Follow us as we go through an abbreviated version of a deal break down, and learn what we profited on this property to the penny.
Transcript:
Hey, everybody! Casey Denman here with TaxSaleAcademy. In today’s video, we’ve got a quick deal breakdown for you for a tax sale investment that I’ve made. So, let’s get to it.
Let’s go over a few details. The property is located in the state of Florida. Now the state of Florida is a tax lien and a tax deed hybrid state. They actually hold a tax lien auction and they also hold tax deed auctions. Now if you follow me for any time, you know that I don’t participate in tax lien auctions for a variety of reasons. I do however purchase and invest in properties from tax deed auctions, which is exactly what this deal breakdown is about.
When it comes to our market research, we actually had prior investments in this area and in this particular subdivision, so we knew quite a bit when it came to property values. When it comes to the due diligence, we actually personally perform the necessary due diligence for this property. When it comes to a lot of our properties, especially the ones that are out of state, we have other people that perform the due diligence on our behalf. But for this particular piece of property, we decided to do it ourselves.
This was an in person only auction. Some auctions are online only, some are in person only, and some are a hybrid between the two.
So, let’s take a look at the piece of property. And here it is. It doesn’t look like a whole lot of anything special, to be honest with you. It’s just a vacant lot that is buildable and there is development going on in the immediate area. And here’s another picture of the road that it’s on.
So, let’s talk a little bit more about the auction, the competition in general. There was actually little competition all auction and we were able to purchase a number of properties that we were interested in. And when it comes to this specific property, surprisingly, we were the only bidder, and we actually walked away owning it for the minimum bid.
After the auction, we decided to list it with a realtor who specialized in this subdivision. Since it would be sold with title insurance, a suit to quiet title was performed and we actually hired a semi-retired attorney to do this for us. All he does is suit to quiet titles for tax deed properties. He’s a tax deed investor himself and that’s basically what he does in his retirement.
After we took care of the title and we got everything cleared up, we listed it shortly thereafter. Now something to note here is that not all properties require a suit to quiet Title. As a matter of fact, the majority of the properties that we sell, we don’t do suit to quiet titles on. But in this particular instance, we did. So we paid $1,416.00 and we sold it shortly after for $29,400.00.
And here’s a screenshot of the property purchase report for all the naysayers and the disbelievers out there. The second from the bottom, you’ll see that says “tax.” That represents the tax deed auction. $1,500 actually rounded up here. Above that, it says “F judgment.” For final judgment of quiet title lawsuit, it has an arbitrary figure of $100.00 here. And then above that, you’ll see it says “warranty” for the warranty deed when we sold it for $29,400.00.
Let’s take a look at the screenshots from the clerk’s website. You’ll see right here it says, “Consideration: $1,416.00.” The grantor or the seller was the Clerk of the Circuit Court, and they sold it to my holding company. On the right hand side, you’ll see when I sold the piece of property, it says “Grantor: my holding company” and I sold it to a couple by the name of Smith, and I sold it for $29,400.00.
So let’s take a look at it now by the numbers. Purchase price: $1,416.00. Recording/Doc stamps: $19.82. The quiet title suit cost me $650.00. Total cost came out at $2085.82. The sales price was $29,400.00. I paid a flat rate commission which I negotiated with this particular realtor for the amount of $2,000.00. The title insurance and closing fees when I sold it was $370.77 which I paid for. Documentary stamps ran me $205.80. Which leaves me with gross proceeds of $26,823.43. So we’ll take that figure and we’ll subtract out our total cost, which leaves us with a net profit of $24,737.61.
So as you can see, that was a pretty successful investment for us. Inside the academy, we have a much more detailed deal breakdown on that specific deal, as well as many others. This basically allows you to copy us on a step-by-step basis to take those profits and put them in your pocket.
To gain access to these much more detailed deal breakdowns, as well as to get your copy of the free Tax Sale Blueprint, go to TaxSaleAcademy.com. Have a great day!