Palm Beach County Tax Deed Sale Online Course

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Course description

When are Palm Beach Tax Deed Sales 

August 9, 2017

September 13, 2017

October 18, 2017

I will post the new dates as the palm beach county tax deed sale calendar is updated

How to Find the Most Profitable Properties at the Palm Beach County Tax Deed Sale with Data Analytics

This course is about my palm beach tax deed sale analysis on buying a palm beach county tax deed property.  There are so many things that I learned about palm beach county auction along the way that I want to share with you.  You can consider this course as a how to buy tax deeds in florida course.  In the beginning I was looking for buying tax deeds in florida in general, however I narrowed down my scope to just palm beach tax deed sale.  First, I wanted to know whether it really was possible to make money buying a palm beach county tax deed property.  So, I went and looked at palm beach county tax deed sales data for six months to see if money can actually be made buying palm beach county tax deed property.  I think it's important to analyze the data before bidding on tax deed sales florida.

My palm beach tax deed sale data analysis excluded any property that did not have an eventual resale.  This means that at the palm beach county assessor’s office there wasn't an eventual sale recorded after the palm beach county tax deed sale.  Buying tax deeds in florida involves a lot of research.  For me I started with the palm beach county clerk and found out about the auctions and then I checked with the assessors and palm beach county property tax payment office to get more information about the property.  Eventually, I contacted the local municipalities within palm beach to get more information.  Buying tax deeds in florida might look easy, but there is a lot upfront research that goes into it before placing the bid.  Tax deed sales florida has a couple of moving parts and I think you would have to be on top of all of it to be successful at learning how to buy tax deeds in florida.  I was really interested in answering some of the questions that I had about buying tax deeds in florida from the data perspective.  The information you will find below captures a lot of data analysis from researching how to buy tax deeds in florida, especially at the palm beach tax deed sale.  I think you can learn about what is a tax deed in florida pretty easily but I think the hard part is learning how to buy tax deeds in florida.

I think the answers from the palm beach tax deed data analytics project might surprise you about buying tax deeds in florida!

5 Things No One Will Tell You About Palm Beach Tax Deed Sale

Free guide shows you 5 things no one will tell you about buying tax deeds in florida

How Does Tax Deed Sale Work in Palm Beach County

One of the requirements to participate in the palm beach auction is to deposit either 5% or $200 whichever is greater.  For buying tax deeds in Florida I believe most other counties also have the same deposit requirements.  The question then for me was how much of the 5% should I put in for buying tax deeds in florida?  If I put in too little then I wouldn’t be able to buy the property during the palm beach tax deed sale and I didn’t want too much of my funds sitting with the palm beach county auction company either.  I wanted to find out what was the right 5% that I should put for buying tax deeds in florida especially at the palm beach county auction.

In order to understand the right 5% that is required to win the palm beach tax deed sale, I needed to analyze how much the winning bidders paid for the property during the palm beach county auction.  Remember, for my analysis I excluded any property that were not eventually re-sold after the palm beach county tax deed sale.

Here is the winning bids analysis for the palm beach county tax deed sales

Interpretation of the graph above from the palm beach tax deed sale

I collected 58 results of properties sold at the palm beach tax deed sale and then eventually resold again by the winning bidder.  The average price paid to buy the auction was $26,760.  The minimum was $4,000 and the maximum was $112,000.  As you can see the maximum is going to come into play when we analyze those properties that actually made money for the investor.  Also, as you can see there is a lot of variation in this palm beach tax deed sales data which means the winning bid is all over the place and we can also see that this data is non-normal or non-parametric.  We can also see that this data is not normal by quickly looking at the mean and the median.  As you can see there is a large difference between the mean of $26,760 and the median winning bid of $14,800.

Here is another way to look at the palm beach tax deed sale data

Looking the winning bids from the tax deed auction palm beach county in another way here’s what we see with a dot plot above.  As you can see there is a cluster in the lower levels of the chart and there are some outliers to the right of the dot plot graph.  So, this gets back to the question of how much should you put as your 5% bid in order to participate in the auction.  This is an important concept if you're interested in learning how to buy tax deeds in florida.  What should that 5% be?  I think based on our data we can see that the maximum winning bid was $112,000.  I think the maximum you probably need to allocate for the 5% is about ($112k *5%) $5,610.  

