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Author Topic: Tax deed sales in Florida are insane this year  (Read 38493 times)
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speedfreeksteve
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« on: April 13, 2010, 09:55:14 PM »

I am only posting this because I'm not worried about someone else getting in on my action due to the huge number of people getting deals this year. I've seen multiple homes go for $1000 or less... many vacant land plots for $100. I'm excited and have a US check on the way as we speak so that I can bid ASAP.
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Jayz
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« Reply #1 on: April 14, 2010, 07:19:15 AM »

Property taxes in States are insanely high too. Is that true? Years ago, a fellow in Albany NY area told me he had to pay $10,000 property tax for his $150k worth house. That's insane, isn't it? I started to believe it. There has to be a reason people dump their property for $1,000 or less.
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speedfreeksteve
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« Reply #2 on: April 14, 2010, 01:01:41 PM »

Dollar for dollar taxes are slightly more there. If you don't pay on time the interest and penalties can be extreme.

One thing to be careful. Of is the florida homestead exemption which basically saves people from losing their primary residence. Best bet to avoid this is to bid on condos, lots, or cheaper secondary homes.

Since a few people msg'd me.. Here's the site that I'm bidding through. The counties contracted out this site to hold their tax deed auctions:

www.realforeclose.com

Also be careful the difference between a tax deed sale (similar to what we call a tax sale) and a tax certificate sale which is very different and fairly risky in Florida.
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Pfm1011
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« Reply #3 on: April 14, 2010, 06:20:23 PM »

Have you looked at the foreclosures or just tax deeds? Am I reading this right that under the foreclosure auction the final bid is the final price ( plus some processing fees)  I am seeing foreclosures sold anywhere from half appraised to all the way down to south of 5 K for 200 to 300k appraised..What am I missing here??
« Last Edit: April 14, 2010, 06:51:46 PM by Pfm1011 » Logged
speedfreeksteve
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« Reply #4 on: April 14, 2010, 07:05:30 PM »

Before I say anything I recommend that anyone serious about investing in Florida go there yourself and investigate the areas that you might like. You can only tell so much on the internet. I have been going to Florida multiple times a year my whole life, my parents have a place and it's like my second home when I visit them. Sticking with areas that you are at least somewhat familiar with is not essential, but definitely decreases your risk of making a poor decision.

I have looked at foreclosures. One property that I bought in 2008 was a bank foreclosure. 120x80 waterfront canal lot in nice subdivision for under 20k. Bought it from a bank for way below market value at the time. Nice enough property, but if/when property values go back up I will have it up for sale ASAP since I think I can find better deals to sink my money into.

Many of the so-called "deals" out there are short-sales, where the value of the property has dropped to less than the mortgage amount. The seller tries to get somewhere close to what they owe on their mortgage (but usually not even enough to cover that) so that the bank will hopefully just take that amount and the bank will just let the owner go without penalty. These short-sales are a LONG process and not worth the hassle for most people unless they are looking at a very high end property. In other words, it's probably not a good strategy for someone just looking to flip a property.

There's also a large inventory of condo and townhouses built around 2005 that are technically brand new and have never sold. Most of these the builder was asking 200k+ when built and now these are selling (or should I say not selling) for 100k or less. The risk here is being one of the only occupied units in the complex for a long time to come.

Many parts of Florida, especially Miami have more than 10% of ALL properties currently foreclosed on by either banks or local counties. There's no shortage of inventory right now, so I wouldn't go jumping on the first pretty looking place you see if it's something you plan to buy for yourself long term.

A final word of warning.. don't expect to buy anything in Florida and flip it within 24 months for more money. That's very unlikely. Many people in 2007 after the real estate crash were planning that.. and many are below even the crazy low amounts that they paid at the time.  The best bet is to find some value properties that you don't mind holding onto for awhile, especially ones that you might be able to rent out or at least enjoy using yourself. The rental aspect is another discussion, but in my opinion people don't realize that this isn't 20 years ago where people would pay to rent out just about anything in Florida. Times have changed. There's way more rental inventory out there now, and people now in their 30's and 40's just aren't as gung ho about going to Florida and renting a place or retiring in Florida as much as their parents were other than the once in a lifetime obligatory trip to Orlando... and stay away from Orlando properties anyways.. they hold no value and it's a crappy place to retire to.

Please don't private message on this topic.. other topics are fine. I'm getting people asking me the same questions and I'd be happy just to answer them here so I only have to type it once.




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speedfreeksteve
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« Reply #5 on: April 14, 2010, 07:17:20 PM »

Have you looked at the foreclosures or just tax deeds? Am I reading this right that under the foreclosure auction the final bid is the final price ( plus some processing fees)  I am seeing foreclosures sold anywhere from half appraised to all the way down to south of 5 K for 200 to 300k appraised..What am I missing here??

I missed some of your question so will answer that separately. First of all the appraisal you can take with a grain of salt. I REALLY don't trust the appraisals at all in Florida right now other than a ballpark in that a 200k appraised property is probably significantly better than a 100k appraised property. In the end, one could really be worth 120k and the other 60k. If the appraisals in Florida were all accurate right now, the counties would likely risk bankruptcy from lack of tax revenue, so keep that in mind.

But yeah.. right now the tax deed sales make our Ontario tax sales look like a ripoff! Also compare the sheer volume of properties being foreclosed on versus Ontario. I see single counties holding 25 tax deed sales per day for 3 months. No comparison to what we see here in Ontario. I would guess that Florida has upwards of 10,000 "tax sale" properties this year alone.. and I'm probably understating the amount!



