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May 3, 2010 Special Report

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May 3, 2010 Premium Member Special Report

Florida Internet Tax Lien Sales

Hello Premium Members. Welcome to Internet tax lien auctions in Florida.

Florida is an amazing tax lien state. Here you get to experience the full range of tax liens, tax deeds, over-the counter tax liens and over-the-counter tax deeds.

Tax Sale Dates: Florida statutes require tax lien certificate sales on or before June 1 of each year. Therefore, most sales are in May and some are actually on June 1. With the recent Internet auctions, many sales start in May and end on June 1.

Interest Rate: Interest on a tax lien certificate starts at 18% and is bid down during the auction in 1/4% increments to as low as 1/4% or even 0%. Any bid between 1/4% and 18% is guaranteed a 5% fee regardless of when the certificate is redeemed. When I used to attend live events in Florida, bidders would yell "one-quarter" or just "quarter" meaning they were willing to bid all the way down to 1/4% interest knowing they would be guaranteed at least 5%. This works well if the lien is redeemed in a month or two, but not as well if it is redeemed right before the end of the redemption period 23 months later. If the bidder chooses to bid down to zero percent interest, the bidder will not earn the minimum 5%.

Tax Lien Sales: To find information on tax lien sales, you will need to contact the Tax Collector's Office.

Redemption Period: 2 years.

Minimum Bid: The amount of taxes, fees and penalties owed.

Subsequent Taxes: During the period between the tax sale date and the expiration of the redemption period and prior to the issuance of a deed, the certificate holder may pay all taxes, assessments, penalties and costs due for the property. Immediately upon paying for any of these additional costs, the certificate holder should report the payments to the Tax Collector's Office with the receipts to record them. The certificate holder can be reimbursed for those taxes.

Over-the-Counter Tax Lien Sales: Certificates not sold at the tax lien sale are “struck off” to the county. After the tax sale is closed and balanced, these county-held certificates can be purchased in the Tax Collector’s Office. Certificates may be purchased by mail or in person, on a first-come, first-serve basis, at the maximum interest rate of 18 percent. The best time to purchase is in early to mid June, right after the sales.

Tax Deed Sales: If the tax certificate is not redeemed, the certificate holder cannot institute foreclosure and receive the deed; rather, a public deed sale must occur. The tax deed is sold to the highest bidder. If the tax lien holder is not the highest bidder at the tax deed sale, he/she will receive their investment back with interest.

Tax deed sales are handled by the Clerk of Circuit Court in most counties. Application for a tax deed sale is made at the Tax Collector’s Office. There is no extended right of redemption following the tax deed sale. Tax deed sales are held throughout the year. Some counties hold tax deed sales every week. Homestead properties are sold for a minimum bid of one half of their assessed value. 

Over-the-Counter Tax Deed Sales: A property that does not sell at the tax deed sale is placed on the "List of Lands Available for Taxes." After 90 days from the sale date, anyone can purchase property off the "List of Lands Available for Taxes." These sales are handled by the Clerk of Circuit Court in most counties.

Other Restrictions: Florida also has some restrictions regarding the number of lots an individual investor can own without being registered as a developer. An individual who is not a developer is allowed to buy a tax deed for only one lot in a planned subdivision for the purpose of resale (section 498.025[1a], Florida Statutes). A seller of lots in property subdivided or proposed to be subdivided into 50 lots or more is required to be registered with the Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums, and Mobile Homes. Also, if a certificate holder purchases 5 certificates in subdivision that contains 25 or more lots, and eventually obtains 5 tax deeds, he would be subject to the provisions of section 498.022, Florida Statutes, regarding standards for transacting land sales. Therefore, it is recommended that when purchasing certificates on lots or parcels in a subdivision, the Department of Business and Professional Regulation, Division of Florida Land Sales, Condominiums, and Mobile Homes be contacted at (850) 488-1631.

