From The Field: Florida Tax Sales

Florida is the state with the most online tax lien sales. Now that they’re over it’s a good time to take a look at the results and how some of you fared in the Florida tax sales. I always get a few e-mails from new investors that try to participate in the Florida online tax sales. Invariably, they make the mistake of bidding too high on the wrong properties and don’t get anything.

It’s true that there is a lot of competition at these sales and many of the properties are bid down to .25% – but the institutional buyers wouldn’t be doing that if it wasn’t profitable for them. There is a minimum penalty in Florida of 5% – and that’s a penalty not an interest rate. So it doesn’t matter if the lien redeems in 2 years, 2 months, or 2 weeks you get a straight 5% on your money. So institutional buyers will bid down to .25% on pretty homes that they think will redeem right away. But if you look at the results from these sales, you’ll see that these same bidders averaged much higher than .25% on their winnings. That’s because they also bid on other properties that they did not expect to redeem so soon – other properties besides residential homes, and then bid much higher rates on those properties.

If you want to be a successful bidder you have to bid on properties that are not what everybody else wants, and you have to bid on lots of them, not just a few. If you’re only bidding .25% on pretty houses, then you may have to bid on close to 200 in order to get one or 2. But if you bid on land (that you did your due diligence on and you know is good), you can get close to 18%. And if you want to make sure that you’ll get paid on your lien, bid on land that has a mortgage on it.

Here’s how smart reader was able to have good success one of the Florida tax sales after learning from his experience at his first tax sale:

“I placed ~30 bids for around 15% in the Nassau County auction and won nothing… After reviewing the results I got an idea of what %’s the parcels go for. So I re-adjusted my strategy for a different auction in another county in Florida the following week. This time I placed 40 bids. I won 10 certificates [worth ~$200 mostly, or less each]. 9 are for vacant lots at 6% (in retrospect I think I could have gotten them for 8-9% looking at the results)  and one was a homesteaded property for 0.25%. I bid on a bunch of homesteaded properties to test it out to see how thick the competition is, and I found out it is SUPER competitive.”

In the last member training that I did for TaxLienLady Members, we went over the results three different Florida tax sales. One at the beginning of the tax lien sale season, one in the middle of the season, when all of the sales were going on, and one at the end of the season when most of the tax sales were over. We went over what was actually going on at these sales and how to have successful bidding strategies for future tax sales. The replay of the webinar training is posted in the members area. If you’d like to find out more about joining Tax Lien Lady’s Members Area, go to http://TaxLienLady.com/MembershipMain.htm.

 

About Joanne

Joanne Musa is known online as the Tax Lien Lady. She helps people who want to invest their money profitably in tax liens and tax deeds and get high returns on their money without the typical risks of real estate investing or the uncertainty of the stock market. Get your free special report on "7 Steps to Building Your Profitable Tax Lien Portfolio" by Clicking Here.
This entry was posted in Online Investing, Tax Lien Investing, tax sales and tagged , . Bookmark the permalink.

5 Responses to "From The Field: Florida Tax Sales"