How to Find Tax Delinquent Properties for Free
In this video I'm going to cover what are tax liens and how to locate them for your own county.
Ariel Herrera 0:00
Are you looking to find motivated sellers in real estate? Well, one of the best ways to find motivated sellers is by looking at tax liens. It's not only a great investment strategy, but it's also a great dataset, whether you're a real estate agent, wholesaler or investor to target property owners that are motivated to sell. In this video I'm going to cover what are tax liens and how to locate them for your own county. My name is Ariel Herrera with the analytics area channel where we bridge the gap between real estate and technology. I'm a data scientist have a passion in real estate and I love being able to bring data driven solutions. And this video is going to cover at a high level how you can actually obtain property owners for tax liens and the second video we're going to be covering how to actually get this data automatically using web scraping have absolutely no code to make sure you get the latest content please subscribe to this channel as well. If you want to see more creative ways to find motivated sellers then please like this video so I know to make more content like it. Alright, let's get started. You may be thinking what is a property tax lien? A tax lien is a claim the government makes on our property when the owner fails to pay the property taxes. So for example, when a landlord or a homeowner fails to pay the taxes on their property, the city or county in which the property is located has the authority to place a lien on the property. When there's a lien that's unpaid. The property cannot be sold or refinanced until the lien is removed. Well, how common are these property tax liens? In 2021, CoreLogic did a study and they found 6.3% of taxpayers were actually delinquent in their property taxes. The states with the highest number of delinquencies for taxes were Mississippi, Delaware, Virginia, while the lowest delinquencies were North Dakota, Minnesota and Wisconsin. With that said, the National Tax Lien Association estimated the US generates roughly 21 billion of delinquent property taxes each year. This shows there is a large pool of taxpayers that can be delinquent, the numbers were trending downwards. And I think that was a factor towards having stimulus money and people being able to pay off their liens. However, I do expect if we go into a recession at this number can likely climb up so how do you actually profit from a lien? Well, as an investor, you could go to the auction of where tax liens are being held for a county. And if you purchase a tax lien, and a property owner pays you back, then you do make between 10 to 12%, on that return, and remember, the stock market makes about six to 7% on your investment each year. So you always want to be above that, in the case that the property owner does not pay back the lien, the property can go under foreclosure, which gives the opportunity for the person who was holding a tax lien to purchase the property at a discount. So where can investors purchase tax liens, ultimately, it's going to the county tax collector, where you can bid for these tax liens online through auction. When counties list auctions on their websites, they will also provide information about the properties up for auction, where they go to auction and the minimum bid. This can help an investor to identify if there are any properties they are interested in based on location, property types of say residential commercial size and minimum bid. Now what is one of the major benefits of looking at tax liens aside from getting a return on your investment was to find motivated sellers. The concept of motivated sellers is to find people who are currently in a hardship, whether that's through divorce being behind in payments or recent death, we can help these property owners by solving their problem and also obtaining their property to help pay for any liens that may be outstanding. It's a win win on both sides. So for example, say if you're a real estate agent, and you're finding a difficult time of locating people want to sell their properties. The best way to find these potential sellers are people who need to sell now not that they're thinking about it in the future, or they just want to throw up their house in the market to see what price they could get but likely won't actually act on anything. No, you want to find people who are motivated. So by being a real estate agent and obtaining a list of all the property owners who are behind on their taxes, you can reach out to them directly possibly help with paying off their tax lien in some way and then sell their property for them. This is also useful for wholesalers as well as investors.
So let's now dive into how we actually find tax liens using this sample city of Jacksonville, Florida for this next segment, I'm going to actually be searching tax deeds not tax liens since tax deeds is specific to Florida. So please be aware of which one is specific for your own state to in my Google search, I searched Jacksonville Florida tax deed auction. Depending on your county, the combination of words may be a bit different, you may want to search county tax collector. But in this case, the first link works. So once I go here, I'm able to get routed Duvall County, which is the county that Jacksonville the city resides in. And here I could look at tax deed file search sales before May 2021. And sales after which we're going to look at after when they had their new system. Here we see different tabs. So we could see the sale date of different tax certificates, as well as tax collector number applicant owner status lands available and surplus funds. So if we do just a search on the dates that are already preset, we can see all tax liens that are expected to be held for auction, October of 2022. We have information on certificate number, parcel ID the opening bid, whether it's for sale or not, as well as the original owners. So if we click into here, so the first owner, we could see the property owners name different derivations of their name, what the property address that they currently reside in. And the strategy here would be to reach out to this property owner whether it's sending the mailers to their property address, or by finding their contact info on sites like fast people search so that we can reach out to them via phone and say, Hey, I see publicly that you're behind your tax liens. What's going on? How can I help? Let's work through a solution. Aside from the case details, you could also look at the documents as well, you could look at the documents to confirm any legal descriptions. And to see the notice for the tax lien. This can help to identify there's any other potential invoices that you may need to be aware of before you actually purchase this tax lien. Now say we want to actually purchase the tax lien. How do we do so? Well, when I search Jacksonville county tax collector, and I go to the first link, it states here the information for taxes and I'm going to go to property taxes. Then on the left hand side we could see tax sale we're looking for some sort of sale. And here it says all tax sales are held on lien hub for Duvall county here we can create our own profile. So we could save tax liens of interest and ones that we currently own. Then we could go over to bid on tax liens. We could look at the auction schedule, we can see when the next tax lien is going to be held and previous dates. And if we go over to purchase county held liens, we can also look at these liens here and filter on them. We could even download them as well. So you may be thinking awesome, great, I could just download, save for 2021. Download each of these and then automatically get the property owners. But the issue is here. This is for Seoul tax lien. So in order for us to get active tax liens that we can still purchase, we need to take them from this site, which from what we see there's several pages of data. And we're not able to actually download this to a CSV file. Which is why in the next video meet me there because we're going to use browse API, which is a no code solution to quickly set up our process so that we can web scrape this information and build our list of motivated sellers or have tax liens that we're interested to purchase. Please let me know in the comments if you want to see more ways of finding motivated sellers and walkthroughs of how to go through county websites to do so. And if you haven't already, please subscribe. Thanks