A listing of Florida tax collectors by county is available on the Florida Tax Collectors website:

Internet Auctions: Real Auction operates Internet auctions for over 25 counties in Florida.

Real Auction and the Lee County, FL
Tax Lien Certificate Sale

Step 1: Visit the Real Auction Website

Sign up with Real Auction and obtain a username and password:

Real Auction website   

Click on the link for "County Tax Certificate Auctions" in the left-hand column of the webpage.

You have the following counties to select from:

Alachua County  - - OPENS 5/13/2010

Brevard County  - - OPENS 5/13/2010

Columbia County  - - OPENS 5/6/2010

Duval County - - OPENS 5/11/2010

Escambia County - - OPENS 5/6/2010

Flagler County - - OPENS 5/5/2010

Gadsden County - - OPENS 5/13/2010

Gilchrist County - - OPENS 5/12/2010

Hendry County - - OPENS 5/13/2010

Hernando County - - OPENS 5/14/2010

Hillsborough County - - OPENS 5/10/2010

Indian River County - - OPENS 5/4/2010

Lee County - - OPENS 5/3/2010

Levy County - - OPENS 5/13/2010

Nassau County - - OPENS 5/5/2010

Orange County - - OPENS 5/17/2010

Palm Beach County - - OPENS 5/6/2010

Polk County - - OPENS 5/7/2010

Putnam County - - OPENS 5/1/2010

Santa Rosa County - - OPENS 5/10/2010

Sarasota County - - OPENS 5/7/2010

Seminole County - - OPENS 5/2/2010

Sumter County - - OPENS 5/7/2010

Suwannee County - - OPENS 5/11/2010

Taylor County - - OPENS 5/7/2010

Walton County - - OPENS 5/14/2010

Step 2: Select a County and Sign Up

Lee County, Florida is the home to Ft. Myers - a retirement destination known for its warm gulf breezes, manatee habitat, and winter home to famous personalities such as Thomas Edison and Firestone. I have been traveling to Ft. Myers for nearly 20 years. In the last two years, it has temporarily worn the number two dubious honor of foreclosure capital of the U.S., losing only to Las Vegas.

Lee County

To start, click on the "Start Here" link and read through the rules.

To sign up, go to the "Register" link on the right and click. You will be asked to sign up for an account either using your name and social security number or company name and Employer Identification Number (EIN). Note, you will have to sign up for each sale separately. In February, Real Auction hosted the Yavapai County, Arizona sale and later I tried to sign up for the Coconino County, Arizona sale with the same username and password. Real Auction instructed me to create another username and password.

Real Auction provides an excellent summary for training purposes called "Site Guided Tour." On the left-hand side under training, click on the link.

If your wish to look at the liens for sale, you can preview the liens by clicking on the link on the right hand side. However, you cannot purchase a tax lien until you have registered.

Step 3: Rules of the Sale

Please review the rules of the sale, such as payment terms. The rules of the sale are presented on the auction website. You are required to make a 10% deposit. For example, if you anticipate spending $10,000, then you will need to deposit $1,000 through automated debiting or the ACH system.

Please note that if you exceed the amount you've been approved for, your remaining bids will not be accepted. Also, if you fail to pay for your liens, your 10% bid will be forfeited.

Lee List Batch

Screening concepts to remember:
  • Type of property - residential, commercial, land, agriculture
  • Location
  • Price or minimum bid
  • Name of lien holder
  • Improvements vs. land only
  • Number of years of taxes due
  • Other issues flagged, such as environmental concerns.
To screen using the Real Auction system, click on the "Quick Search" button and use the search criteria, such as land use codes, greater than or less than an assessed value, etc.

