FUN and PROFITS in TAX FORFEITED LANDS QUESTIONS AND ANSWERS

WHAT ABOUT TITLE INSURANCE ON TAX FORFEITED PROPERTIES

We get tons of questions regarding title insurance and quit title actions.  I personally never get involved in title insurance as I sell the properties subject to the buyer obtaining title insurane at his/her/its expense.  I know how to search a title in a matter of minutes.  However, there those who may feel they need a policy of title insurance to market properties acquired in this business at the highest possible price.  Here is a source for such insurance.
 

<<Thank you for your interest in Tax Title Services.=20
At present, it is extremely difficult to obtain title insurance on properties obtained from defaulted tax liens without a court foreclosure action. In certain jurisdictions, tax lien investors spend significant time and money pursuing judicial quiet-title actions in order to obtain title insurance on tax-deeded properties. Investors can experience direct economic benefit in having a process developed that would eliminate the need for quiet-title actions and the ability to obtain title insurance available without such delay. Tax Title Services has developed a process that would enable tax lien/deed investors to obtain title insurance on their tax-deeded properties without the need to file quiet title actions.

Tax Title Services Process:
Once you obtain a tax deed and the redemption period has expired, you would fax us a copy of your tax deed with the attached order form instructing us to begin. Our process is normally completed within 30 days as long as there is no errors in the process which would need to be cured. Most of that time is related to the insurable title search we order. Once we have the insurable title search and tax sale records, it doesn't take long to process.  As far as cost we have a tiered schedule which takes into consideration the lower value properties (normally vacant land) and gives discounts for volume. Compared to the cost ($1500+ -- "uncontested" nationwide average) and time delay value of a quiet title action, our fees are much cheaper.
Our fees include $250 for the insurable title search with any title underwriting required tasks, like a good faith investigation or property inspection, etc., included in that fee and $200 for our examination and review of the. This fee is a hard cost which you would incur anyway at your closing. This insurable title search is not only used for our certification process but is used for your policy issuance, meaning you only pay for one title search with an update instead of paying for one full search for the certification and another for the title policy issuance or resale transaction.

If your property can be certified or is "cured" by us (at no charge) to be "certified," the certification average fee ranges from $450 to $1500 (factoring in property value and volume discounts). If there is massive failure in the tax sale process and your property cannot be certified or cured and a quiet title is required, then all you pay is the review fee and title search ($450) with the insurable title search sent to your quiet title action attorney to use, which he would have to order anyway to conduct the quiet title action. We require the review fee and insurable title search fee ($450) upfront for every order to begin processing. We are working with other regional investors to help keep their costs down and can do the same for you.

Upon the completion of our process and we are ready to issue our Foreclosure Due Process Certification, we send you our review results with the invoice advising you that your property is ready for title insurance without a quiet title action. Upon payment of our invoice, we can obtain a title policy from First American Title Insurance Company for you at that time and/or when you have marketed the property and have a buyer under contract, we will coordinate and send the Original Certification and insurable title search to the closing office, which will be honored by the appropriate First American Title Closing office or agent we coordinate with on your behalf.

The following are just some of the results of utilizing our service:
1. Cradle to Grave Nationwide Tax Lien Foreclosure and Tax Deed Title Standardization
2. Save time (Up to a year) =E2=80=93 No quiet title period
3. Marketability=E2=80=93 Clients will have more qualified buyers with lenders because of immediate marketable title with title insurance
4. Income =E2=80=93 Clients wont lose any market time in turning over a non-performing asset

I hope this helps. Again, if you would like for us to begin processing your tax deeds, please let me know by faxing the tax deed with the attached order form instructing us to proceed. In order to give you the opportunity to see how our service works, your first file doesn't require the $450 upfront fee to begin processing. Test us out in order to truly appreciate what this
service accomplishes for you If you have any questions or need further information, please let me know.
Thank you!
Dave Schumacher - President
Tax Title Services
(714) 848-4750; Fax (714) 848-8170
taxtitleservices@aol.com

PROBLEMS GETTING PUBLIC RECORDS IN ILLINOIS

Hi Roy!

Delinquent Lists
Well, I don't know what I am doing wrong but I've taken off of work without pay two Fridays in a row now since the April 17th has come and gone and feel like I have scored -10 in my attempts to obtain delinquent taxpayer lists.  I want to send out your letters to delinquent taxpayers offering them a quit claim deed but can't seem to obtain any lists.

Last week we drove to Will County which is southwest of Chicago.  Today we drove up to Lake County which is north of Chicago and runs up to the Wisconsin border.  Lake County has annual TLC sales in December of each year.  In the absence of a certificate buyer's bid, the County enters an automatic bid at the maximum penalty of 18%.  So each year, every property is sold.

We went with the intention of trying to purchase a delinquent list but the lady told us that since everything is sold every year, there is no list until shortly before the next annual sale in Dec. 2000.  She said that the taxes are due between Mar - Oct. so nothing is delinquent yet.  She told us to read the statutes and I said that I had a copy of the statutes and had already read them but each county is extremely different.

We were told that we could purchase a copy of the 3-ring binder of county-owned foreclosed properties from the Dec. 1999 sale for $13, however, I want a list of delinquent taxpayers who have not yet been foreclosed on so that I can write them and offer them QCD's.  Besides, the girl warned us that this list is not the most desirable properties or else they would probably have been purchased at earlier certificate sales!

