In Florida, OTC tax liens and OTC tax deeds present unique investment opportunities. However, it’s essential to understand the process and the distinctions between these two options.
So let’s talk about what tax lien certificates are, how they work in Florida, and what makes them different from over-the-counter tax liens. We’ll explain where you can find OTC tax liens in Florida and what precautions you should take.
Tax Lien Certificates in Florida
Tax lien certificates offer a unique investment avenue in Florida. When property owners fall behind on their property taxes, local governments issue tax liens on these properties.
These tax liens are then auctioned off to investors in what is known as a “reverse auction.” During this auction, the interest rate is bid down incrementally, and the winner is the investor willing to accept the lowest interest rate as their return. In Florida, the interest rate starts at 18%.
If you’re the winning bidder, you receive a tax lien certificate, entitling you to collect the unpaid taxes, plus interest, from the property owner. If the property owner does not pay before the redemption period ends, then the property is sold at a tax deed auction. But what happens if no one bids on the tax lien at the auction?
What Are OTC Tax Liens and Tax Deeds?
OTC (over-the-counter) tax liens arise when tax lien certificates don’t sell at regular auctions. Conversely, tax defaulted properties, known as “tax deeds,” result from property owners failing to redeem the tax lien, leading to auctions where properties are sold outright. When neither sells at auction, they become available for over-the-counter purchase.
Navigating this process may seem complex, but a good starting point is reaching out to the County Tax Collector’s office. Explore the county website for rules and crucial information.
Finding OTC Tax Liens in Florida
OTC tax liens in Florida refer to unsold liens from regular tax lien certificate auctions. To locate these opportunities:
- Contact the County Tax Collector’s Office: They can provide auction rules and lists of properties for sale.
- Educate Yourself: Understand the differences between tax lien certificates and tax defaulted properties.
- Attend Tax Lien Auctions: Observing the process can provide valuable insights into why some tax liens don’t sell.
It’s important to note that OTC tax liens grant the right to collect interest, not property ownership. If the owner doesn’t pay taxes within the redemption period, a new auction will occur.
Understanding OTC Tax Deeds
OTC tax deeds offer immediate property ownership after purchase. These properties didn’t sell at regular tax deed auctions and are now directly available from the county. The county is only interested in collecting the back taxes, so these properties can be obtained for pennies on the dollar.
When seeking OTC tax liens or tax deeds, be prepared to communicate your specific interests to county officials, explaining that you want a list of properties that did not sell at the tax lien or tax deed auction. They may use different terminology, such as surplus lands or forfeited lands. Ensure clear communication to avoid misunderstandings.
Do Your Research Before Buying Tax Liens and Deeds
Keep in mind that participating in OTC purchases involves risks, so thorough research is essential. OTC sales are as-is transactions, and the county won’t be responsible for property conditions or title defects. Thorough research is vital before purchasing any OTC tax lien or tax deed.
Conclusion
While the world of OTC tax lien sales and tax defaulted properties in Florida may seem intricate, understanding the process can enhance your chances of success. Distinguish between tax lien certificates (rights to collect interest) and tax defaulted properties (property ownership).
Thoroughly research any properties of interest; they didn’t sell at regular auctions, which potentially indicates risks. Always remember that OTC sales are as-is transactions, so you should be diligent in your investigation.
Should you encounter difficulties, don’t hesitate to request a conversation with the county treasurer. They are often well-versed in OTC sales and can provide valuable guidance. Stay confident, diligent, and well-informed to explore the opportunities of investing in OTC tax liens or tax defaulted properties in Florida.
If you’d like to know more about tax lien certificates and tax deed investing Ted Thomas provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops, web classes, personal coaching with certified coaches, and an interactive map and auction calendar research tool that allows you to visit each county online to find the details about upcoming auctions.
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