Florida Tax Liens are big business, and Ted shows you why a high-growth state like Florida with a mountain of tax liens available is such a profitable place to invest.
Watch the video above or read the summary below as Ted walks you through the process, the dos and the don’ts.
The topics Ted’s going to cover are:
- Why the Sunshine State is a Booming Place for Tax Lien Property Investors
- Florida Tax Lien Certificates Are Big Business
- How Many Tax Liens Are Available in Florida?
- Tax Certificate Investment is a Business of Abundance
- Getting Tax Liens Over the Counter in Florida
- Bidding at a Reverse Auction for Tax Liens
- Tax Lien Certificates Are a Passive Investment
- Florida Tax Deed Auctions
- Tax Liens Are Secured by Real Estate
- Common Mistakes People Make at Tax Lien Auctions
- Buying Tax Delinquent Property in Florida or New York? A Comparison
- Have an Exit Strategy When You Buy Tax Liens
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Why the Sunshine State is a Booming Place for Tax Lien Property Investors
Let’s talk about Florida tax liens. You’re going to love this because I’m going to show you and demonstrate a lot of different things that you normally wouldn’t even know about, but you’re going to be surprised.
I’ve been involved in this business, for round numbers, 30 years, and I’ve been teaching it for about 25 years. I started out with tax lien certificates, and you might want to do the same thing.
Why are you here? Most people are here because they want to make money. So let me show you some steps on how to do that. Before I finish, I’ll even show you a few steps to make sure that you avoid the big mistakes.
I’ve been in the teaching business for 25 years. I have four full-time coaches, and we have three facilitators here in the office.
We’re answering questions for people all day, every day, and we also answer questions with a certified coach every Wednesday night. I’ll come back and tell you some of those things but this is all about Florida tax liens.
Let’s talk a little bit about why it’s so good in Florida to do this. Now, Florida isn’t the only state that sells tax lien certificates. The United States is divided into about a 50-50 situation where half of the states will sell tax lien certificates.
That simply means they’re going to issue a piece of paper because a person or a property owner did not pay their property tax. So those are just pieces of paper that you can buy that will give you rights in the property. And I’ll come back and explain more about that in a minute.
The other half of the states, well, what those states are going to do is they’re going to actually sell a tax deed.
The tax deed means that the state, the local county has gone out and they have seized, they have confiscated a property because the property owner didn’t pay, and now they’re going to sell it back into the market at a very low price because they want to get it back on the tax roll.
Florida Tax Lien Certificates Are Big Business
Let’s talk a little bit about Florida. This is a big business in Florida. You’ll find in the average year, at least the past few years, there are one million certificates available in the state.
Now those are all sold at local county auctions. So if you were to call the county and you wanted to know how many Florida tax liens they have, I’m going to show you a couple of examples.
For example, I’m going to pick up a newspaper here and hold it in my hands, and it’s quite thick. It’s a good-sized newspaper. And I’m kind of thumbing down here so I can get to the middle of it without dropping everything on the floor.
How Many Tax Liens Are Available in Florida?
Anyway, there are a lot of Florida tax liens. This is an announcement for the auction, and there are no pictures in this newspaper. It’s just a list of tax lien certificates. Now, are there a lot of them?
I’m going to tell you, in Jacksonville or Duval County, they’ll have, round numbers, 30,000 or 35,000 tax certificates available.
I’m just showing you the amount in that newspaper. Now, you can’t see it, but these are just little lines, and the little line gives you the property tax number and how much is owed on the tax. But you could buy any one of the tax lien certificates there in that county.
A Million Tax Liens!
Let me go over a couple of other counties, and give you an idea how big of a business this is. This is a big business. There are one million in the state. In the Tampa, Florida newspaper. Same kind of thing, it’s just lines, and lines, and lines of tax lien certificates.
Now, there are no pictures in these newspapers. All these newspapers show you Florida tax liens. There are no stories, there are just hundreds and hundreds? No, no, thousands and thousands.
So in Hillsborough County, Tampa, Florida, they have about 40,000 or 45,000 certificates in the average year. Now some years, maybe a little less, some years, a little bit more. I’ll go over one more to give you an idea.
I’m looking at the Miami Herald, and they’re announcing a tax auction there. No pictures, just thousands, and thousands of tax certificates.
I want you to give this just a little bit of thought. It’s a list. There are going to be 65,000 tax lien certificates available for anyone that wants to buy them. So we’re going to teach you how to do that in this series.
