Buying Tax Lien Property?

Even better to live in Hawaii tho huh?

 

Yes, I will have a title search done before bidding, as I am concerned about hidden liens. I know that in Ca if you are behind on child support they will put a lien on all real property as well.

 

Those probably get wiped clean in the foreclosure process but some (like IRS or Prop Tax liens) survive so good call on the title search. Go a step further and buy the title insurance too if you pull the trigger

 

Here is a snippet from the tax assesors office:

Do liens or encumbrances on a tax-defaulted property transfer to the new owner after purchase of the property at a tax sale?
A title search initiated at the purchaser’s expense should reveal any liens or encumbrances of record on a property in the tax sale. Per Revenue and Taxation Code Section 3712:
“The deed conveys title to the purchaser free of all encumbrances of any kind existing before the sale, except:

a. Any lien for installments of taxes and special assessments, which installments will become payable upon the secured roll after the time of the sale.1
b. The lien for taxes or assessments or other rights of any taxing agency, which does not consent, to the sale under this chapter.
c. Liens for special assessments levied upon the property conveyed which were, at the time of the sale under this chapter, not included in the amount necessary to redeem the tax-defaulted property, and, where a taxing agency which collects its own taxes has consented to the sale under this chapter, not included in the amount required to redeem from sale to the taxing agency.2
d. Easements, constituting servitude upon or burdens to the property, water rights, the record title to which is held separately from the title to the property, and restrictions of record.
e. Unaccepted, recorded, irrevocable offers of dedication of the property to the public or a public entity for a public purpose, and recorded options of any taxing agency to purchase the property or any interest therein for a public purpose.
f. Unpaid assessments under the Improvement Bond Act of 1915 (Division 10 (commencing with Section 8500) of the Streets and Highways Code), which are not, satisfied as a result of the sale proceeds being applied pursuant to Chapter 1.3 (commencing with Section 4671) of Part 8.
g. Any federal Internal Revenue Service liens which, pursuant to provisions of federal law, are not discharged by the sale, even though the Tax Collector has provided proper notice to the Internal Revenue Service before that date.3
h. Unpaid special taxes under the Mello-Roos Community Facilities Act of 1982 (Chapter 2.5 (commencing with Section 53311) of Part 1 of Division 2 of Title 5 of the Government Code) that are not satisfied as a result of the sale proceeds being applied pursuant to Chapter 1.3 (commencing with Section 4671) of Part 8.”


And then:
18. How soon can I take possession of a property after purchase at the tax sale?
The successful bidder may generally take possession of a property immediately after making payment in full and the tax deed to the purchaser has been recorded. Tax deeds are recorded within two weeks after payment.
19. What steps should I take if there are occupants living on the property or personal property left on the premises?
This is a civil matter that could involve eviction proceedings or a disposition of personal belongings. You may wish to seek private legal advice for more information.
20. Is property purchased in a tax sale eligible for title insurance?
The former owner has one year from the date of recording of the tax deed to challenge the validity of the tax sale (Revenue and Taxation code 177, 3725 and 3726). During this one-year challenge period, it may not be possible to obtain a clear title from a title company. Occasionally, a quiet title action is necessary if there has been an irregularity in the title prior to the tax sale. In the event that the former owner is successful at overturning the sale, the sale price would be returned to the purchaser, but any improvements made to the property would not be reimbursed to the person that made them.

 

Not really. Trying to move to Damascus, Oregon. Besides the beach and food Hawaii is really boring. Been here most of my life time to move on, and give my daughter better opportunities.

 

Thats a good story. It would be nice to have a shop that has its own driveway. And having all utilities already on the lot would make it cheaper than buying bare ground.

 

Don't give her a surfboard then before you move.

I would love to live in HI

 

We will still be coming back to visit a few times a year. We have a good amount of family and too many friends not to

 

Is it possible to merge lots? People split them all the time...

 

I assume so, I will ask the Planning Dept next time I am in there.

 

Wow, totally different from Ohio.
Here we have a open auction on the courthouse steps. Rain is your friend.
Bank foreclosures are for 2/3 appraisal minimum, tax sales are best price no minimum.
Liens follow sale, except taxes, so often a property with a lien will not sell. After two no sells a propert will be auctioned with no minimum.

 

Was a commercial loan officer for a few decades. In Iowa, tax sale takes priority over a perfected RE mortgage, so property transfers to tax sale buyer unencumbered by mortgage. Previous owner had 12 months to redeem sale from buyer (many horror stories of folks improving the real estate, only to have the owner come in at the last minute and redeem - much legal disagreement whether costs of improvements can be included in redemption price). Lender had no redemption rights.

Make damned sure you know your jurisdiction's rules on redemption (as in - spend $500 and get a written attorney's opinion) before you do anything. You're going to have hours and hours and hours in cleanup/disposal costs alone. Last thing anyone needs is to be winning bidder, only to have the previous owner redeem the sale after you've spent some time/money.

 

At any rate, it has seriously degraded your property value also. I would find a way to buy it and clean it up. Chances are good it will only require surface cleanup. You would get a bonus, raising both property values, and putting yourself in the unique position of owning an adjoining desirable building lot... very valuable to a prospective buyer as a buffer, should you decide to sell your house and the lot at the same time. Or maybe start a bidding frenzy? Who knows. No mater how you look at it, it's an opportunity waiting to happen.

 

I work in the state environmental compliance field. If Cali's regs are similar, you would be liable for cleanup of the property. I always encourage people who have the tools to do it themselves as it saves a ton of money for the property owner. Make sure you take the junk to the proper recyclers/landfills and save the tipping receipts. As far as the dumped vehicle fluids, you can't really compare residential dumping to the old gas station mentioned previously. There's a big difference between a few quarts of oil here and there versus a 40+ yr old decaying 10,000 gallon underground storage tank (or two, or three). You should be able to excavate the contaminated soil fairly easily and dispose of it properly (again, save receipts). They may require exit samples once you're done, depending on how concerned the state is about it. If they don't know alread

Be careful about documenting everything. If the state doesn't already know, that's good, but they may find out because jaded former employees and property owners can be vindictive and chances are good that he may report it to the Feds or state. Feds will kick it down to the state most likely.

If you do have any questions or want any advice regarding the environmental aspect of things, please feel free to PM me. Good luck, and FWIW, I think it's great that you want to do the right thing buying this property and cleaning it up.

Edit:. Great advice from @06Tacooo

 

Do it. Buy it. If you're willing to put in the work you'll raise the property values of the entire neighborhood. Including your own new double lot. These eye sores can kill property values man. I bet the equity alone generated from the cleanup will offset the cost you put into it.