One interesting thing that the lady told us--if you purchase one of the foreclosed properties that the county currently owns, they will "pay" the taxes on it for you for the first year that you own it !!!  We can't figure out why they will give you one year of "free taxes" except for the fact that they are so glad that someone is finally buying it and taking the property off of their hands.

You may remember when I wrote you about the Chicago TLC sale, when I told the guy that I wanted to see the book of the 1999 scavenger sale results, he told me that I didn't need to see that book--that I should wait until the next sale in July 2001.

I am finding it very difficult to obtain delinquent taxpayer lists as each county seems to come up with some excuse or other.  And since I have never done this before, I just don't know what to reply to them.

Ques:  What am I saying/doing wrong that no one wants to let me have or at least look at a delinquent list?

Sealed Bids

I am going to my home in Ripon, WI on Sunday morning and plan on testing the waters there on Monday.  I have written to numerous Wisconsin counties and most, including the county that my hometown is located in, have replied back telling me that they auction off all foreclosed properties by mailed sealed bids and the bid goes to the highest bidder--except for one that evaluates what the potential purchaser intends to use the property for--and I don't think that's any of their business if I intend to keep it or sell it!

Several of the Wisconsin counties have sent me a list of the properties coming up for sale and state the minimum bid.  When I pick up the list in my county on Monday morning, if there are any properties in Ripon, I may seriously want to bid on them--especially if one is my next door neighbor as another neighbor told me that they heard that his property was going to be sold at a sheriff's sale!  The Sheriff's sale is on May 30, 2000.

MY COMMENTS:
I know this may not sound right but my policy is to always bid the minimum bid especially on a mail bid sale.
I do not care if a few others get a good deal.  I will always get a great deal if I do not get too greedy.  I may enter into competitive bidding only if I feel I can quickly sell the property for 4 to 5 times what I am paying for it. An example of this is a sale that I attended on 7 March 2000 which is document at
http://www.taxsales.org/taxsale.htm

A young couple is bringing me a $5,000 cashier's check plus $5,000 in $100 bills tomorrow morning on the two acre tract that I obtained at that auction for $5,000 (the only property on which I had any competition.  They are paying $27,000. I was asking $30,000 with $3,000 down plus $300 per month including 10% interest.  They are already approved for a construction loan of $119,000 to build a home on it.  I took back a mortgage for $17,000 payable at $200 per month with the entire balance due payable at the end of one year.  They will be getting a mortgage and paying me off in full.

By the way, I keep seeing all kinds of negative remarks about not beingable to get Title Ins.  posted on the Tax Sales Communites and other message boards.  Remember I purchased this property on 7 Mar 2000.  The County issued a Sheriff's deed which was recorded on 31 March 2000.  This couple received a commitment for a policy of title insurance from a Title Company that checked out the property records today.  The title company said it would not take more than two weeks to issue it.  I have a policy of never dealing with a title company and I told them so.  They are paying the entire cost of the policy of title insurance and for a survey of the property for the building for both the builder and Mortgage Company from whom they already have been approved for a $119,000 construction loan.  So much for Title Insurance.  I realize that in other areas of the country this could be a problem with doing a Quit Title Action - but not in this case.

I am selling 1.20 acres of the 4.20 acres which I purchased for a little less than $1900.  The lady who owns a home just south of this property is buying it for $7,200.  I still have 3 acres left and I am asking and will get $18,000 for it.  I also have a possible sale next week on the two one acre tracts that I acquired at the same sale for a little over $3,000 each.  The selling price on each is $15,000.
 

Ques:  What should I bid in a sealed bid in which I have only one shot to ensure that I might be the one to get the property?

COMMENT:  I never bid more than the minimum on a sealed bid type sale.
 

How do I determine how much to bid over the minimum bid to be sure to be the highest bidder without over-bidding on the property?  I don't remember reading in your manuals what the general rule of thumb is for submitting successful sealed bids as this seems to be a rather common sales practice up north.

Quit Claim Deeds by Mail

Ques:  How do you safely complete a simultaneous exchange of QCD and money order?
 

COMMENT:
The letter in the manual that I use states that I will send them the consideration along with a quit claim deed for their signature.
I trust them.  It would be mail fraud if they did not return the executed deed to me because they have agreed to do so by mail.  I have seldom suffer a loss.   I have purchased thousands of properties this way.  Even if you lost one out of ten you would still come out very well provided you only select delinquent property owners with properties valued at $10,000 or more.  I seldom solicit properties worth more than $40,000.
 

I am just curious as to how everyone trusts everyone else when they are all total strangers!  Suppose someone in another state has accepted my offer to purchase their property for $50 and agrees to give me a QCD.  So I go to the post office and get a money order and send it with a QCD form for them to sign and mail back to me.  Of course, they aren't going to sign off on the property until they have the money order in their hand.  However, since I am not there to make a simultaneous exchange of money order for signed QCD and since I don't know them from Adam, what is going to prevent them from taking the money order and not signing the QCD to send back to me?

