More Newbie Questions
Greetings all -
I own a few small rental properties here in San Diego. I have always heard about tax sales and lien certificates but I never bothered to find out more about them. Last week I finally decided to make a concerted effort to learn about them and I am quite interested. I have been reading alot of the postings at this website and I have found this to be the most informative site on line.
Lots of facts and experiences and not alot of spam which is very refreshing.
With that said here are some of my questions.
1 - I ran across a program offered by a guy named Roy Stubblefield. He has a website and he offers a documentation package on a per state basis that he claims to be very informative. I have sent email to some of the people who he had sold the package to and I got one response that was positive. I would list the url to the website but I dont want to get in trouble. Can I list that url? Has anyone heard of his package?
2 - I have read some of the more expert members at this website comment that california is not a great opportunity based on the fact that you may purchase the deed but it still remains in the hands of the tax collector. So if you pay off the tax bill of a negligient owner , and then in the future the guy does pay his taxes, you simply get paid off with no interest? Or if he never pays then the property goes to auction? So... if the property goes to auction, do you the original payer get paid off after the auction? Or better yet wouldnt it make more sense to simply go straight to the auction to attempt to get the property and not pay off the negligient taxes?
3 - One idea I have seen on other sites is the mass solicitation of owners who are about to have thier properties go to auction. Any thoughts on that? It seems kind of.... well... telemarketing like but if you send out 500 letters and get 1 deal then maybe it is worth it?
4 - I have seen some commentary that more corporations are getting into this business. Are there any thoughts that maybe it is to late for the little guys to come in and make money?
5 - I have noticed that the more experienced members on this site do all tend to agree that there are really a few states that seem to be where they concentrate on. I guess as a newbie to all of this I should focus my efforts on those states.
6 - Finally, I have read postings about Lennox and other large corporations that offer entry programs for individuals. Seems like the feedback is somewhat positive but the profits are definitely muted. Anyone have any comments on that? Anyone know of any private groups or partnerships that exist?
Sorry if these questions were lame. Hopefully I will be able to come up to speed and learn a bit... I do admire some of the people who have gone for it and won an auction.
Adam [ Edited by vewdodude on Date 07/07/2003 ]
I've only been attending auctions for Tax Lien Certificates for about three years in my home state (Louisiana). When I first started I bought a couple of books that were helpful as an overview (The 16% Solution by Moskowitz and Tax Lien Certificates by Yocom). They don't go into a lot of detail but they will give you an idea of how many of the states operate.
The most helpful information I got was when I went to a few of the auctions as an observer (almost all of the people there were more than glad to help). I called the tax assessor's office (or in some parishes the sheriff's office) and found out when the auction is held. Ours in Louisiana are once a year, usually in May or June and each parish (county) has it's own auction.
Louisiana isn't the best place to get TLC's because the redemption period is fairly long (3 years) and the land owner has an additional 2 years to take you to court and redeem. The interest is pretty good (here it's an initial 5% and 1% per month).
The parishes here do an excellent job of notifying delinquent land owners; which means that if you are the successful bidder there is little chance the owner will redeem. I have about 30 TLC's and less than 5 of them have been redeemed.
Also the type of bidding varies in many states. Here in Louisiana the amount of the tax that you pay and the interest you will receive are never in question. The bidding here is on per-centage of ownership. I've seen heavy bidding on large timber tracts get down to one percent. Which means that if the property isn't redeemed, the TLC owner owns a 1% undivided interest in the property with the original owner. Personally I don't want a TLC if it's less than 100%...it's too much of a hassle (to me) to have an undivided interest.
Other states have different ways of bidding. I've even read where some states have some type of lottery....
Good luck!
Mike in Louisiana (where the weather is hot and the food is hotter!!)