation for the entity taking the property, I believe the valuation question is still open and is more likely to be in the specifics of the second case.  Once they open the discussion of how to determine the value, I think it will be difficult for the taxing entity to claim they cannot determine that since they already do to establish the amount of taxes owed. 

Thanks for the kind words. 

I do not think Texas will change much based on this session.  However, if the case they sent back to the lower court comes back to the SC so that they have to answer the question of establishing value with regards to a "taking", there is no telling what that would do.  

The government lawyer spent much of their time in the case that was heard trying to make the point that the taking entity could not establish a value and thus could not be guilty of taking.  If someone brings up the fact that the taxing (and taking) entity(ies) involved has already established a legal value (how else can they set a taxes due amount unless they establish the value to base the taxes on), seems to me it would be difficult to deny their ability to established a value.  Thus either the taxes are not legally due as the appraised value was not real or the entity is responsible for taking up to the appraised value of the property.   Either outcome would present significant challenges. 

Quote from @Abdenour Achab:

...

Which Tax Lien States, if any, are BOTH Interest Rate Bid Down AND No Foreclosure Required?

Well I'd like to have my cake after I eat it as well.  After this last Supreme Court session, I suspect any foreclosure without notice will be invalid as everyone must have a defined opportunity to redeem their property.  I would watch for significant changes in states that transfer ownership based only on statutory periods and especially where liens convert to ownership.  

Just because it's occupied, you cannot assume it is in 'livable' condition.  I have seen many properties on the tax sale where there was someone occupying the property without all of the usual utilities.  Also, they may have 'inherited' the property and it may have years of deferred maintenance.  Remember the occupant is likely considered a homeowner - your occupant will likely be a renter (even the occupant at the time of the sale may be a renter after the sale) and most areas have some code regarding the condition of a rental property (think smoke alarms, working windows, safe electrical systems, etc.).  It may take a significant investment to bring an occupied property up to that condition.

Hi Cynthia,

You have a number of great questions.

Specifically on Harris County it can be very competitive and, with as many as 8 concurrent auctions, confusing as well.

Mortgages are usually wiped out at a Texas Tax Sale so I assume you are new to this.  Tax Sales in Texas can be a great way to invest but there are enough challenges and specifics to Texas that you should look for some training and education before jumping in.  The best of that for Texas I have come across is via Texas Tax Sales Resource Group and Arnie Abramson.  You can find his site via Google.

Good luck and much success!

GA is a Tax Deed state but special in that you get the deed but not immediate possession.  You should have an insurable interest via the deed through the redemption period and until you can complete the Quiet Title process after 2 years.  As @Bruce Lynn mentioned, this is a question for your insurance agent.

Happy hunting!

Quote from @Enda Hoolmaa:

Hi Hunter,

I have registered with a few counties and am considdering flying to Texas to see the properties before bidding. Iv'e researched the tax arrers, google street view, zillo market price and other leans/exemptions on the properties already. I was wondering if there was a community doing this through bigger pockets or am I alone in the wild? 

 Hi Edna,  Texas is a great place for Tax Deed investing.  Arnie at txtaxsales dot com is the expert.  He has some programs to help remote investors.  

What would you like to see in a BP group for this?