Thanks,
Sharon Ann Thorndike

P.S.  Glad to see the new chat website and hope it will all be working perfectly soon.  I already signed up but I will not be able to get on it on Sunday night because I don't have access to a computer at my house in Wisconsin.
 

Hope this helps:

I may post this on questions and answsers on my website if you have no objection.

Roy

MY ANSWER

Hello Sharon:

I seldom go into an office an ask for a delinquent list because in 95% of the time you get the run-around. here is my suggestion for getting delinquent lists from and county in any state.

First read the public records statutes stating that you are entitled to such public records and at what costs.  Make a photo copy.  It is in each state manual.

Second:  Read the statutes relating to tax sales very carefully.  They will tell who has custody and control of the list that you want.  Each county tax collector in Illinois must keep a list of all of the tax certificates sold or bid in by the county.  That is the list you want.

Third:  Make a copy of the statute referring to the list you want.

Then write an FOIA letter (see sample for any state at:  http://www.splc.org/ltr_sample.html

Be sure an be extremely specific as to the record you want.  Quote the statute that requires the public official to whom you are writing to keep the record that you are asking for.

What I normally do when research a state is to do the above and write to each public official in each of the counties that has the record that I want.  Some will try to over-charge me.  Others will ignore the letter until I sometimes send it two or three times and threaten to take them to court  if they do not comply.  Sometimes advising them that you will write a letter to the editor of the their local newspaper to complain about the lack of service you are getting out of their office gets the trick done.

I will get back a few letters with the info that I want, many times for free.  Others will set a reasonable price.  I make copies of those positive replies to use when I have to write my second or third letter to the non-responders.

As an example of a statute the following is one record that you might want:

"35 ILCS 200/21-160 Annual tax judgment, sale, redemption, and forfeiture record

 Sec. 21-160. Annual tax judgment, sale, redemption, and forfeiture record.

The collector shall transcribe into a record prepared for that purpose, and
known as the annual tax judgment, sale, redemption and forfeiture record, the
list of delinquent properties. The record shall be made out in numerical order,
and contain all the information necessary to be recorded, at least 5 days before
the day on which application for judgment is to be made.

 The record shall set forth the name of the owner, if known; the description of
the property; the year or years for which the tax or, in counties with 3,000,000
or more inhabitants, the tax or special assessments is due; the valuation on
which the tax is extended; the amount of the consolidated and other taxes or
in counties with 3,000,000 or more inhabitants, the consolidated and other
taxes and special assessments; the costs; and the total amount of charges
against the property......."

The following is kept in the office of each county clerk:

"35 ILCS 200/21-252 Index of tax  sale records

 Sec. 21-252. Index of tax sale records. The county clerk may make an index
of tax-sale records. The index shall be kept in the county clerk's office as a
public record, open to inspection during office hours."

HERE IS THE PUBLIC RECORD STATUTES ENTITLING YOU TO COPIES OF THE RECORDS YOU WANT.
I suggest that you make a copy of this and attach it to your request for public information letter.

"§ 3. (a) Each public body shall make available to any person for inspection or copying all public records, except as otherwise provided in Section 7 of this Act.
     (b) Subject to the fee provisions of Section 6 of this Act, each public body shall promptly provide, to any person who submits a written request, a copy of any public record required to be disclosed by subsection (a) of this Section and shall certify such copy if so requested.

     (c) Each public body shall, promptly, either comply with or deny a written request for public records within 7 working days after its receipt. Denial shall be by letter as provided in Section 9 of this Act. Failure to respond to a written request within 7 working days after its receipt shall be considered a denial of the request.

     (d) The time limits prescribed in paragraph © of this Section may be extended in each case for not more than 7 additional working days for any of the following reasons:
     (i) the requested records are stored in whole or in part at other locations than the office having charge of the requested records;

     (ii) the request requires the collection of a substantial number of specified records.

     (iii) the request is couched in categorical terms and requires an extensive search for the records responsive to it;

     (iv) the requested records have not been located in the course of routine search and additional efforts are being made to locate them;

     (v) the requested records require examination and evaluation by personnel having the necessary competence and discretion to determine if they are exempt from disclosure under Section 7 of this Act or should be revealed only with appropriate deletions;

     (vi) the request for records cannot be complied with by the public body within the time limits prescribed by paragraph © of this Section without unduly burdening or interfering with the operations of the public body;

     (vii) there is a need for consultation, which shall be conducted with all practicable speed, with  another public body among two or more components of a public body having a substantial interest in the determination or in the subject matter of the request.

     (e) When additional time is required for any of the above reasons, the public body shall notify by letter the person making the written request within the time limits specified by paragraph © of this Section of the reasons for the delay and the date by which the records will be made available or denial will be forthcoming. In no instance, may the delay in processing last longer than 7 working days. A failure to render a decision within 7 working days shall be considered a denial of the request.

     (f) Requests calling for all records falling within a category shall be complied with unless compliance with the request would be unduly burdensome for the complying public body and  there is no way to narrow the request and the burden on the public body outweighs the public interest in the information. Before invoking this exemption, the public body shall extend to the person making the request an opportunity to confer with it in an attempt to reduce the request to manageable proportions. If any body responds to a categorical request by stating that compliance would unduly burden its operation and the conditions described above are met, its shall do so in writing, specifying the reasons why it would be unduly burdensome and the extent to which compliance will so burden the operations of the public body. Such a response shall be treated as a denial of the request for information. Repeated requests for the same public records by the same person shall be deemed unduly burdensome under this provision.

