All Forum Posts by: Karen Polis

So, maybe I got mine out of the way early? :)
I never really intended to do fix n flips anyway. I thought I would learn something from it - boy, did I!

I'm moving on to tax lien certificates and tax deeds. 

@Jay Hinrichs - Yup!

@Steve Babiak - were you at the sale? I was there. I couldn't believe this thing sold for 26K. I don't know how they can get it in RENT condition that quickly. Unless they put the sign up with the intention of renting in about 2 months and planning to do the work in that time. The thing that baffles me, is that somebody started paying the taxes of BEFORE the sale, and yet, it still went through. I'm glad though. Good riddance, I say, and moving on to better and brighter deals...

@Chris K.  this was a judicial sale.

@David Krulac  Thanks. I do plan to call the IRS to get the info right from the horse's mouth. What the county attorney told me sounds very contrary to what I've heard elsewhere. Maybe it only applies if the house doesn't get a bid and the county ends up with the property.

Follow-up: I spoke to my county's Real Estate Tax Attorney. According to him, the IRS gets treated exactly the same as any other lien holder. They get served by certified mail to let them know the house is going up for tax sale. If they do not respond or take any action and the house gets sold, their lien is wiped out the same as anyone else's. No 120 days. 

From what most people are saying on here, it sounds like it is not worth the risk for me to bother bidding on the property with the IRS liens, especially when there are other properties I'm looking at. Thank you for the clarification. I'm going to choose safe over sorry on this one.

As for bidding at an auction for my Self-Directed IRA, the owner of the IRA company that I'm with has specifically said we can invest in Tax lien certs and tax lien deeds through the IRA and another person who works there in a high enough position to know has explicitly told me I can use funds to bid at the auction. I need to ask for the funds as certified check, but otherwise, it's not an issue. I went over all the ins and out with her of which expenses were allowed and not through this IRA, so I'm going to defer to the IRA people themselves on that one. She knows I'm planning to go to the auction and bid. She never once even inferred that I might not be allowed to do that.

I've spoken to my IRA people and they said I can use the funds for this. What I can't do, is do any fix-up work on the house itself if I intend to fix and flip. So, no picking up a hammer - that kind of thing.
I'm not sure why buying and selling a property through my IRA would be considered "providing a service to my IRA." As long as I buy it as an investment property rather than a place for me to live, it should be okay. But I will certainly triple-check when I go to my IRA this week.

Thanks David.
So, basically, after waiting 6 months or more, you either get your money back or you get the property free of the IRS lien? Is it still too much of a hassle to deal with them? Or just a waiting game?

It's a self-directed IRA, so I can buy thru them at the sale, and yes, I would need certified check or money order, but I'd need that for personal funds as well.

I'll be doing this thru my IRA, so 120 to hold the place doesn't sound like a deal-breaker. As long as what I'm getting can be sold to another investor after that. I just don't want to end up with any liens that I have to pay. No unpleasant surprises.

That's correct: 
"There will be NO REDEMPTION PERIOD after the date of the sale....the owner shall not be permitted to repurchase said property."

In other states, the IRS pays interest, but you're saying that in PA they do not? What happens after the 120 days? Does the IRS lien get wiped off?

It sounds like bidding on a property with an IRS lien in PA may not be worth it? How did your situation end up?

I'm looking at a property that's going up for tax sale and I see it has 2 open IRS liens on it. I know in other states, such as FL, the IRS has 120 days to redeem the property - they pay you back what you paid plus 6% interest. Not a bad deal. But I've heard that in PA there is no redemption period, though I'm not sure about that. 

Does anyone know the actual laws around IRS liens and Tax sales in PA? I'm not looking for the reactive "stay away from the IRS" kind of response, but actual legal knowledge in order to make a wise decision at the auction.

Thank you for your help.