how does tax certificate work? Is bank forgot about previous owner's mortgage?

how could purchaser make money from tax certifcate obtain the house and resale for a profit?
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June 04 2009 - Orlando
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Answers (3)

In Florida you bid on tax certificates throught the county. What you are in essence doing is paying the back taxes, penalties, interest and expenses incurred by the county on behalf of the owner. This places you in a position to collect interest from the owner for your investment. There are limits. Two years later if the owner has not "paid up" you can file with the county to auction the property. High bidder gets the property and you receive your investent plus interest. No bidder and you get the property. Note you can also bid. If it is a homesteaded property the starting bid will be taxes + fees + 1/2 of the tax assesed value.

There are many companies with deep pockets that buy up the potentially valuable certificates and have no intention of owning the property. They will invest hundreds of thousands of dollars simply for the 5% return. It takes a lot of money, time and patience to actually make a reasonable dollar return. Buying one certificate for $2000 and a 5% return over 2 years will not lead to great riches.

Finally, and this is important. Those who do end up with a piece of property have a very difficult time getting title insurance for several years.

It can be done, it is hard work requiring lots of patience, money and risk. And just when you think you got a gem for nothing, along comes the owner or the bank who pays of the delinquent taxes at the last second.

I've been to several of these county auctions and watched the delinquent taxes get paid and would be "new owners" get pi$$ed.
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June 05 2009
Profile picture for wetdawgs
Very difficult.   If you have enough slush funds to pay the mortgage and maintenance for a couple of years while the house is on market, jump right in.

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June 05 2009
what is it with all the "money for nothing, get rich quick" douchery posts these days???

get a freaking clue, that kind of thinking is what caused the problem.

(and no, it doesn't work that way, ANY business with high profit and low entrance costs quickly becomes saturated and profits get driven down to lower levels. Or as somebody must have said, but you didn't pay attention: There is no such thing as a free lunch)
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June 04 2009
 
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