     (g) Each public body may promulgate rules and regulations in conformity with the provisions of this Section pertaining to the availability of records and procedures to be followed,  including:
     (i) the times and places where such records will be made available, and

              (ii) the persons from whom such records may be obtained"

Congratulations!  You have quickly discovered the worst part of this business.  It is deal with public officials.

See my Comments below regard your other questions.
 

At 11:07 PM 04/28/2000 -0500, you wrote:
Hi Roy!

Delinquent Lists
Well, I don't know what I am doing wrong but I've taken off of work without pay two Fridays in a row now since the April 17th has come and gone and feel like I have scored -10 in my attempts to obtain delinquent taxpayer lists.  I want to send out your letters to delinquent taxpayers offering them a quit claim deed but can't seem to obtain any lists.

Last week we drove to Will County which is southwest of Chicago.  Today we drove up to Lake County which is north of Chicago and runs up to the Wisconsin border.  Lake County has annual TLC sales in December of each year.  In the absence of a certificate buyer's bid, the County enters an automatic bid at the maximum penalty of 18%.  So each year, every property is sold.

We went with the intention of trying to purchase a delinquent list but the lady told us that since everything is sold every year, there is no list until shortly before the next annual sale in Dec. 2000.  She said that the taxes are due between Mar - Oct. so nothing is delinquent yet.  She told us to read the statutes and I said that I had a copy of the statutes and had already read them but each county is extremely different.

We were told that we could purchase a copy of the 3-ring binder of county-owned foreclosed properties from the Dec. 1999 sale for $13, however, I want a list of delinquent taxpayers who have not yet been foreclosed on so that I can write them and offer them QCD's.  Besides, the girl warned us that this list is not the most desirable properties or else they would probably have been purchased at earlier certificate sales!

One interesting thing that the lady told us--if you purchase one of the foreclosed properties that the county currently owns, they will "pay" the taxes on it for you for the first year that you own it !!!  We can't figure out why they will give you one year of "free taxes" except for the fact that they are so glad that someone is finally buying it and taking the property off of their hands.

You may remember when I wrote you about the Chicago TLC sale, when I told the guy that I wanted to see the book of the 1999 scavenger sale results, he told me that I didn't need to see that book--that I should wait until the next sale in July 2001.

I am finding it very difficult to obtain delinquent taxpayer lists as each county seems to come up with some excuse or other.  And since I have never done this before, I just don't know what to reply to them.

Ques:  What am I saying/doing wrong that no one wants to let me have or at least look at a delinquent list?

Sealed Bids

I am going to my home in Ripon, WI on Sunday morning and plan on testing the waters there on Monday.  I have written to numerous Wisconsin counties and most, including the county that my hometown is located in, have replied back telling me that they auction off all foreclosed properties by mailed sealed bids and the bid goes to the highest bidder--except for one that evaluates what the potential purchaser intends to use the property for--and I don't think that's any of their business if I intend to keep it or sell it!

Several of the Wisconsin counties have sent me a list of the properties coming up for sale and state the minimum bid.  When I pick up the list in my county on Monday morning, if there are any properties in Ripon, I may seriously want to bid on them--especially if one is my next door neighbor as another neighbor told me that they heard that his property was going to be sold at a sheriff's sale!  The Sheriff's sale is on May 30, 2000.

MY COMMENTS:
I know this may not sound right but my policy is to always bid the minimum bid especially on a mail bid sale.
I do not care if a few others get a good deal.  I will always get a great deal if I do not get too greedy.  I may enter into competitive bidding only if I feel I can quickly sell the property for 4 to 5 times what I am paying for it. An example of this is a sale that I attended on 7 March 2000 which is document at
http://www.taxsales.org/taxsale.htm

A young couple is bringing me a $5,000 cashier's check plus $5,000 in $100 bills tomorrow morning on the two acre tract that I obtained at that auction for $5,000 (the only property on which I had any competition.  They are paying $27,000. I was asking $30,000 with $3,000 down plus $300 per month including 10% interest.  They are already approved for a construction loan of $119,000 to build a home on it.  I took back a mortgage for $17,000 payable at $200 per month with the entire balance due payable at the end of one year.  They will be getting a mortgage and paying me off in full.

By the way, I keep seeing all kinds of negative remarks about not beingable to get Title Ins.  posted on the Tax Sales Communites and other message boards.  Remember I purchased this property on 7 Mar 2000.  The County issued a Sheriff's deed which was recorded on 31 March 2000.  This couple received a commitment for a policy of title insurance from a Title Company that checked out the property records today.  The title company said it would not take more than two weeks to issue it.  I have a policy of never dealing with a title company and I told them so.  They are paying the entire cost of the policy of title insurance and for a survey of the property for the building for both the builder and Mortgage Company from whom they already have been approved for a $119,000 construction loan.  So much for Title Insurance.  I realize that in other areas of the country this could be a problem with doing a Quit Title Action - but not in this case.

