How to convert a tax lien certificate into a tax deed for "pennies on the dollar"

Imagine getting a $100,000 house or property for a few hundred dollars. When purchasing Tax Lien Certificates this is very possible and many people have obtained property this way. But you are more likely to get these same properties for a few thousand dollars. You must have some Tax Lien Certificates for this to work, as you are the person initiating the Tax Deed application (the first step in the foreclosure process) and you will know an approximate date when this process will occur. Remember, you started the Tax Deed application process and it usually takes six to eight months to complete.

Owning multiple Tax Lien Certificates gives you the ability to apply for the Tax Deed on all of them at the same time. This process will allow you, as a current or prospective investor, to save enough money to purchase real estate for “Pennies on the Dollar.” Many tax lien certificates are redeemed by the property owner prior to the actual sale date of the tax deed. The property owner must pay the value of their tax lien certificate plus the amount of stated interest owed to them. Also, the lower the value of the property, the more likely he is to get the property.

Owning multiple Tax Lien Certificates allows you a greater chance of obtaining one or two properties at your Tax Deed Sale. Several states have an auction format in these sales: the highest bidding price gets the property. However, the current US economy is great for investors because there is less competition from other bidders than there was three years ago and there are far more properties foreclosed on due to back taxes.

The price you will pay to obtain a property has fixed and variable costs. For example, in Florida, each county tax collector charges between $225 and $240 to initiate a tax deed sale for each tax lien certificate. The circuit court clerk in each county charges about $250+/- to finalize the sale of the tax deed.

If the property is occupied by the property owner (he/she lives in the home), then the prospective bidder will be required to pay half the assessed tax value (usually a few thousand dollars) plus all costs (tax collector). taxes and county clerk of the Circuit Court fees paid by you plus any back taxes paid by you, the owner of the Tax Certificate), plus paying you an additional 18% interest for all county costs for initiate the sale, plus all interest declared prior to filing for a property tax deed. Unoccupied properties (not occupied by the owner of the property) will not incur half of the fiscal cadastral value, but property taxes are usually much higher. You will get the property for around 2% to 20% of its value or you will get a very good return on your money.