I got one of those 50% MI certificates a few years ago. Nice stuff if you can get it.
Unfortunately, you can’t do that in MI any more. They changed their tax law a couple of years ago. Now, the have public bid auctions. Actually, I think it is a transition period whereby some counties can still do the old way and some the new way.
I recommend that investors read the tax sale law and then contact the counties and find out how it actually works this year.
I was reading up on the upcoming tax sales but know nothing about them. I have looked into some courses, but am a little confused on the certificate vs. the deed. Michigan has a 6 month right of redemption and according to the state website, I will only obtain the actual deed to the property 1 year AFTER the sale. What good does it do if you buy the property and have to wait 1 year before flipping it or doing improvements for rental situation? Am I missing something? It sounds like a good deal (pennies on the dollar definately sounds good when I am buying), but am unsure on how to proceed. Any advice is greatly appreciated.
If you want exposure to tax lien returns, you may consider investing in a “mutual fund” of sorts that specializes in this area, such as that offered by Optimum Realty at www.taxlien.com
Please read my post to Wayne–¶'s post to your question.
Buying properties for long-term holding makes sense with the situation you describe. Quick flip may not.
Every bargain-buying approach has positive and negative characteristics. You have to figure out what is more important to you, lower price or quicker resale. I have often held tax sale purchases more than a year so I could sell and get title insurance for the buyer here in CA.
You may want to explore other investment approaches. Find something that suits you. IF you have not already done so, I recommend you read my post which can be found by searching the archives here on the main bulletinboard of CREONLINE.COM with the term “beginners success.”
Erin,
You will only get a deed 1 year after if the property owner does not exercise their right to redeem. If within the first year they do exercise their right to redeem they will have to pay you, the holder of the tax lien certificate,the amount of the bid plus 1 1/4% per month or 15% per year. After the 1 year period is up you can choose to trade in your certificate for a tax deed. If you choose after 1 year not to trade in for the tax deed, and the property owner chooses to redeem they have to pay you…through the nose. To be specific: The purchase price of the tax lien certificate, plus the $5.00 you paid the sheriff for personal service for notice of the tax deed, plus 50% interest. You also have until 5 years time to forclose.
This information I got from a book called “The 16% Solution” by Joel S. Moskowitz. If you don’t have the book already you can get it at Barnes and Nobles’ or a library for free. There is also a lot of other information in the book that I’m sure would prove useful. If I’m correct, you have until May to do lots of research. I hope you do great on your endeavour.