What You Missed - May 2019 - General Meeting
Investing in Florida Tax Certificates for Fun and Profit, or
How To Rob Banks Legally
Walter Kaminski, You and Me Realty
You cannot talk about tax certificates without talking about tax deeds, because that is where the certificate leads. No matter where you are, there are government taxes and, as an investor, you should understand the laws.
You can always go to the county tax roll and find information about properties.
Walter introduced his workshops and introduced his disclosures as “not being an attorney, a foreclosure specialist, or any other professional.” “I am a real estate broker,” he explained.
Walt continued, “My three-day tax certificate class is a participation program and is the last Saturday in May during closing of the tax rolls.” It will be held from Friday, May 24th through Sunday, May 26th, and will coincide with several county Tax Certificate Auctions, so you will be able to bid during the class.
The banks are the largest buyers of tax certificates. They pay you 1% interest on savings while they are earning a lot more from the certificates.
“The Power to tax is the power to steal,” quoted Justice Marshal. Walter then showed a list of taxes that continued on and on, listing all the taxes we now pay.
Walter then explained the timeline for Florida home taxes. On January 1, when the home is lived in, you begin the tax year. That is also when you can apply for Homestead Exemption. Then, on March 31st, the certificate lists come out, describing delinquent tax rolls. On the last weekend of May, the Auctions are held. On May 31st or June 1st, the batches close and the tax sales are done. Then, in June, July and August, there are supplemental sales going on. Then, in late August, the trim notices come out, showing the new taxes due. The taxes are due in November through March of the next year. If not paid by April 1, the property is listed on the delinquent tax rolls.
In Florida, we have 67 counties and 40 have online sales. Some are on RealAuction and some on Grant Street. There is a lot of competition in the highly-populated areas, so you can do better in the smaller counties, especially the ones that are not online.
Walter showed several books that are available describing how to invest in tax liens. One is the 16% solution by Joel S. Moskowitz, which has been around for about 16 years. It is still the best one around and is available online.
An Investor’s Guide to Florida Tax Certificates, by Reid F. Tillery, is one of the books I own.
June 1st is when the interest begins to accrue. The interest begins at 18% but it often gets bid down to ¼%. If the tax is paid in the first few days, you will only get your principal, no interest. After 15 days, you will get at least one month’s interest. The certificates expire after seven years. Once it has been delinquent, then, after two years, you can file a foreclosure and bring it to sale. At that time, you will be paid out on your investment, with interest.
There are two types of bidding, proxy and direct. In direct, you bid 3%, you get 3%. In a proxy county, if you bid 3% and the next bid is 7 ½%, you get the 7 ½ %.
You need to register, fill out your W-9, and make a deposit. Then you can bid up to 10% of your bid amount and you will have one day to cover the balance.
Walter suggests that you get set up in many counties because of the competition. Most people are going to pay their taxes, but he cautioned, “I like to make sure it is homesteaded because they have lived there and will want to catch up.”
Once you foreclose and it goes to sale, Florida is a non-judicial-sale state and the sale is final.
Florida Statute 501.1377 is the statute for owner-occupied homes. I would recommend you study up on the laws as they pertain to tax certificates, if you want to be successful in bidding.
In Pinellas County, you must deposit a minimum of $2,000 to be able to bid. You also must have deposited enough to cover 10% of any bids you want to make, in all cases.
Walter handed out a packet of information describing his classes and a great resource list, with many websites pertinent to Real Estate Investors.
He stayed around and answered several questions.