What You Missed May 2016 General Meeting
by Rob Earhart

A Funny Thing Happened on the Way to the Tax Certificate Sale!

Walter Kaminski of “YouandMeRealty.com”

May 3, 2016

Walter introduced himself and his business by displaying his early childhood pictures. He began with, “if you are not laughing at yourself, you’re not having any fun.”

My signature workshop will be during labor day weekend and will be teaching how to buy at tax sales. May is the tax sale month where 67 counties in Florida have sales going on.

Walter also talked about his foreclosure workshop and has been working with foreclosures for many years.

Tenants think you just make lots of money but you have to be educated in many areas: buying, managing, maintaining, and selling.

“Money talks, I cannot lie, I heard it once, it said goodbye,” quoted Walter. You have to learn how to manage money from all sources.

He explained, “I only provide education at my workshops, and do not upsell or provide boot camps.” “If you go to www.YouandMeRealty.com you can see all the workshops I offer.”

One of the first books I read was, How to wake up your financial genius, by Mark Haroldson. “It changed my life.”

“Eight years ago, the returns on money markets were low, and since then they have not gotten any better,” bemoaned Walter.

Everything in real estate is a tradeoff. What is your rate of return? With landlording vs. investing?

Walter showed a video of all the different taxes we pay and talked about specialty taxes, like property taxes. “In January, the property appraisers set the price you are going to pay for that year. March is when you get the various exemptions, veterans, first responders, etc. March 1, taxes are delinquent and they have to list auctions for three weeks in the newspaper,” informed Walter.

Late August is when the trim notices are sent out. September is when you can appeal to get your taxes adjusted. Mid November, your tax bills are sent out and you can pay them.

You can buy tax certificates in many states, but Florida has over 40 counties that sell on the Internet. The bidding goes from 18% down to ¼% and the lowest bidder is the winner of the auction.

In Florida the first $25,000 is not taxed because of Homesteading and the next $25,000 is exempt from everything except school district taxes. If the house is Homesteaded, you have a safer investment. On a $75,000 house, the equity is $50,000 so your investment is relatively safe.

The book Investors guide to county tax sales in Florida, by Tilley, is my bible, affirmed Walter.

From May 1 to June 30, you can buy the tax certificates. Interest accrues from June 1st but, If it is redeemed on June 1, you will not get any interest. After that you get that month’s interest. If at any time in the future the owner pays the taxes, you will get a check. If after 2 years they do not pay, you can foreclose on the property and force the property into auction. These are non-judicial actions.

The only defense you have to owing the money is to pay the taxes. If you do not take action within that 2 years, you will lose the opportunity to foreclose. 99% of the tax deeds are redeemed.

Tax certificates are liens and go ahead of the mortgages.

Pinellas county is a $2,000 deposit account but Hillsborough is 10% of the bid.

The interest is simple interest, not annual. If you only get 5% on the tax certificate and get paid off in a couple of months, you annualize it and it gives you a high rate of interest. Then do it again and you get velocity and your money grows quickly. If it stretches out over years, you end up with a lower return.

Different counties have sales at different times, so you can bid throughout the month.

It used to be you could get a homesteaded property for minimum $100, but now it’s $250 minimum.

“More important than return on investment is the return of investment,” exclaimed Walter, as he informed us the time your money is out is more important than the interest rate. If your return is 5% and you get it the first year, it is 5% of the principal. If it is still out until the second year you are now at 2.5% and if it goes longer you get a lot less return.

“Tax deed properties are interesting, can be treacherous, but can be profitable,” declared Walter in closing.