I am selling 1.20 acres of the 4.20 acres which I purchased for a little less than $1900.  The lady who owns a home just south of this property is buying it for $7,200.  I still have 3 acres left and I am asking and will get $18,000 for it.  I also have a possible sale next week on the two one acre tracts that I acquired at the same sale for a little over $3,000 each.  The selling price on each is $15,000.
 

Ques:  What should I bid in a sealed bid in which I have only one shot to ensure that I might be the one to get the property?

COMMENT:  I never bid more than the minimum on a sealed bid type sale.
 

How do I determine how much to bid over the minimum bid to be sure to be the highest bidder without over-bidding on the property?  I don't remember reading in your manuals what the general rule of thumb is for submitting successful sealed bids as this seems to be a rather common sales practice up north.

Quit Claim Deeds by Mail

Ques:  How do you safely complete a simultaneous exchange of QCD and money order?
 

COMMENT:
The letter in the manual that I use states that I will send them the consideration along with a quit claim deed for their signature.
I trust them.  It would be mail fraud if they did not return the executed deed to me because they have agreed to do so by mail.  I have seldom suffer a loss.   I have purchased thousands of properties this way.  Even if you lost one out of ten you would still come out very well provided you only select delinquent property owners with properties valued at $10,000 or more.  I seldom solicit properties worth more than $40,000.
 

I am just curious as to how everyone trusts everyone else when they are all total strangers!  Suppose someone in another state has accepted my offer to purchase their property for $50 and agrees to give me a QCD.  So I go to the post office and get a money order and send it with a QCD form for them to sign and mail back to me.  Of course, they aren't going to sign off on the property until they have the money order in their hand.  However, since I am not there to make a simultaneous exchange of money order for signed QCD and since I don't know them from Adam, what is going to prevent them from taking the money order and not signing the QCD to send back to me?

Thanks,
Sharon Ann Thorndike

P.S.  Glad to see the new chat website and hope it will all be working perfectly soon.  I already signed up but I will not be able to get on it on Sunday night because I don't have access to a computer at my house in Wisconsin.
 

Hope this helps:

I may post this on questions and answsers on my website if you have no objection.

Roy
 
 

A SUCCESS STORY AND AND A QUESTION

STRUCK-OFF PROPERTIES IN TEXAS

At 09:42 AM 03/30/2000 -0600, you wrote:
Hi Roy-

RE: Texas Struck-Off properties

I obtained a list of struck off properties from Austin County.  There is a
16 acre piece of land that went to action last month with a minimun bid of
$7,000.  Since it didn't sell, I can now go in and place a private bid, say
for $1,000.  If the Chief Appraiser accepts my offer, I get the deed.

I believe the previous owner can still redeem if he does not accept my Quit
Claim Deed.  If he does redeem, does he pay me 25% of $1,000, or 25% of
$7,000?  Who does he pay and how much?

Thank You Roy.

You've been helping people for a long time.  I appreciate that.

Brad King
Houston, TX

MY COMMENT:

I do not think the taxing jurisdicition will sell it to you until the six month redemption period has expired.  However, if they do, it is my opinion that the delinqeunt owner would have to pay you $7,000 plus 25%.  The reasoning is this.  If you get a deed from the taxing jurisdiction that jurisdiction transfers and sells all their rights, title and interests to you.

This is an excellent question and it is an excellent technique if you can find a taxing jurisdiction that will sell you the struck off property for less than the minimum bid during the redemption period.

If you get a deed from the taxing jurisdicition then if I were you, I would definitely contact the previous delinquent owner and try to get a deed or get him/her to redeem.  You would win big time either way.

Roy
 

Date: Tue, 12 Oct 1999 19:19:27 -0700

Hi Roy:

A little over a month ago I ordered your manual for California and Arizona on TLC. I decided to investigate, to my surprise after about week of trying I ended up with two parcel of land in Arizona for 750.00 with full cash value of $38000.00 and this is clear title. I never thought this was possible, thanks to you Roy; millennium year is looking very interesting.

I have a question, I found two other parcels of land, each land was issued tax certificate for year 1992,3,4; but not foreclosed yet. year 1995 state cp and no cp was sold since 1996. I know that those two parcels of land are worth 10,000 each and back taxes on each property is $1005.25 will bring it up to year 1999. I can not locate owner of property and people who holds tax certificate has no intension of foreclosing how would you go about getting those two parcels of land.

Your reply on this is very appreciated.

mas massa1@home.com

ANSWER:

You have two options.

One: Buy an assignment from the County Treasurer of the state held 1995 certificate and immediately apply for a deed through a court action. You can do this after the certificate is 3 years old in Arizona.

Two: Buy an assignment of one of the 1992,3,4 certificates from the certificate holders or any one of them. You appear to know who they are. You might even get them to assign the certificates to you for less than the taxes due. On those certificates the five years is up and you do not have to go through a judicial foreclosure. All you have to do is apply for a deed from the county treasurer.

I am proud of your success. Keep it up and keep in touch. We love success stories like yours.

It encourages others to get involved in this very profitable business.

Roy


QUESTIONS REGARDING AN UPCOMING TAX SALE IN KANSAS

At 08:31 AM 10/09/1999 -600, you wrote:

Hi Roy,

I just got back from research in Great Bend. I discovered that some properties have been to sale before and should probably be avoided (flood zones delapidated houses etc.). An interesig situation however, 3 lots 'in a flood zone' which have been to sale before, but there is also a couple of lots across the street 'also in flood zone listed by a realtor for 12-14k. What do you make of this?