The next questions I had was how long does it take to sell a property won at the palm beach county tax deed sale?  I think this is also an important question to ask if you're interested in how to buy tax deeds in florida.

When I was first looking at tax deed auction, I was under the impression that I can buy the property at palm beach co tax deed sale and then readily “flip” the property within a few days.  I wanted to test that assumption and I collected data to see how long were the winning bidders from the palm beach county auctions were holding on to these properties before selling them.

How Long Does it Takes to Sell the Property After Winning the Palm Beach Tax Deed Sale

Interpretation of the graph above on how long it takes to sell a property after winning the palm beach county auction

As you can see my assumption about “flipping” was just wrong.  On average most people hold on to the property they won at the palm beach tax deed sale for about 14 months.  The median is about a little over 11 months and some took a little over 45 months to sell.  Even though I have not collected data from other counties this might hold true for buying tax deeds in florida from other florida counties as well.  So much for flipping!

Based on the data we collected so far, can we predict how long it would take to sell a property that was won at the palm beach tax deed sale.  Here is a graph that would show the prediction with a 95% confidence interval.

Interpretation of the interval plot graph above.  

Based on the data we have so far we can predict that we would hold the property between 11 and 17 months before being able to sell it.  This was a rather surprise to me since I thought that I could buy a property at the palm beach tax deed sale and then readily flip it within a week or so.  I was clearly wrong about this and the data shows that it could be anywhere between 11 and 17 months to sell the property that was won at the palm beach tax deed sale.  If you're thinking about buying tax deeds in florida then expect to hold it for sometime.  I think it's good to know this type of information about buying tax deeds in florida before placing a bid.

How much money did the winning bidders make?

Before we get into that there are a couple of assumptions about the net profit that I should share with you with regard to palm beach clerk auction, and I think this might be true for buying tax deeds in florida's other counties as well.

I assumed there would be rehab cost for the property that I would buy at the palm beach county tax deed sale.  There is no way to know how much the rehab cost would there be but we can make some assumptions about buying tax deeds in florida.  When buying tax deeds for sale in florida most likely you would never be able to see what the inside of the house looks like.  Buying tax deeds in florida most likely will involve rehab cost and this could be major structural issues or it could be as minor as just adding some paint.  

Again, I assumed there would be rehab cost for the property that I would buy.  There is no way to know how much the rehab cost would there be but we can make some assumptions about buying tax deeds in florida.  If the property from the palm beach county tax deed sale is in really bad shape we can assume that it would be about $50/sqft in rehab cost.  The reason I was inclined to put $50/sqft initially was because if you buy a house through tax deeds for sale in florida there could be major structural issues such as the need for replacing the roof or what if the house has structural issues that needs to be fixed before selling it.  As you are probably aware if the roof needs to be replaced your potential buyer is going to ask for a big discount and that would reduce your profit as well.  I think it's important to consider your rehab cost before buying tax deeds in florida.  In addition to all of this there could be additional expenses for buying tax deeds in florida such as paying for pulling permits and inspection from the various municipalities and replacing furnace, AC, water heater or dryer vent.  Also, what if there is flooding or water seepage after buying tax deeds in florida.  After obtaining tax deeds for sale in florida if you are a person who can do the work yourself, you can save some money in labor cost but at the same time you would still have material cost such as having to buy new hardwood floors.  Also, after buying tax deeds in florida one thing you should do when you hire a general contractor is to get the costs for labor and material separately.  The reason is because you could see the stark difference between the labor cost and material cost.  

However, I assume that the rehab cost is somewhere in between the low end and the high end.  I make the assumption that the palm beach county tax deed sale property would cost $30/sqft for rehab cost.  In addition, after winning the palm beach county auction I would have to spend money for quiet title action.  The concept of quieting the title is part of the cost of buying tax deeds in florida.  When it comes time to sell I would have to probably have to pay a realtor and there would be additional closing costs for buying tax deeds in florida.  In case there is someone living at the place I would have to spend money for unlawful detainer and in addition if you’re using your own money or have a loan for the rehab cost I assumed an interest rate payment.  I also included the property tax and documentary stamp fee to the expenses for buying winning the palm beach tax deed sale.  In addition there could be other expenses after buying tax deeds in florida, such as the expenses for staging the interior of the property.  If you are not aware staging could increase the property value by furnishing and making it look nice.  The cost for staging could run to about $2,000 for a six month contract depending on the company.  I think after buying tax deeds in florida and fixing it up the cost for staging is well worth it.  Also, the other cost that didn't include here is the cost to setup a Limited Liability Company (LLC) for buying tax deeds in florida.  Actually, if you're doing this yourself you might want to setup two LLC since Florida doesn't have as much protection for single member LLC.  Setup one LLC in another state that gives more charging order protection for single member LLC and another LLC in Florida for buying tax deeds in florida.  This type of LLC structure is something you want to consider setting up before buying tax deeds in florida.

