Property Tax sale and forclosure

[rockfordlandlord]

Heres a question for the Tax sale experts. What happens if you buy up unpaid property tax bills, wait the required time to file for deed of ownership, which cancels any mortgages owed.  If the bank or owner does not step in to pay the delinquent taxes than you take ownership. So the previous owner no longer owns it but still owes the bank, correct? But how can the bank foreclose on him (assuming he is not going to pay anymore for it) if he does not own it anymore, what happens?

[taxlienadvisor]

nice to meet you,

that is a great question...no, the previous owner does not owe the bank any money once the tax certificate holder takes possession of the property...you are right, the bank or lending institution has their chance to pay the tax certificate holder the monies and protect their investment before the foreclosure process is complete. If they choose not, or if they misplace the paperwork and forget, or if they are running and in hiding like most of them are at this current time, then they forfeit their loan.

[rockfordlandlord]

Thanks Tax Advisor but what happens to the previous owner, I assume they are still liable for the loan but how does the bank collect without the property as collateral? Does it just show up as a chargeoff?

[taxlienadvisor]

no they are not liable for the loan....you understand that the mortgage lien falls off the property if they lose it at tax sale right?...well if the mortgage lien falls off and is extinguished, that means the mortgage company lost their investment...so why would the previous owner have to pay for something that exists no more?....they don't

What state are you looking to get started with tax sales in??

good question.....happy investing

[Summit]

I really wish they had a odds of winning a property as a result of a tax lien. If you are going to do tax liens don't worry about the county doing a release of lien for the Mortgage holder. Out of everyone I know that does Tax Liens NOBODY I know has ever or knows anyone that has ended up with a house from doing Tax Liens. We all do it just for the Interest and the write off. Now granted we don't buy Millions of liens. So I can't tell you the odds on it. I can show you something even better.


I know that we have bought more then 625 Tax Liens in the past. So yes the Odds you will be affected by someone being struck by lightning. (Ten people affected for every one struck) is 1/625

Odds of being struck in your lifetime (Est. 80 years) 1/6250

Check it out yourself its really a cool read. http://www.weather.gov/om/lightning/medical.htm

I am not going to stop buying tax liens. I just know that I do have a better chance of getting struck!

[Summit]

Just when I thought I was done I found even better odds...

Odds of injury from using a chain saw: 4,464 to 1

Odds of injury from mowing the lawn: 3,623 to 1

Odds of fatally slipping in bath or shower: 2,232 to 1

Odds of a meteor landing on your house: 182,138,880,000,000 to 1

Odds of dying from ignition or melting of nightwear: 1 in 30,589,556

The next upset me so I stopped reading

Odds of dating a supermodel: 88,000 to 1

Here is the link its really fun as well Can't find odds on Tax Liens I do know you have a better chance on that Lightning thing! Keep in mind the interest is great! 

 http://funny2.com/odds.htm

[taxlienadvisor]

Hey Summit..the odds of acquiring the prop for just the back taxes depends on the state.

In SC it lis 8% of the time as an Average state wide in improved prop.

in FL it is less than 1 % on improved properties...

if one is looking at developed or vacant land...then the percentage can go to 10 or even 20% of the time...it depends on if the prop is comm., single fam, home, raw, vacant, agricultural...etc.

What state do you buy your tax certificates in?

[Summit]

Is there a website to verify that info? (Other then yours?) I at least gave a website (Other then mine) to verify my odds! LOL

I have some in NV as well as AZ and OR looking into GA right now. I believe that what you are saying is in SC 8% will go into default. Then the lender will pay them off right? Because there is simply NOWAY that 8 out of 100 end up to the purchaser of the lien.

[taxlienadvisor]

I think you mis-read my post...I was not trying to prove you wrong, by giving my own personal unproven odds...I dont have them up on my website either....

I have already been through a back and forth heated discussion with the moderators and I'm not going to partake in anymore like that...if you would like to get to the some more hard core facts about tax liens I'm all for it...if you want to call me out because I dont give out websites at all times to prove my opinion...I'll just stop now, got better things to do than argue.

I get my info by calling the county officials in charge of collecting taxes directly, and spending about 10-15 minutes on the phone with them if possible..some counties they are very busy and they dont have this much time.

In SC the tax collector told me that about 5% of the tax liens actually go to the cert holder...now, they are not the most desirable properties, but if you are buying them for just the unpaid taxes...then there should be money to be made.

Can you please tell me a little about the liens you have purchase on OR...my research has found that state to be only a tax deed state...I would be very interested to know how many counties sell the tax liens and what the interest rate is and how long the redemption period is.

Thank you in advance for your help.

[taxlienadvisor]

I always try to find and go look at properties that have no mortgages, they are far and few between, but theyare out there....this way there is no chance of a lending institution redeeming.

Yes, one should never buy liens expecting to get the property...but it does happen more often than one would think...you just have to be buying in the right areas, and on certain type of property that have a better chance of not being redeemed...I have a friend in GA who ends up with properties all the time for a few thousand....granted they are usually land and mobile homes, but he still ends up with the property for very little....then he resells for good profits becuase he is also a licensed forester who does most of his work in WA state....a great skill if you are looking to buy land.

[Summit]

Personally I am not trying to argue this I am just saying you odds are not that good. When you said that in SC 5% go to the cert holder. From there the cert holder still has to take it thru the Foreclosure process. Which means the First and most of the time second will have the option of buying out your position. It is a common misconseption that it will automatically go to the Cert holder which is not true in 90% of the cases.. The property still has to go thru the foreclosure process in order to clear the Deed. And I know that the chances of the mortgage holder not paying off a tax lien are very low. Just because you have the cert does not mean you get the house without clearing the lien. They still have to go to a TAX Foreclosure.

[Summit]

http://www.foreclosurewarehouse.com/tax_foreclosures.php

Here is a decent link on Tax Foreclosures. Its a new day and I am still all about those other fun odds. I personally have bought Tax Liens for the past 11 years and have never gotten one back. My really good friend buys over a million dollars worth a year and has never gotten a property. Then again we have never been struck by lightining either. And as of today I have not  died from ignition or melting of nightwear. So I am doing really good today.

[taxlienadvisor]

thanks for your reply Summit..I agree with you, you are right absolutely right about the foreclosure process, chances are you may never get a property...I'm thinking though that eventually, with all the cert you buy, you will end up with one at some point....I hope one slips through the cracks for you.

What about Oregon....can you please tell me about the liens you have purchase there, int, and redemp....I would be disappointed in myself if I've been telling people all along that OR is only is a tax deed state...I owuld love to get some feedback from you.

thank you

[taxlienadvisor]

thanks for the website Mr Summit...much appreciated

[Summit]

To be honest with you all I really know about tax liens is that I buy them. Wait to get paid back and make money on the Interest. Here is my thoughts on this and please everyone keep in mind I am kinda a blunt person who just calls things like I see them. I don't research except to use google earth or Zillow and make sure there is a property there. If you are investing 500-2,500 on a house does it really matter what the house looks like? I don't even look at houses that we Short Sale and flip and I invest hundereds of thousands of Dollars on them. If you buy a Crack house for a $1,300 tax lien that the lender is going to pay you off on anyway does it really matter if you personally want to own the property? As far as OR goes I believe that it is a tax deed state I will look on some of my paperwork and see.

Please just to review MAKE SURE there is a property attached to the tax lien or MAKE SURE its at least a vacant lot worth more then the lien. I heard a story of a guy that ended up with a 4 foot by 8 foot piece of property on it. Then again that was just a story and I can't confirm that.