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Frequently Asked Questions
1) Who can invest in tax certificates?
Anyone that has a Social Security Number or a Tax ID Number can invest in tax certificates.
2) How can I take possession of tax certificates?
You can take possession individually, jointly, as a partnership, under a trust, under a company, under various retirement accounts, etc.
3) I have never bought tax certificates before, can you help me?
I will walk you throughout the process from the time you buy my tax certificates until you take possession of a property.
4) Why invest in tax certificates?
The interest rate of return is usually between 8% to 18% apy. Savings accounts and MMA pay about 2% apy. The stock and bond markets fluctuate too much. You will either get the property (by a Tax Deed foreclosure) or you will get a very high interest rate of return.
5) How much do I need to get started?
You can spend as little as $200.00 for one tax certificate or you can invest as much as you can afford to invest.
6) How secure are tax certificates as an investment?
All Tax Certificates are backed by the value of the property it is attached to. Tax certificates I invest in (for resale and for myself) are scrutinized by my wife and I. I only invest my money in tax certificates that have a value of less than 4% of the zillow.com value of a property. Example: a tax certificate with a current value of $500.00 is worth +/-$80,000.00 according to zillow.com property values.
7) Do I own the property by buying a tax certificate?
No. You don't own the property. You own a government lien on the property which gives you the right to file for a tax deed (foreclose) on the property and possibly get the deed for the property.
8) How long does it take to get the tax deed on a property?
A tax certificate must be held for 22 months before a tax deed can be applied for. Example: I (the seller) may have owned it for 12 months and you (the buyer/investor) must own it an additional 10 months for a total of 22 months.
9) What are my costs to get the tax deed for a property?
Your initial cost will be buying/investing in my tax certificate. You pay nothing else until you apply for the tax deed to the property. When you apply for the tax deed you will need to pay other outstanding taxes to the county. This amount varies between no other back taxes up to three other years of back taxes. The County Tax Collector charges about $240.00 to start the process and the Clerk of the Circuit Court charges from $200.00 to $300.00 to finish the process..
10) How long does this process take?
The County averages between six to eight months for the process.
11) What happens to the money I paid to the county?
According to Florida Statutes, your money starts to earn 18% apy interest from the time you started the tax deed application throughout the process. During this time the property owner could pay his/her property taxes. If that happens the property owner must pay: all the money you paid to the County, the value of the tax certificate you originally bought plus 18% apy interest on all the money you paid. This money is paid to the County and within one week the County will pay you all this money back.
12) What happens to a bank loan on a property?
A tax lien is a government lien that you own as an investment. As such it is superior to all bank loans and other liens. When you take possession of a property with a Tax Deed, all bank loans and other liens are wiped out. Other government liens are not wiped out with a Tax Deed though. This includes an IRS lien or a code enforcement lien.
13) If they are such great investments then why aren't you foreclosing on these properties?
I invest/buy in about 1,200 to 1,500 tax certificates a year. Normally I would apply for a Tax Deed on between 15 and 25 tax certificates after the allotted time. The Florida economy has been rough the past seven years and I found myself in a place where I would have to apply for a Tax Deed on about 160 tax certificates each year. I couldn't afford that many foreclosures and decided to sell some of them on eBay. There was a great demand but I felt eBay charged to much to list (costs I had to pass on to buyer/investors). We created a website and started selling tax certificates for $60 or less over the current value.
14) How do I get started?
By picking up your phone and calling us or sending us an email for a personal consultation.
15) What are the benefits of buying high yielding Tax Certificates?
The opportunity to get a property for "Pennies on the Dollar" should be a real incentive to invest in Tax Certificates. If you buy the high yielding Tax Certificates then you will either get this property for a very low price or you will get the current value you paid plus the stated interest rate from the time you bought the Certificate until the property owner pays the back taxes.