Expenses for calculating net profit for buying tax deeds in florida :

Rehab Cost:  $30/sqft
Quiet Title Action:  $4,000
Realtor and selling closing fees:  9%
Interest Expense:  10%
Property Tax:  Depends on property
Documentary Stamp Fee:  .70 cents per $100 of the winning bid

As you can see I had to made a couple of assumptions about buying tax deeds in florida and how much it would take to rehab the property after winning the palm beach county clerk auction.  For buying tax deeds in florida I put the realtor and the closing fees at 9% just to give some reserves in case the overall rehab expense comes up much higher than expected.  

Here is the net profit graph from the palm beach deed auction:

As you can see after looking at all of the expenses for buying tax deeds in florida the average profit for all of the sales that I looked at were -$24,812.  Most people who were the winning bidder at this auction and who had to rehab the property lost money on buying tax deeds in florida.   When we look at the box plot we see there are couple of outliers, but the median is still a $ -22,749.  This again means that most people who were winners of the palm beach county tax deed lost money.  These are some of the things to keep in mind if you're interested in tax deed investing.

Here is another way to look at the data for buying tax deeds in florida using the dot plot graph:

The dot plot shows that the net profit was a negative and we have a few outliers in either direction.  As you can see from the graph there are a few people that did make money from buying tax deeds in florida.  The above graphs shows some insight about how to buy tax deeds in florida.  I am interested in learning more about these people who were buying tax deeds in florida and actually made money at the palm beach tax deed sale.

What can we learn from those that made over $10,000 at the palm beach tax deed sale?

Out of all of the winning bidders at the palm beach county tax deed sale only 10 had a positive net profit.  Some of these net profits are so small it’s not worth the time or effort to win one of these palm beach county auctions for that small amount.  There were 6 that made over $10,000 in net profit from the palm beach tax deed sale.  Those that made over $10,000 in net profit, I want to know what they had in common when buying tax deeds in florida.  I think this is important to know if you're interested in tax deed investing.


When we look at the people that made a net profit of over $10,000 we can see that on average this group made $28,451 and the median for this group was $20,294.  It was as low as $11,185 and as high as $69,560.  When we look at this group as a whole we can see that there is a lot variation within this group.

Let's take a look at the individual value plot of those that made over $10,000 from the palm beach county tax deed sale

From this dot individual value plot we can see that 3 made less than $20,000.  2 of them made between $24,000 and $40,000.  One person made over $64,000 from the palm beach tax deed.  One of the main takeaways is that there are only going be a handful of properties that is worth winning.  As you can see only 10 properties had a positive net profit and out of those only 6 that made over $10,000 in net profit from the palm beach county tax deed.

How much did those that made at least $10,000 at the palm beach county tax deed sale pay for the property?

They only paid on average $37,650 for a property.  The median winning bid was $30,850 for this group.  The minimum purchase price was $11,000 and the maximum was $71,300.  

Let's take a look at the same data from an individual value plot:

The individual value plot graphs above show the same information about how much was the winning bid at the palm beach county tax deed sale.  They seem to win the palm beach county tax deed sales auction at a substantial discount.  How much discount?  I analyzed their winning bid and the eventual sale of the property to see first, how long they held on to the property and second how much did they sell it for and thirdly what was the percentage difference from their winning bid at the palm beach tax deed sales.

How long did those that made at least $10,000 from the palm beach tax deed sale hold their winning property?

We can see that on average they held the property for about 11 months and we have a very low standard deviation, which means there is not much variation among them.  The minimum amount of time that the winners held the property was 6 months, but it could go as high as 21 months.  However, the median was also around 11 months.  We can expect in the future with a 95% confidence interval that the winning bidders at the palm beach tax deed sale they would have to hold the property between 6 months and 17 months.  So much for “flipping” properties weekly.