Do you ever consider lots with mobile homes on them in a MH park?

I found a commercial lot, currently a used car lot that was previously a gas station. How do I find out if there is an environmental problem with this lot ie....old tanks still underground?

Do you always sell for cash or do you carry the note sometimes?

Thanks

BR

MY COMMENTS

Hello:

Many times the mobile home on a lot in a mobile home park is assessed as real property and goes with the lot. I have purchased many such deals because lots of people think they do not get the mobile home. All you need to do is check with the country appraiser and see how it is assessed. If it is assessed as personal property you do not get it. If it is assessed as real property you get it if you are the high bidder.

I would still go for the lots in the flood plain as there is usually no minimum bid and you can sometimes pick them up for $5.00 or so. They still make good trading material. Just because they are in a flood plain is no sign you cannot use them for something.

I do not know about the used car lot. I would still take a chance on it. Buy it in the name of a trust and have that property the only property in the trust. In the event of a problem you have avoid personal liability. Also, if it is currently being used as a used car lot you have a built-in tenant.

I almost never sell for cash. I sell for very low down payments and try to make the contract 20 years or more. I will normally sell for 10% of the selling price down (or less) small monthly payments which wuould take years to pay off and 10% interest. This way I get paid for a long time. Not only that but by not requiring cash or a large down payment, you can usually get a few more bucks for the property. What I am interested in is a lot of small monthly payments coming in over a long period of time.

Roy 


THIS PERSON IS INVESTING IN TAX LIEN CERTIFICATES IN ILLINOIS

The following is a series of emails between me an this customer. It is interesting from the stand point of the question asked and theresearch theories utilized by the customer. You will also learn a new technique here that is WIN WIN situation when investing in tax lien certificates.

Roy,

Almost all my TLC's are at the maximum 18% penalty here in Illinois. Single family residences get bid down to 4%-3%, so there is not a tremendous return possibility. My research and selection criteria was generally along the following:

1. Generally focused on those properties that were not going to be bid down to 4%, so roughly any property whose outstanding tax balance was less than $1,000. 2. For those properties left, I tried to confirm their location on the county plat of survey maps to eliminate those properties that were obviously problems. i.e. they were 3 foot strips of land, etc. 3. Automatically went after properties that only had 1 tax payment missed. 4. Automatically went after those properties that were adjacent to a larger property containing a residence. Reasoning that once the owner realizes he has to pay the tax on his home, he will also pay the tax on the vacant lot next to his house.

In targeting the smaller lien, high return strategy I realize its impossible to never make a mistake on a property. In exchange for receiving the high returns, I expect to have a few generate a 100% loss. The key would be to manage the number of complete losses. I estimated that the breakeven point investing in the 18% penalty liens (36% annualized) is about 74% redeemed. Also assumes that none of the 26% which are not redeemed have any value worth foreclosing on.

So at my current 44% redeemed rate, I was just wondering whether I could forecast, based on historical averages, where my redemption rate might end up at.

As a side note, I have purchased your manuals last year which gave me the incentive to increase my investment level in liens. I must admit that buying 125 liens and doing all the subsequent work has been exciting. I have been hesitant to try to employ your strategy of purchasing the property via quit claim deed. But I think that may be the next step for me, worst case is the owner realizes that he better pay the taxes and I've accelarated my cash flow.

I realize my question regarding the redemption rates is a little offbeat, but it would helpful in financially modeling the velocity of repayments. Not only to forecast a final redemption rate, but to also manage cash flow and reinvestment over the life of the portfolio.

Let me know your thoughts.

Thanks, Scott -----Original Message----- From: Roy Stubblefield <roys@wt.net> To: Scottt <cxp@dls.net> Date: Monday, July 12, 1999 2:22 PM Subject: Re: Your tlc question about statistics.

Hello Scott:

If you will do a little reseach before investing in tax lien certificates and only select those certificates on single family occupied residences you chances of the certificate being redeemed is close to 100%. If one of them is not redeemed then you have hit the jackpot. You will end up owning the single family residence for pennies on the dollar.

Can you tell me how you went about selecting the certificates on which you invested.

Roy

At 10:17 AM 7/12/99 -0500, you wrote:

Roy, Thanks for the message. I am trying to forecast how much of a problem I am going to have given my portfolio of TLC's has only redeemed about 44% through the first 6 months after acquisition. While the industry average for overall redemption may be 97%, I was wondering if anyone tracked the redemption rates over the life of a TLC. For example, statistics such as: 50% redemption at 6 months, 70% redemption after 12 months, 80% at 18 months, 97% at 24 months. Those kinds of statistics would help warn me if, at 44%, I am trailing the average and, therefore, would expect an overall redemption rate lower than 97%. Currently my goal is to generate the interest income and not acquire the property. Any additional input would be greatly appreciated.

Thanks for your help.

Scott Coffey

From: Roy Stubblefield <roys@wt.net>

Date: Sunday, July 11, 1999 9:07 PM

Subject: Your tlc question about statistics.

