TaxSaleLists.com Blog

Types of Notices

Depending on the jurisdiction you may be required to give several different notices during the time frame that you hold the lien. All of these notices are paving the way for you to get the property if the taxpayer does not redeem the lien.

The types of notices that are often required (sometimes more than one) are:

1. Notice of expiration of the redemption period
2. Notice that a petition will be filed to foreclose the right of redemption
3. Notice that a petition has been filed to foreclose the right of redemption
4. Notice of foreclosure of the right of redemption
5. Notice to appear for the court hearing
6. Notice of an application for a tax deed, and so on

Each state will have their own requirements and we will cover them in the state books, but right now you need to understand that it is your responsibility to file these notices and that failure to do so will, more than likely, cost you 100% of your investment.

Responding to Notices

During the period of time that you hold the lien you will be a party of interest yourself. This means that you will, more than likely, receive some notices yourself.

These can be any of a number of things:

1. Demolition notices
2. Notices to clear weeds
3. Nuisance notices
4. Bankruptcy notices
5. Infinite listing of other notices

NEVER IGNORE THEM

Call the jurisdiction and ask what you are required to do. They may tell you that you have nothing to do, and in the case of a number of them you don't have to do anything, but when you hang up with the taxing jurisdiction, call your attorney and ask him. It is better to be sure than risk your investment. Some of the notices you have to reply to, bankruptcy being one. If you get a bankruptcy notice you must file a claim with the bankruptcy court.

Next Post: Subsequent Taxes

Servicing the Purchase

Ok, so what does servicing mean?

Servicing is the term that includes all the administrative tasks that must be completed to successfully hold a tax lien portfolio through the redemption period, and if necessary, perfect your interest in the property if there is no redemption.

These tasks are as important as any other task you must perform when buying tax liens. You can do wonderful due diligence, be a master at bidding, and lose 100% of your investment if you are not aware of the servicing necessities of the portfolio.

There are a number of tasks that should be done, which we cover one by one:

Task 1: Create a Timeline

• When you return from the sale create a time schedule of when certain tasks must be performed.
• If you have obtained counsel they should be able to give you a list of all the tasks that need to be completed and when they need to be completed.
• If you haven’t retained counsel then you will need to make sure you understand the statue and have ALL the requirements noted and listed.

Task 2: Contact the Jurisdiction

• We advise that you contact the taxing jurisdiction once a week to check on redemptions.
• Find out who the individual who handles redemptions and ask them what their procedure is. Some jurisdictions will not notify you, others will. It is my suggestion that you check with the taxing jurisdiction no less than twice a month. The delay of two weeks can affect your return on investment substantially.
• At the time of your first contact with the jurisdiction about redemption procedures, make sure you get the names and addresses, with phone numbers, all staff members that you will need to talk with over the next few months about your lien.
• Add these names, addresses, and numbers to your worksheet for the jurisdiction.

Next Post: Redemptions and Notices

Reviewing your acquisitions

Before you leave the area I think it is a good idea to drive by each parcel you purchased a line on and to talk another photograph of the property for your records. First thing you want to do is check these photos again your due diligence photos of the property. I have had at least two instances where the property has been a victim of arson between the due diligence and the day after the sale.

Depending on the jurisdiction this will give you an opportunity for “a sale in error”. You probably won’t get out the sale, but you might.

Make sure you know what you purchased and make sure you have a photo of what you purchased – there are going to be a number of times before the redemption period expires either you are going to need to look at that photo.

Next Post: Financing your acquisition

Metes and Bounds Property Descriptions

Metes and Bounds is a commonly used method of boundary surveying. Land titles, which are transferred by written documents called deeds, often include a metes (to measure, or assign by measure) and bounds (boundary lines or property limits) property description. Definition of metes and bounds http://bit.ly/3ZE5fy.

The descriptions have a point of beginning (POB), such as a stake, fence post, road intersection, or a natural feature such as a tree. The length and bearing of consecutive lines from the POB are given. Values that were historically represented in chains, poles and rods are now in terms of feet and decimals, and even metric units.

