This applies to other foreign investors as well
Recently there has been a lot of interest in tax lien investing from foreign investors, especially our neighbors to the north. I’ve gotten some questions or comments from Canadian investors that lead me to think that there are certain people promoting tax lien investing to foreigners that are not telling the whole story. I thought it would be helpful to my foreign subscribers to post my answers to these comments here so that everyone could benefit.
Question:
Based on your explanation, Florida is the state with the most amount of tax sales in the country. As I am interested in acquiring some retirement property in the state of Florida. I beleive my main focus is in the Florida State district …….most likely in the Orange County ( Orlando) or Hillsborough county ( Tampa Bay) area as a starter. Since I beleive the properties there are the most desirable for Canadians and most likely easy to flip and resell should I be fortunate to foreclose on some non performing assets located there.
Answer:
First you should know that it is almost impossible to get property in Florida from a tax lien. First of all most tax liens redeem and you hardly ever to get to foreclose on the property, but in Florida you never get to foreclose on the property. Instead of foreclosure if the tax lien doesn’t redeem the investor can apply for the lien to go to a deed sale. If it is property in Florida that you want you are better off investing in the deed sales in Florida. There you are actually buying the property and you will need more money for deeds than for liens, especially in Florida because the bidding does not start at back taxes but at 25% of the assessed value of the property. There are a handful of FL counties that have online tax deed sales.
Secondly the counties that you mentioned are tourist areas with big cities. The competition for liens or for deeds will be very stif in these counties. It is better to bid in counties that are at least a couple of hours away from the big cities where everyone wants to own property, and where the propery values are quite high. The Florida deed sales are a good place for foreign investor, especially those that are online, but not in the counties that you mentioned. Those 2 counties have online tax lien sales but they do have their deed sales online.
Question:
I am from Toranto Canada and I want to invest in Texas. My main goal is to get greater rate of return but if I get a property that’s fine as well. I want to go to Texas because it’s a penalty state and the penalty is 25%. And because it has a short redemption period of only 6 months and even if the deed redeems in 1 week I could still get a 25% return on my money.
My goal is to keep getting redeemed in the shortest time and get the highest rate of return as I would like to keep doing it over and over, reinvesting the funds in order to make more profit. I would like to start small by investing about 10K-15K. Then in the future I can invest more for sure as I have available funds.
Answer:
Texas is a redeemable deed state with a very attractive penalty amount and short redemption period for non-homesteaded and non-agricultural properties. But because you are actually purchasing the deed to the property you will need at least $50,000 just to buy one deed in Texas. Plus it will be expensive for you to travel to Texas and that will eat into your profit. I suggest that it is better for you to start closer to where you live if you want to buy and sell properties. The state of Michigan has many couties that have online tax sales, and New York state has a few couties with online tax deed sales as well.
If you want only the return on your money and do not want to own properties, I suggest that you start with the online tax lien sales. Coming up are online tax lien sales in Maryland, Louisiana, and Florida. Maryland has the shortest redemption period – 6 months in some counties , but Louisiana is the easiest state for foreign investors to purchase in.
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