So Florida is a state of round numbers of like 20 million people. We have a big influx of population from the high tax states because there is property tax here, and there’s sales tax, but there’s no income tax in Florida. And our tax rates are very low because we don’t waste a lot of money running the governments. We run the governments pretty efficiently.
So there are 67 counties. Why am I telling you that? Because that’s 67 different places for you to buy tax lien certificates just in the state of Florida. I said there are a million certificates available. They won’t be able to sell all the Florida tax liens. They just won’t be able to.
Tax Certificate Investment is a Business of Abundance
This is a business of abundance. There’s always going to be too much. There are going to be too many tax lien certificates; there are going to be too many tax defaulted properties, which are tax deeds. And there are going to be plenty of auctions for you to go to. So you can go to the auctions, or you can do them online.
Most of the tax lien certificate auctions now are online. Previously they were all offline, and you had to go to the county, get this particular list. Get the list and then go find the property and so on.
We can do all that online, and we can teach you how to do that online so that you can sit wherever you are right now, which is probably on a computer, and guess what? You can be doing the same thing and buying tax liens and deeds online, just using your computer.
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Getting Tax Liens Over the Counter in Florida
Some of these counties will have so many tax lien certificates, they can’t sell them. So what they will do when they can’t sell them, is they’ll put them on another list, which is a subject of one of my blogs called Over-the-Counter. So you’ll want to go and look at that.
What really takes place there is if they didn’t sell it at the auction, what they do is they send those Florida tax liens over to a surplus lands list, a leftover lands list, a scavenger list, a forfeited lands list, it’s all the same thing under different names.
You can just call the county, or you can email the county and say you want to look at that list. And you have to explain that it’s the list that didn’t sell at the tax lien auction. It didn’t sell. Those properties are available, and there’s no bidding.
Bidding at a Reverse Auction for Tax Liens
If you want to buy Florida tax liens, all the bidding starts at 18%. So that’s the highest rate the state pays. The next bid is 17 and a half. The next bid after that is 17. That’s going to go down to 16 now, and It can bid all the way down to just less than 1%. My point I’m telling you is that it’s a reverse auction. The lowest bidder gets the tax lien.
Now you’re saying, wait a minute, Ted. Auctions always go up. Yes, I understand that. These auctions go down because they’re trying to protect the property tax. They’re trying to protect the property owners.
So the more bidding that goes on for that property, the more it comes down, and that’s less interest that the property owner is going to have to pay.
Here’s how a Florida tax lien works. If the property owner doesn’t pay, the local government issues a certificate. The certificate pays 18% if no one bids it lower, but if people bid it lower, it could go all the way down to a quarter of 1%. That’s how low it could go. The point is, the lower it goes, the less money you’re going to make.
So don’t go to those auctions and start bidding it down. You want to make 18%. Remember, when you go to a tax lien certificate auction you are just buying a piece of paper.
Let me just pick up a piece of paper here. That’s what you’re going to buy. You’re just going to buy a piece of paper like this, and this piece of paper is going to have your name on it. It’s going to have the interest rate; it’s going to have the county, and that’s exactly what you get paid on.
They’ll pay it to that name, so if it’s in an IRA, they’ll pay it to that IRA name, and they’ll pay whatever percent that you won the bid at. If you ended at 16%, you’ll get 16%. Then it will tell you when you’re going to get paid, and that is when the people come in and pay their tax.
Tax Lien Certificates Are a Passive Investment
Will you have to go out and maintain that property? Will you have to be in the property management business? No. This is a passive investment. You just sit on your rusty dusty. So this piece of paper has a lot of power.
Now Florida is going to have a million of those pieces of paper. I said one million. So there’s plenty for everybody.
It’s a passive investment, and people fly from many other states just to come here during the auction time. It’s not necessarily to fly anymore. You don’t have to travel to the auctions anymore. You can do all of it online. So you’re getting the idea.
If you buy a tax lien certificate, what you’re concerned about is you want to get paid. So you’re going to raise your hand at that auction. You raise your hand because you want that. You can raise your hand online, or you can do it offline, either way.
So you raised your hand; you said you wanted that particular tax lien. They’re going to issue that to you, and it’s going to have a number on it. Now they’ve issued it to you, and why did you do that? Because you wanted to make money. Well, these certificates make up to 18% interest in the state of Florida. That’s a heck of a good rate of return.
Florida Tax Deed Auctions
At the end of two years, if those people haven’t paid, then what will happen is you’ll petition the state, and they’ll have another auction. Why will they have another auction? Because now they’ll have a tax deed auction, and they will then sell it at auction.
If someone comes in and buys it at the tax deed auction, you’ll get all the money that you invested, plus the high interest rate.