Hi: We have found that over 97% redeem. The majority are redeemed during the last few weeks and many are only redeemed after you file legal action to obtain a deed. There are techniques that you can use to invest in tax lien certificates where 99% or more will be redeemed. There are other techniques where you can invest only in certifictes that will not be redeemed. It depends on your motivation. Do you want the interest or do you want the property?

Roy

Tax Research Foundation

http://www.taxsales.com

Hi:

I think the letter writing technique in the manual would pay off big for you in two ways.

No one: This might encourage the delinquent owners to redeem sooner resulting in a much higher yield for you. A penalty, not interest, is imposed. That penaly applies regardless of when redeemed.

Second: You should only offer $25.00 for a quit claim deed. If you get a taker you then own the property without having to go through an expensive foreclosure procedure.

Not only that you then know that you are not going to receive any yield on your tax lien certificate so you can invest accordingly.

I think you can easily dispose of the properties that you purchase for a nominal amount.

Not only that if you take title in a trust to the properties you acquire for $25.00 you can offer the properties for sale out of the trust for a very low amount with an agreement that there all past due taxes will have to be paid by the buyer. Of course when they pay those taxes that amount would go to you since you are the certificate holder.

I think you will like this technique.

Gina, who is one of our hands-on training coaches and one of our coaches for our year long coaching program has recently sent out less than 50 letters to delinquent property owners in an area of Kern County, California, and has already received back 11 responses agreeing to give her a quit claim deed for $25.00.

I notice you are a subscriber to our FREE Newsletter. I have sent out a couple with ideas of how to market vacant lots in the last few weeks.

Roy


ATTENDS A SEMINAR - THEY WANT $1400 JUST FOR MATERIALS. 23 Jun 99

Hi,

My name is Brent. I live in Glendale AZ. I went to a seminar a couple of days ago here about this same investment. His name was Saen Higgins and he was speaking about this exact same thing. I am very interested in this buisness and would REALLY appreciate any information of advice regarding this investment. After the seminar you had the oppourtunity to purchase this information and instructional packag ,but ths cost was around $1400.00. The reason I went to this seminar is because I don't have much money and I want to make more for myself and my kids. He talked abot Tax Liens Certificates and what you do to aquire thes but for the info to contact the right people and what forms to use I have to give them $1400.00. HELP ME!!!!!! I cant afford that. Please let me know who i can get this info and can i get it here?

Brent

ONE OF OUR COACHES RESPONDS: 23 Jun 99

Hi Brent:

Your first step should be to go to www.taxsales.com and order a manual for $25.00 for the state of your choice. Read every word of this manual. Some people can take this manual and go forward without any further help, where others need more guidance. If you are one of the first catagory then you can take this information and start using it. If you are part of the second group we offer classes on walking you through the process step by step in a money back guaranteed program. I'm sure the seminar you went to did not have any guarantees.

If you would like further information down the road after you have received your manual, you can go to the above url and submit your name and address for more information on our coaching programs. Our hands on coaching program is $2,300.00 and has a money back guarantee provide you meet the requirements.

Good luck to you.

Gina Hinds

COMMENT AND QUESTION

Hi Roy, I want to thank you for your Texas guide, it is info packed and just looking around in my area and using the Harris County Appraisal District website, I've been able to look at various properties right in my area that I might have an interest in. I do, however, have a question about the Montgomery County area sale. The area's website shows that it may be a bit of a distressed area income wise. Do you think that if a person were to acquire two or three of these properties that they would have a pretty difficult time flipping them? Take a look at the Montgomery County website and look for the local paper and the most recent ads for rental and property for sale. Another area to look at within that paper's classifieds was for employment, to see what the economy is like there. I value your opinion, and wonder what your ideas are on the possibilities for property flips there. You are an amazing man, Roy. I have followed a lot of your responses on investor's network, your website, and would love to meet you in person just to shake your hand and show my appreciation for someone who is a true financial adventurer. Lunch is on me........ Sincerely, Mark S. Lytle Houston, TX (Small town just north of the raging metropolis of Manvel.)

ANSWER: Even properties in a distressed area can be excellent investments in this business. Even poor people need a place to live. If you can buy it for no more than 25% of its fair market value, I do not see how you could go wrong. These decisions are, however, up to you.  It is your money you are spending.

QUESTION: Tell me about tax lien certificates.

ANSWER: It is true that you can recieve what is sometimes considered astronomically high annual yields by investing in tax lien certificates. In Texas, as an example, which is not a tax certificate sale state, the owner of the property at the time of the sale has 6 months to two years to redeem by paying a penalty as opposed to interest. The penalty is 25% if redeemed during the first year. It is 50% if redeemed during the second year. Therefore, the minimum amount of annualized yield is 25% even if the property is redeemed on the very last day of the redemption period. If the property is redeemed, for example, in three months the annualized yield is a whopping 100%.

In some states, the annualized yield can even be greater. In Georgia for example the penalty is 20% and must be redeemed in 12 months. This produces a annualized yield of 40% if redeemed exactly at the end of six months.

There are Profit Making Techniques discussed in each state manual as to how to encourage property owners to redeem quickly.

QUESTION: Do I need to spend several hundred dollars attending seminars and buying expensive "How to books" to get the information needed to invest in Tax Lien Certificates.