Here’s another way to look at the data.  As you can see the minimum time they held on was around 6 months.

How much did those that made at least $10,000 sell the palm beach tax deed sale winning property for?

As you can see they sold the property for an average price of about $132,203 and with a median price of about $132,000.  Since this data is normally distributed we can make some assumptions about this data for the future.  If I were to make a prediction with 95% confidence interval that this group will sell the property between $76,738 and $184,867.

Here’s another way to look at the sell price after buying tax deeds in florida.  As you can see the lowest was $50,000 and all the way up to $205,000.  This concept is critical to understand if you're interested in tax deed investing.

What percentage discount did those that made at least $10,000 pay for the winning property from palm beach county tax deed sale?

I also wanted to know what was the price difference in percentage from their palm beach county tax deed winning bid to their sell price.


As you can see from these graphs the mean percentage buy to sell difference is about 73% and the median is 76%.  We can expect with a 95% confidence interval that these investors at the palm beach county tax deed sale will pay somewhere between 67% and 79% less than the eventual sell price.  This is an important concept to consider as you're learning about tax deed investing.

Lessons Learned from Palm Beach Tax Deed Sales

Download the free guide on the lessons learned from the palm beach county tax deed sales

What is the biggest expense for someone buying palm beach county tax deed?

If there were no expenses and you can sell the property really fast I think it would have been a winning game for anyone buying tax deeds in florida.  However, as you can see if you’re borrowing money to invest in buying tax deeds in florida then the longer you’re holding the property then the more it’s going to cost you.  However, I think the biggest expense is going to be rehabbing the place after buying tax deeds in florida.  I think learning about these expenses might save you some money eventually if you're interested in tax deed investing.

Here is an example of place that actually had a net profit and here it shows you what the expenses were after buying tax deeds in florida:

90% of the expenses came from 3 main areas of rehabbing the place, realtor fees and interest expenses after buying tax deeds in florida.  If you’re able to do the rehabbing on your own and able to pull the permits on your own after buying tax deeds in florida then I think you’re going to save a of money.  If you also did not take out any loans to do the rehab then you’re going to save a lot as well.  I think the area you're planning to buy is also an important consideration if you're planning on tax deed investing.

Where are majority of these palm beach tax deed sales properties coming from?

As you can see 59% of the properties are coming from two areas of West Palm Beach and Delray Beach for the tax deed auction palm beach county.

50% of the proprieties for palm beach tax deed sales are coming from the following zip codes of 33417, 33446, 33411, 33435, 33407, 33409.

How to do a palm beach county liens research before buying a house?

Unlike a palm beach county auction foreclosure you don’t necessarily have to worry about mortgage or HOA lien when bidding on palm beach tax deed sale and I believe this is true every where in Florida if you're interested in buying tax deeds in florida and here’s why:

Here is the information on tax deed sales Florida.  This same information is true in other counties for buying tax deeds in florida

what liens survive tax deed sale in palm beach county:

“no right, interest, restriction, or other covenant shall survive the issuance of a tax deed, except that a lien of record held by a municipal or county governmental unit, special district, or community development district, when such lien is not satisfied as of the disbursement of proceeds of sale under the provisions of s. 197.582, shall survive the issuance of a tax deed.”

Nothing survives the tax deed auction expect the following:

1.  Lien of record held by 

a.  Municipal or county government unit

b.  Special district

c.  Community development district

One thing they didn’t mention is the violations from municipalities that could become a palm beach county tax liens.  

Outline of What Liens Survive Tax Deed Sale (After Buying Tax Deeds in Florida)

You can also download the outline of what liens survive tax deed sale.  In addition to Palm Beach, the same concepts hold true for buying tax deeds in Florida.

How do you find out about palm beach county liens?  

I searched the website of the palm beach county clerk in the official records section to see if there were any lien on the property.  In addition, I searched the municipality violations sections as well to see if there any violations cited on the property as well.  You can also conduct the palm beach county deed search through the website of the palm beach county clerk.  The clerk’s office also has a link to palm beach clerk auction.  This site will show the palm beach county clerk auction that are coming up for the next few months.  Most times palm beach county tax deed sales is held once a month, but I have seen the palm beach tax deed sales twice a month listed on the palm beach clerk auction website.  Again, the concepts can be applied to any of the other counties if you're interested in buying tax deeds in florida.

