Oklahoma Tax Certificate REPORT

Today, I went to Leflore County, OK in hopes of buying some tax certificates. These tax certificates were old enough that I could apply for a tax deed immediately. I had intended to do that today, but let me tell you why I didn't buy anything.

There were 12 properties that fell under this category since the tax certificates/liens were originally sold at the Oct. 2001 tax sale. None of them were bought at that sale. In that event, they go to the county and can be purchased over the counter.

First of all, I'm not interested in the interest. I bought some certificates at the Oct. 2001 sale and my last one just got redeemed last month for $200 profit from the interest. (BTW, I got started in tax lien/deed investing after watching John Beck's commercial.) 8% isn't bad, but I might as well head down south to Texas for the 25% return. getting back to my "adventure"...

First, I researched the certificates by starting at the assessor's office to get the addresses of owners of the tax delinquent properties. At least 6 of the owners were in town and the market values were quite high, thus the likelihood that those would be redeemed was probable. I eliminated those off my list of "buys." Two of them have improvements on them, so again the likelihood is high that it would be redeemed before I could get the tax deed. Now, I'm down to four.

Most of the other ones were out of state owners and from experience they typically don't redeem their property. I found out later in the day that one of the owners had passed away.

Next, I went next door to check out the plat maps to see if the remaining properties were accessible. Two of the properties were landlocked and would not be worth acquiring. I don't have the heart to sell these properties to buyers and plus I could end up losing money that way if they did not sell.

At this point, I'm down to two which look promising. They are vacant lots in subdivisions, exactly what I like to deal in. They don't bring in the most profit, but buyers like them because 1) the taxes are usually low 2)typically, they are maintenance free.

With two properties in mind, my next stop was the county clerks office to determine who I would need to notify to complete the tax deed process. Here in Ok if you don't notify the owner, her interest is not removed from the title.

In searching the title for one of the properties, I found that the chain of title was broken. For example, Person A gives title to Person B. Now, Person B is the only one who can transfer title to Person C. What made this situation unique was the fact that some Person X transferred title lto Person C. Why did Person X transfer title when he never received in from Person A is a mystery? I decided to skip the headache of trying to figure that out. Maybe someone can help me out with this????

Now, I'm down to one property. The title has no liens or judgements on it and there is only one person to notify to get the deed. Looks like this will be a successful and profitable day, but wait I'm not there yet!

I head over to the treasurer's office to see how much in back taxes are owed. She tells me it will $100. I'm ready to write my check, but I remember that you never, ever buy a property without first looking at it.

I take a drive to check out the property. I have the plat map in hand, and directions to the parcel. I get to the street where the property should be on and then get to the cross street that should be right before this block. I come to a dead end. Wait a second, what's going on?. Why doesn't this street continue? Where is the other cross street that is supposed to be here? it's a dead end. Oh no. So I look at my map again. I'm on the right street, but it doesn't continue on. I have no way of accessing the property if I bought it.
There must be a mistake or perhaps the street continues on the other side. I proceed to go up one street to see if I can get around. No, dead end there as well. Same thing for the street before it. Then I find out the awful truth. There can be no street because the land takes a steep dive, not like a cliff, but lowers down gradually.

In short, even though the subdivision plat maps indicated that a street should be there it is not. Now, I know why the former owner allowed the property go for back taxes. She had no way to get to it.
It would take too much money to get the necessary permits to build a road to access it, so why would she bother?

Why would I bother buying such a property? My due diligence did pay off today by saving me from making a mistake, and I was certainly a little disappointed that I would not be coming away with any property today but tommorrow is another opportunity. There are tons of sales around the country every month. On the bright side, I did not end up with a property that I would not sell to a buyer.(I have this thing about disclosing everything to my buyer. I know of my unscrupulous buyers who do not. No amount of profit is worth the agony of knowing that I am doing wrong to a customer.)

I guess the lesson to be learned here is to perform all steps in the due diligence process. You must always visit the property you are interested in buying. Do not ever skip this step. don't rely on the plat map to tell you where the property is or where roads exists. They are known to be wrong. this was the first time that I had ever encountered this issue and it in all likelihood won't be the last. Next, make sure in any tax sale that all owners are notified of the sale. If they are not, their interest in the property is not wiped out. Finally, take your time and don't give up. Tax deed investing is by no means the easiest way of investing in real estate. Dont' buy into the hype of those infomercials or internet advertisements that you'll make money for minimal work. It does require lots of research and typically the sales are conducted in faraway rural areas in the middle of nowhere. If you don't get a deal today, I'm sure another one will put up tommorrow, next week, or next month. Don't worry about it, you'll do well as long as you stay the course. I've been doing this for the past two years and love the thrill of the hunt. Courthouses are my favorite place to be, but most of the people there are very helpful and courteous. Next stop are the California tax sales. I'm headed home! I've heard from Mr. Ron Starr and others that it has been very competitive. If I can pick up something at a discount, I'll be very happy. Good luck to all of you, and I hope you find this report helpful.