ANSWER: Absolutely not. I have prepared a separate manual for each state. Everything you need to know on how to acquired these tax delinquent properties BEFORE the tax sale, AT the tax sale, and even AFTER the sale is explained. You will receive a list of public officials to contact to get your name placed on their mailing list to receive notices. Suggested form letters to delinquent property owners are included in each manual. You will be able to study the pertinent statutes relating to tax lien certificate sales and tax sales. Your rights under the public record statutes are thoroughly explained.

QUESTION: Do states having tax certificate sales also have tax land sales?

ANSWER: Yes. In almost every jurisdiction many tax lien certificates are not bid on by any purchaser. In those cases, the county or taxing jurisdiction becomes the holder of the certificate. In most cases when the time for redemption expires, the county has to foreclosure its liens. These properties are normally put up for bid at public auction and the successful bidder gets a Sheriff's Deed, Collector's Deed or Treasurer's Deed to the Property. In many cases there is no minimum bid on such properties. You can acquire fantastic bargains.

QUESTION: Can properties be purchased over the counter in most states?

ANSWER: When a state offers tax lien certificates for sale and there are no bidders the taxing jurisdiction becomes the holder of the tax lien certificate. When those certificates are foreclosed and the property is put up for public auction and there are no bidders, these properties become city, municipality, county, state or taxing jurisdiction owned properties. In most cases these properties can be purchased "over the counter" so to speak. In some jurisdictions a bid is required and the property is then put up for sale at public auction and when there are no other bids you acquire the property for your bid. In a lot of cases that bid can be far less than the total amount of taxes due.

QUESTION: How can I obtain a tax sale manual for the state of my choice?

ANSWER: There is an order form. Just fill it out and mail it to the address on the order form. Upon receipt of the order and a money order, personal or business from U. S. Jurisdictions or Certified funds denominated in U. S. Dollars from Other Counties, along with your e-mail address, I will e-mail you a zipped copy of the state(s) manuals ordered. You can request these manuals in Microsoft Word Document format, PDF format, or just in plain text format.


>Hello Roy, >Hello:

See my comments below. It looks like these counties are making up their own rules and doing what they please. Certainly not according to the state statutes. I wouuld write and ask them how they can do this in view of the statutes. I would ask them where in the statutes it allows them to make up their own rules.

I would be very interested in looking at the responses. This would be information that needs to be passed along to others.

>I need some help. I have a few questions about a sale in Illinois, which is >where I live, and I have this manual. > >I called Kankakee county and was told that they do not sell tax liens. They >said they have a county trustee's group which holds all tax liens. I was >told, that next May they will have a property sale, for the tax liens which >have not been redeemed. Is this legal? I had the notion that tax liens were >regulated by the state and were to be offered to public buyers. >next question: >COMMENT; I do not understand how they can do this under the statutes. I agree with you. They should be offered to the public.

>I called another county and they are having a "Annual Tax Sale." (1998 Levy) >Taxes will be offered in parcel number order and Any Special Assessments >will also be offered. > >Q: Are we talking about selling Tax Liens here? Or are they selling the >ground? >Do they mean special assessments for that particular property? > >Prior to the beginning of the "Annual Tax Sale" a deposit in the amount of >$5,000.00 or the amount to be purchased, whichever is less, must be >deposited in cash, cert. check, etc. etc. etc. > >Q: Why does such a large cash deposit have to be on hand? Q: "or the amount >to be purchased, whichever is less." Q: How do I know if I can purchase >anything, when this is an auction? >

COMMENT: This is obviously a tax lien certificate sale. Why such a large deposit is required or how they even have a right to do so under the statutes is beyond me. I would like to see the authorigy they quote for being allowed to require a deposit. Like you said, how do you know whether you would be able to buy anything?

>Q: This state taxes every six months. At a tax sale, if I purchase a tax >lien, and the property owner does not pay the next periods taxes, and >someone else buys the next tax lien, who will the property pass to if the >owner never redeems? COMMENT: You have to read the statutes very carefully. In order to protect your investment in tlc's in Illinois you are required to perform certain notifications and on a timely basis or you will suffer a loss.

> >They offer Tax sale lists. there are three offerings. They have parcel and >amount, another enhanced list with mailing address and the third is a >diskette of tax sale file. The costs are from $50.-80. each. Any >recommendations? > >This County is SW of Chicago by 50+ miles. It is a mediocre County, but the >properties are marketable. COMMENT; The public records statutes state they cannot charge you any more than the actual costs of duplication of a public record. I seriously doubt if it cost that much just to make a duplicate copy of a diskette.

>I read all of the success stories you send and wonder, why a blue collar >county like this has such a large deposit, when People in California, >Florida, Arkansas, Oklahoma seem to be getting great properties for a small >amount of money. Am I looking at the wrong State? COMMENT: From the problems you have encountered, I think your best technique in Illinois is to obtain a list of delinquent property owners and write the suggested letter in the manual inclosing the article from Arizona Republic and the article on Capital Gains. Offer $50.00 to $100 for a deed. You can then just redeem the properties on which you get deeds or sell them before a deed would be issued to the county or the certificate holder. This way you bypass all these stupid, self-made rules and regulations. Your big job will be in getting the lists from the counties. They are public records and you are entitled to them. > >I would appreciate any help or input you can provide. >Thanks, >John Wallis. > 


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