What Liens Survive a Tax Deed Sale

As I mentioned only the municipal or county governmental unit, special district, or community development district survive a tax deed sale.  Since the top areas for palm beach county tax deed sale are West Palm Beach, Delray Beach, Boynton Beach, Boca Raton, Lake Worth and Jupiter here is who you can contact to get lien information.

When you call these municipalities to ask about what liens survive a tax deed sale, use the following key phrases, if you're interested in buying tax deeds in florida

Ask them what active and open cases do you have?

You should also ask them about if there is a building department where you can find out about open and expired permits violations

Lake Worth lien search

https://www.lakeworth.org/business/code-compliance/

West Palm Beach lien search

http://wpb.org/Departments/City-Administration/City-Hotline

Atlantis Code Violation search

(561) 965-1744

Jupiter fl code violations

https://www.jupiter.fl.us/RequestTracker.aspx

Jupiter Code Violation Phone Numbers

https://www.jupiter.fl.us/Directory.aspx?did=35

You can also see the Town of Jupiter Code Enforcement Violation Procedures

https://www.jupiter.fl.us/DocumentCenter/View/694

You can also see the latest notice of violations – I believe they only post that for 30 days

https://www.jupiter.fl.us/CivicAlerts.aspx?CID=12

Delray Beach code violations search

(561) 243-7203  Ext. 7101

Boynton Beach code violations search

(561) 742-6120

http://www.boynton-beach.org/departments/code_compliance/index.php

Boca Raton code violations search

561-393-7934

https://www.myboca.us/647/Public-Records-Request

https://bocaratonfl.justfoia.com/Forms/Launch/d705cbd6-1396-49b7-939e-8d86c5a87deb

How do I know how much tax is involved?

I searched the palm beach tax collector website to see how much tax due for the past few years.

I also wanted to test if there were relationships between the different variables.  For example, how does the net profit relates to the time and eventual sales price after buying tax deeds in florida.  I looked at the top winners and bottom money losers from the palm beach clerk auction and my analysis is below.

What is the relationship between net profit and the eventual sales price?

For the graph above we are looking at the relationship between the net profit and the eventual sell price of the property won at the palm beach tax deed sale.  We can see that there is a moderate positive relationship between the net profit and the eventual sell price after buying tax deeds in florida.  This means that as the sell price of the property increases your net profit also increases for the winning property from palm beach county tax deed sale.  What this means is that you should only bid on properties that would have a high eventual sell price at the palm beach county clerk auction or any other counties if you're interested in buying tax deeds in florida.

How much of a discount you should aim for at the palm beach county tax deed sale?

The graph above shows the relationship between the net profit and the how much of a discount they received from the eventual sell price.  The graph shows there is a moderate positive relationship between the net profit and how much discount you got at the palm beach county tax deed sale.  This shows that the winners received as we discussed previously over 70% discount from the eventual sell price of the property won at the palm beach county tax deed sale.  Therefore, it is safe to assume that for future bids you should only bid on property that is over 70% from the eventual sell price.

What is the relationship between how long you hold the property and the net profit?

As you can see from above we are looking at the net profit and how long the winners of the palm beach county tax deed sale held on to the property.  You can see that there is a slight negative relationship between holding time and net profit after buying tax deeds in florida.  It shows that the more time you hold on to the property the less money you will make.  This means that ones you win a property at the palm beach county tax deed sale you should try to sell it as quickly as possible, because the more time you hold it, the more likely that you would have a negative net profit.

Palm Beach Tax Deed Sales Instructor
Palm Beach Tax Deed Sales Instructor

I am a graduate of Yale University and I am a Data Scientist. I started my career at a major investment bank in New York City. My investment books include How To Create A Trend Trading System For Stocks (2012), How To Find The Next Trend Trading Stock (2012), How To Win More With A Trend Trading System For Stocks (2013) and Every New Trader’s Greatest Enemy (and How to Beat It) (2013).

In addition to teaching and writing books about process improvement and financial markets, I also develop statistical and algorithmic financial models to generate superior risk-adjusted return streams. Capital preservation and risk management are at the core of my investment philosophy.

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