Land Use Codes

  0           VACANT
  100        SINGLE FAMILY
  200        MOBILE HOME
  300        MULTI-FAMILY 10+ UNITS
  400        CONDOMINIUM
  500        COOPERATIVES
  700        MISCELLANEOUS
  800        MULTI-FAMILY <10 UNITS
  900        TIME SHARE
  1100        STORES, 1 STORY
  1200        MIXED USE
  1400        SUPERMARKET
  2000        AIRPORT/BUS TERMS
  2100        RESTAURANTS/CAFE
  2200        DRIVE-IN REST
  2300        FINANCIAL INST
  2600        SERVICE STATIONS
  2700        VEHICLE SL/SERV/RENT
  2800        PARK LOTS, M/H PARKS
  3300        NIGHTCLUBS/BARS
  3600        CAMPS
  3700        RACE TRACKS
  3800        GOLF COURSES
  3900        HOTELS AND MOTELS
  4300        LUMBER YARDS
  4400        PACKING PLANTS
  4600        OTHER FOOD PROC
  4900        OPEN STORAGE
  5000        PASTURE + HIGHWAY
  5100        PASTURE + MUCK/TILL
  5200        PASTURE + WATERFRONT
  5300        MUCK/TILLABLE
  5400        TIMBERLAND
  5500        PASTUER + TIMBER
  5600        MUCK + WATERFRONT
  5700        MUCK + HIWAY
  5800        PASTURE + AC + PONDS
  5900        BEES
  6000        GRAZING LAND
  6100        GROVE + MUCK
  6200        GROVE + WATERFRONT
  6300        PASTURE
  6400        GROVE + HIGHWAY/WATER
  6500        GROVE + PASTURE + ACERAGE
  6600        GROVES
  6700        GROVE-PAST + TILL
  6800        DAIRIES/FEED LOTS
  6900        ORNAMENTALS/MISC
  7100        CHURCHES
  7200        PRIVATE SCHOOLS
  7400        HOMES FOR THE AGED
  7500        NON-PROFIT SERVICE
  7700        CLUBS/LODGES HALLS
  7800        REST HOMES
  7900        CULTURAL GROUPS
  8000        NOT USED
  8100        MILITARY
  8300        PUBLIC SCHOOLS
  8400        COLLEGES
  8500        HOSPITALS
  8600        COUNTY
  8700        STATE
  8800        FEDERAL
  8900        MUNICIPAL
  9100        UTILITIES
  9200        MINING
  9300        SUB-SURFACE RIGHTS
  9400        RIGHTS-OF-WAY
  9500        RIVERS AND LAKES
  9600        WASTELAND/DUMPS
  9900        NON-AG ACREAGE

If you would like to easily screen for the cheapest or most expensive liens in a batch, use the Face Amount arrows and the list will be resorted.

Example Sorts

1. All liens greater than $1000 in value that are either houses or mobile homes, homestead only and less than two years of unpaid taxes. The purpose of this screen is to find liens that are likely to be redeemed as these are properties where the homeowner lives. Again, please recall that you can only have one homestead property in Florida.

Lee screening example 1

Partial results of first screen:

Lee screen example 1 part 2

Here are some other screens to consider:

1. Commercial properties only with a value of more than $200,000.
2. Agriculture land with acreage of more than 5 acres.
3. Multifamily homes, condos or apartment buildings.

Important! Due diligence is done after you have screened your list down to a manageable level.

First, let's look at the results of our list. One thing to note is the asterisk on line two of the above image. If you click on this symbol you will see that an existing tax lien is on the property. 

HX - This means a homestead property or the property owner's primary residence.

Property ID - This will take you to the property appraiser information, including pictures. This property is located in Cape Coral, which is a nice location. The house looks well maintained.

property appraiser info

ADV number - This will show you the current number of bidders and more property information, as well as open taxes owed (see below).

Lee screen 3

What about IRS liens or other problems?

Visit the county recorder's office or clerk's office and look for recorded documents. Mortgages, deeds, liens, etc. have to be recorded. To find the recorded documents for Lee County, visit the link provided on the main website.

This type of search is done through what is called the "Grantor/Grantee" index. When you search this index, you need to search by property owner name and if more than one owner is listed, search all owners' names. 

