How Often Does an Investor Lose in Florida Tax Liens?

The answer is a resounding “NOT VERY OFTEN.”  Having a full understanding of what to look for in a lien should help to shape your decision on if you should buy a particular lien.  We are going to discuss three things to look for to determine if we will meet our goal of making money.  We should be able to walk away making 18% of our money on a regular basis.  This is the standard by which we should measure our success.  Let’s consider what we should do:

Do your best to buy current tax year liens.  In Florida, a lien is described as having a tax year, as well as a certificate year.  For example, a lien may have a Tax Year of 2016 and a Certificate Year of 2017.  This means the taxes occurred in 2016 and the certificate was issued in 2017.  The redemption period (the deadline for the property owner to pay you) will be in 2019.  Understanding when you are to be paid will help you to maximize your investment.

Check the tax records to see if there are any other outstanding tax liens for the property you are considering.  Having other tax liens can be fine on a property that has enough value to support paying additional liens.  It is when a property has accumulated more tax liens than the value of the property that there can be trouble.  Knowing the number of past tax liens can help us make effective decisions in our investing.  Avoiding properties that have acquired too many tax certificates will keep us from throwing our profits away.

In Florida, a lien will be paid several ways.  It can redeem on time.  It can redeem before its time.  A lien can be paid before the foreclosure.  It can be paid between the foreclosure and the auction.  The property can be auctioned and then the lien holder paid.  All of these ways will result in the lien holder being paid.  A little homework will ensure successful tax lien investing.

If you follow these guidelines, you will invest successfully.  In addition to above, avoid contacting the property owner.  The county will take care of all communications.

It is very difficult to lose from Florida tax liens.  Do not lose track of your certificates, as they act as money.  They have a seven-year statute of limitations.  If you forget about them, you lose.  Stay organized and on top of your investment and you will make good money.  Do not buy tax lien certificates on properties that have so many liens that the money owed in tax liens is greater that the property value.  If you can add and subtract, you can be a successful tax lien investor in Florida.