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Pfm1011
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« Reply #6 on: April 15, 2010, 05:36:38 AM »

 I am seeing foreclosures sold anywhere from half appraised to all the way down to south of 5 K for 200 to 300k appraised..What am I missing here??

Looks like what I  may be  missing is the banks coming in and redeeming.  Are the banks redeeming in most of these sales if there is any deal there ? Many have the plaintiffs max bid hidden so are  many of the  foreclosures  bank scoops..
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speedfreeksteve
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« Reply #7 on: April 15, 2010, 07:59:59 AM »

 I am seeing foreclosures sold anywhere from half appraised to all the way down to south of 5 K for 200 to 300k appraised..What am I missing here??

Looks like what I  may be  missing is the banks coming in and redeeming.  Are the banks redeeming in most of these sales if there is any deal there ? Many have the plaintiffs max bid hidden so are  many of the  foreclosures  bank scoops..

About the banks.. No. They already own enough properties that they can't get rid of. They are just walking (running) away from the tax deed properties. If you look at many different cases, most of them have no plantiff bidding at all, and you also don't know which plantiff is bidding. I do know that some condo corps are bidding on units in their own complex to recoup lost maintenance fees.
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DRD
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« Reply #8 on: April 15, 2010, 11:40:21 PM »


Are you buying these properties outright or are you buying a % certificate with possesion a year down the road? And is all legal and possesion paperwork done by the county or is the onis put on you as in most other states?
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speedfreeksteve
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« Reply #9 on: April 16, 2010, 04:44:50 AM »


Are you buying these properties outright or are you buying a % certificate with possesion a year down the road? And is all legal and possesion paperwork done by the county or is the onis put on you as in most other states?

Kind of doesn't make sense to me to hold, let's say a $3000 tax certificate on a property and then 3 years later someone wins it in auction for $2000 and then you're out $1000 and get no interest.

A tax certificate doesn't ever give you ownership of a property. You still have to bid on the tax deed as well and then if you win pay off the tax certificate to yourself.

You use a title insurance company for the transaction. They are quite reasonable. In Florida you generally don't use lawyers for a real estate transaction and there is no land transfer tax, so closing costs are very cheap.
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DRD
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« Reply #10 on: April 16, 2010, 06:02:30 PM »

Thanks for your previous reply

 I guess what I am asking is can you buy a tax sale in florida outright? looked into it a number of years ago and at that time it was not possible...still had the 1 year offset for ownership.
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speedfreeksteve
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« Reply #11 on: April 16, 2010, 07:25:18 PM »

A tax deed sale is buying a property outright. It's very similar to Ontario "tax sales". Once the tax deed is signed by the county (soon after the transaction is completed) you own it from that point on.

The whole foreclosure process in Florida takes a minimum of 2 years, and the tax deed sale is the final step after the minimum 2 years have passed.
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KENORA
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« Reply #12 on: April 16, 2010, 08:10:59 PM »

help me to understand a couple of things. When looking at a listing it has
1 Final judgement amount
2 Assessed Value
what are the differences? and how do they affect bidding.
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speedfreeksteve
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« Reply #13 on: April 17, 2010, 11:50:29 AM »

Assessed value is what your taxes are based on just like in Ontario. It's a rough estimate of what the property is valued at, but just like in Ontario it can be skewed higher or lower than what the property might actually be able to sell for on the open market.

Judgement amount is the amount of money that the courts have decided that the property owner owes all of the plaintiffs that have filed suit against the property owner. This is often a mix of banks, mortgage companies, contractors, lawn maintainence companies, car finance companies (when their car loan is secured against the house), etc. Along with the drop in property prices since 2005, that's how a 100k property can often have 300k or more owing against it. Fortunately the tax deed sale "cleans up" the debt from any of these claimants. One thing to be cautious about is if you see one of the plaintiffs listed as Floride govt, or US gov't then you're best to stay away from bidding on that property unless you have a lawyer look into how much is owed to those claimants since their claims on the property DO survive the tax deed sale. Although you might be able to pick up a good deal on those ones and then make some sort of settlement with those governments, but definitely not something for the faint of heart.

For the most part the rules are very similar to our tax sales here with the exception of the Florida homestead exemption (you're best to google that one if you want more details since I'm no expert on that part).
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speedfreeksteve
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« Reply #14 on: April 17, 2010, 01:04:07 PM »

I have to somewhat retract my statement about the banks buying up some of the bids. After some more extensive research in some counties I've found that they are buying up some of the properties that the owner has defaulted on. Usually for pennies on the dollar of what the original mortgage was. I don't imagine any of them holding the properties for any extensive period of time though.

A sidenote too.. be careful about bidding on places built between 2005-2007, some have chinese drywall and are uninhabitable until the places are redrywalled, and sometimes the plumbing and electrical needs some replacing. Chinese drywall is not like asbestos or uffi. It won't kill you or hurt you much. It just smells bad and sometimes causes accelerated corrosion in plumbing and electrical.

Even on the open market chinese drywall condos sell for about 75% less than the same condo that doesn't have chinese drywall. Great way to find an almost new condo though for cheap that needs a handyman.
« Last Edit: April 17, 2010, 03:01:33 PM by speedfreeksteve » Logged
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