Tax Liens Are Secured by Real Estate
So the beauty of Florida tax liens is, you invest with the government. You get a check back from the government, and you have a predictable, certain, and secure investment. Predictable, certain, and secure. Because if you don’t get paid, you will get the property.
Let me say that again. If you don’t get paid on a tax lien certificate, you’re going to get the property. It doesn’t get much better than that.
Common Mistakes People Make at Tax Lien Auctions
Let me tell you about a couple of mistakes people make. They say, “Oh Ted, this is so safe and secure. I’m just going to buy them all online.”
I have no problem with you buying them online, but there are two things you need to do if you’re going to buy a tax lien certificate or a tax deed.
These are the two biggest mistakes, so I’m going to give them to you right now. You should write them down.
Most Common Mistake #1
Mistake number one is people don’t look at the property. They just buy something and assume it’s going to be a good deal. Or they pray that it’s going to be a good deal.
Well, I can tell you, praying is not a good business strategy because you might get there and the place is burned down. It might have been in a flood area. It might have been through a hurricane. I don’t know what could happen, but you don’t want to buy anything unless you know it’s there.
I was telling the ladies, you wouldn’t marry a guy unless you saw him. Well, it’s the same situation here. So that’s big mistake number one.
Most Common Mistake #2
Here’s big mistake number two. What are you going to do with this certificate? What if they don’t pay? If they don’t pay, you are going to get the property. Let me say that again. If they don’t pay a tax lien certificate, more than likely, you’re going to get the property.
If you get the property, what are you going to do with it? Well, you’re going to want to sell it. Then I’m going to suggest that you should’ve gone out there and looked at it and figured out what it would sell for. Because if you can’t sell it, then you’re going to lose your money.
The point is you always want to look and see what’s there. Secondly, you want to make sure that you have an exit strategy.
Buying Tax Delinquent Property in Florida or New York? A Comparison
People ask this question, so let me try to cover it. One question people ask is should they get in a high growth state like Florida? Or should they invest in New York, where they have a declining population?
Here’s the situation. When you’re in a fast start situation, you want to be in a place like Florida, because there is a lot of activity, a lot of things going on, a lot of tax lien certificate auctions, and a few tax deed auctions. As we come to market now, you’re going to find it’s really a fast start state.
Whereas New York is losing people, hundreds of thousands every single year because they’re a high tax state, and they have turmoil in their economy. Their governor doesn’t want people working during the virus and all the rest of it.
Florida is back to work, and everything’s okay. In New York, it’s a depressed market. So there will be more tax defaulted properties in the state of New York than there will be in the state of Florida.
Now, if you’re going to buy those, you’d better steal them. Let me say that again, if you’re going to buy those, you’d better steal them.
Have an Exit Strategy When You Buy Tax Liens
In either place we could buy, there’s not going to be any mortgage, but what are you going to do with what you buy? You’d better make sure that you know what you’re going to do before you buy. The biggest mistake people make is they don’t plan an exit strategy.
It’s going to be easy to exit in Florida, and it’s going to be slow to exit in New York. That’s my forecast.
We hope you enjoyed Ted’s lesson on Florida tax liens.
Florida tax liens offer a safe, certain, and predictable return on your investment. You can earn high interest rates, and it’s all backed by the government. Additionally, there are so many Florida tax liens available, they can’t sell them all, so there’s something for everyone, and then some.
Florida tax liens are a passive investment. If you want to profit from real estate without having to mow lawns, make repairs, and deal with tenants, Florida tax liens are an excellent investment vehicle. Of course, the auctions in Florida are reverse auctions, which makes the bidding process for Florida tax liens a bit different. But as long as you understand the rules and don’t make the two most common mistakes, you can do very well for yourself.
Unlike some states like New York, Florida is a high-growth state. So even if you end up owning the property, it’s much easier to implement your exit strategy in Florida, and Ted can show you how to do that.
If you’d like to learn how to reap huge rewards from investing in tax liens and tax deeds, Ted Thomas provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops, web classes, and personal coaching with certified coaches.
Get started today by taking advantage of this Free Gift from Ted. Act now, it costs you nothing and will give you a big head start!
Ted Thomas is America’s Leading Authority on Tax Lien Certificates and Tax Deed Auctions, as well as a publisher and author of more than 30 books. His guidebooks on Real Estate have sold in four corners of the world. He has been teaching people just like you for over 30 years how to buy houses in good neighborhoods for pennies on the dollar. He teaches how to create wealth with minimum risk and easy-to-learn methods.