What about environmental problems?

A great resource for searching for major environmental concerns (e.g., hazardous waste sites), is located at This site allows you to search for Superfund sites, hazardous waste sites, petroleum or gas stations, toxic or hazardous handlers, etc.

Florida's State environmental agency is known as the Florida Department of Environmental Protection. Its website is at

Some important things to know about Florida. Much of the state is underlain by a limestone aquifer, which has partially dissolved in places resulting in caves, caverns, and solution or sink holes. Occasionally, you will hear of a house or street that has been engulfed by a sink hole. While traveling in Florida, I have even seen billboards for attorneys representing sink hole victims. This same aquifer is extremely shallow and has been contaminated in a number of places. A common problem is overuse of pesticides and herbicides.

Florida has a number of sensitive or protected species, such as mangroves and manatees.

What about flooding?

One of the amazing things about Florida is that a great deal of the State is a flood zone. It is literally only a few feet above sea level, so storm surges and intense rainfall can cause flooding. On the other hand, the soil is very permeable and rainwater quickly dissipates.

Again, visit your favorite search engine, type in "FEMA Map Store" and go to

For Lee County flood zones, visit this link:

What about bankruptcy?
Bankruptcies are often recorded with the county government; however, bankruptcy is a federal process so it is best to check with the federal district court. There are three U.S. bankruptcy courts in Florida:
Florida Middle District Court:
Court Locations: Fort Meyers, Orlando, Jacksonville, Tampa
Counties of Jurisdiction: Baker, Bradford, Brevard, Charlotte, Citrus, Clay, Collier, Columbia, De Soto, Duval, Flagler, Glades, Hamilton, Hardee, Hendry, Hernando, Hillsborough, Lake, Lee, Manatee, Marion, Nassau, Osceola, Orange, Pasco, Pinellas, Polk, Putnam, Sarasota, Seminole, St. John’s, Sumter, Suwannee, Union, Volusia
Florida Northern District Court::
Court Locations: Gainesville, Panama City, Pensacola, Tallahassee
Counties of Jurisdiction: Alachua, Bay, Calhoun, Dixie, Escambia, Franklin, Gadsden, Gilchrist, Gulf, Holmes, Jackson, Jefferson, Lafayette, Leon, Levy, Liberty, Madison, Okaloosa, Santa Rosa, Taylor, Wakulla, Walton, Washington
Florida Southern District Court:
Court Locations: Ft. Lauderdale, Miami, West Palm Beach
Counties of Jurisdiction: Broward, Dade, Highlands, Indian River, Martin, Monroe, Okeechobee, Palm Beach County, St. LuciePalm Beach County, St. Lucie
Step 7: Purchase

When you are ready to place a bid, you will first have to have money in your account. Place your bids realizing that the system uses proxy bidding. This means you can decide how low you are willing to go in terms of interest and the system will bid on your behalf to the highest winning bid amount in 1/4% increments. For example, if you bid 1/4% and the next lowest bid is 14%, you would win the bid at 13 3/4% interest. If you tie, the system will randomly select a winner.
Step 8: Manage Your Liens or Deeds

You will be notified by email of your winning bids and any amount you should be refunded or the amount due. Remember that you have two years. After year one, you have the option to pay for subsequent taxes and receive the same interest. If, after two years, your lien has not been redeemed, you will apply to the county to take the lien to the tax deed sale. Florida is unlike any other state because the tax lien investor does not have the first right to foreclose. At the tax deed sale, if no one bids on the lien, then the tax lien investor can foreclose and take ownership; otherwise, another investor may outbid the tax lien investor and he/she will have to pay the amount of the lien plus fees that the tax lien investor incurred to take it to the sale. 

Tax deed sales are held based upon the number of applications in a particular county.

Once again, it pays to be organized both electronically and with your paperwork. I use Excel and a folder system my accountant developed called the Tax Box.

All the best,


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