A precedence has been set in order to take a written description and find its location and physical appearance on the earth. In other words, it defines an order when re-establishing an old survey using a metes and bounds description. The following list indicates the order in which distances, directions or words are weighted when conducting the survey (in order to avoid conflict):

• Marks or monuments (almost anything can be called for as a monument in place)
• Calls for boundaries of adjoining tracts
• Courses and distances shown in the original notes or plat

If numbers are both spelled out and given as figures, words take priority unless other proof is available. The assumption is that it is more likely that someone would incorrectly transpose digits rather than misspell numbers.

The next post will be on the description of land deeds and the information they should contain.

Section, Township and Range System

For an excellent tutorial on PLSS descriptions using the section, township and range system, visit the Wisconsin DNR http://www.dnr.state.wi.us/.

The system of Section, Township and Range can be described by the rules of survey from the 1973 Manual of Surveying Instruction. You can review the full manual here: http://bit.ly/3clLxu.

The public lands shall be divided by north and south lines run according to the true meridian, and by others crossing them at right angles, so as to form townships six miles square.

The corners of the townships must be marked with progressive numbers from the beginning; each distance of a mile between such corners much be also distinctly marked with marks different from those of the corners.

The township shall be subdivided into sections, containing as nearly as may be, six hundred and forty acres each, by running parallel lines through the same from east to west and from south to north at the distance of one mile from each other (originally at the end of every two miles, but amended in 1800), and marking corners at the distance of each half mile. The sections shall be numbered, respectively, beginning with the number one in the northeast section, and proceeding west and east alternately through the township with progressive numbers until the thirty-six be completed.

Ranking Scale for Properties to View

Rank the neighborhood

As you get close to the property start noting the area and rank it. This is subjective ranking but you want to look for boarded up houses, burned out houses, dirty streets, yards that are not maintained, houses that are not maintained. These are going to be your value so you determine what is important, but you want a neighborhood ranking.

Rank the structure

When you get to the property, rank the structure if there is one! Same 1 to 5 ranking, based on condition not esthetics.

Note any problems

Sagging porches, a blue tarp on the roof that is not a decorative item, run down, unoccupied, (big warning sign). Write these things down in your log.

Note any plus items

Well maintained, new paint etc.

Number your photos

Write down the photo number and some things you see in the picture so you have a secondary check in case the numbers get screwed up.  Example: White house, brown trim, large tree left side, blue car.

When you get home you will want to “marry” your photos to your list. You can even paste the photos into your spreadsheet; make sure that you put the correct photo with the correct property!

Look at the property

We believe that it is critical that you look at each property you are considering. This is an absolute in a deed sale and we feel it is an absolute in a lien sale also. The nicest property on paper and pictures could be a burned out crack house in reality. People will tell you that 95% of tax liens redeem, what they don’t tell you are that about ½ of those that don’t redeem are never taken to deed. The reason they aren’t taken to deed is that they shouldn’t have been bought in the first place.

Mapping the property. We advise you get a mapping program so you can map the properties before you go out to inspect them. You can get good mapping software for under $100.00 and it will save you hours in the field. The one thing to remember when mapping is that you will sometimes find the same address exists in two different places in the taxing jurisdiction. You can resolve these by calling the assessor’s office or checking by zip code or parcel number so you make sure you are looking at the correct property.

We suggest you map everything before you get in the car. Take time before hand to study your maps so you have a feel about how you are going to do the job. This will save you a lot of wasted time. We have had over 200 field workers do property inspections for us and I can tell you those who took an hour or so to layout their plan were much more effective than those who didn’t.

How many can you look at in a day? You need some idea so you know how much time to allow. My best people consistently did more than 120 a day. The record was 335 in one day. Since you are new to it, plan on 50 to 70 a day. If you can get someone to ride with you, you can increase that number by 20 percent.

Get a digital camera if you do not have one. You don’t need an expensive one and they will pay for themselves in about three sales. You want pictures because you are not going to remember the properties if there are more then about 10.

What are you looking for? We use an inspection form that was adopted by a number of the institutional buyers. It had several things you will want to note. Use a scale from 1 to 5 ranking scale, 1 being worst and 5 being the best.

See next post for rankings