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Investing in Real Estate Tax Lien Certificates: Case Study

An actual case study looking at Florida tax lien certificates as an alternative investment to bank CD's and bonds.
Larry Aiello
1,524 students enrolled
English [Auto]
Learning the ins and outs of investing in Florida Tax Lien Certificates by way of a case study.
The difference between a tax lien certificate and a tax deed.
We will look at two of the main websites that host the auctions for the Florida tax lien certificate auctions (Grant Street and Real Auction).
County-Held certificates are also an investment option where the counties will sell their certificates at an 18% interest rate.
We will go over the tax deed application process if a property tax owner does not pay their tax liability within the redemption period.

This is an actual case study of my journey into investing in Florida tax lien certificates.

I will use my own funds and invest in this asset class for the first time and share my experience with you.

This course will look at the State of Florida only.

Most of the counties in the state conduct their auctions online.  And each of these counties use a third-party to run conduct these auctions and to run the software on their websites.

We will look at two of these companies that handle most of the counties within the state.

  • Grant Street (LienHub) – for Hillsborough, Pinellas, Pasco and Dade (Miami)

  • RealTaxLien (Real Auction) – for Sarasota and Polk County

My strategy for this investment is to not use the tax lien certificates as a way of owning real property.

My goal is to find properties that will redeem quickly so I can earn a return on investment that is greater than the money earned by leaving it in a bank and is secured by real estate.

Interest rates on tax lien certificates in the state of Florida start out at 18% and then get bid downwards in a reverse-style auction.

We will also discuss tax deed applications and the auctions that arise from these applications after the redemption period has expired.  This is a way for the tax lien certificate holder to force a foreclosure sale.

There are also county-held certificates that can be purchased at any time that accrue interest at an 18% annual return. 


I am not an investment professional.  Please discuss any investment with the appropriate professionals to see if this would make sense for your personal situation.


Course Overview

This lesson will provide a brief overview of the course and how it is laid out.  I will discuss the various companies that help conduct these various auctions online for the counties in the State of Florida.  There are even a few that still conduct their auctions live and must be attended in person. In the resources section there is a PDF file that has all the counties listed and the associated URL where you can register and bid.

Basics of Tax Lien Certificates in Florida

The Basics of Tax Lien Certificates in Florida

In this lesson we will look at the basics of tax lien certificates in the state of Florida and discuss the fact that they are liens against the property in question.  We will also look at the different priority of certain liens and how they get prioritized.

Difference between Tax Lien Certificate and a Tax Deed

This lesson will go over the difference between a tax lien certificate and a tax deed.  Many people get confused between the two terms since they are similar but they are two very different aspects of the property tax cycle.  And it provides two very different ways of investing in real estate. 

Using tax deeds as an investment in purchasing real estate is beyond the scope of this course but we will look at an overview of the process in this lesson.

Florida Dates and Time Line of Events Related to Tax Lien Certificates

This lesson will discuss the time line of events and important dates to remember during the Florida tax lien certificate cycle as it pertains to the property owner and for the potential investor that wants to bid on and purchase tax lien certificates.

Section Review

Here is a quiz to review what we learned so far in this section of the course.

Due Diligence and Investment Strategy

My Investment Strategy for This Year's Florida Tax Lien Certificate Auctions

In this lesson I will discuss my investment strategy for the upcoming auctions for the tax lien certificates that I want to purchase for this year.

My Budget Allocation and Game Plan By County

In this lesson I will go over my budget allocation and my game plan by county in how I am allocating my investment dollars.

Grant Street (LienHub) - Public Information

Drilling Down on Public Information - Individual Property - Pinellas County

In this lesson we will look at some of the information that is public information and available on the county website.  We can use this information to select the items where we want to place bids.

Drilling Down Even Further on Public Information - Pinellas County

This will be a continuation of the previous lesson.

Prior to the Auction

Grant Street (LienHub) - Introduction and Navigating Between Counties

In this lesson we will take a look at the websites for Hillsborough and Pinellas Counties which utilize the LienHub software owned by Grant Street.  We will also go into Dade County's site for the first time.  We will also discuss direct bidding versus proxy bidding.

RealTaxLien - Registration and W9 Information - Sarasota and Orange County

In this lesson I will go through the registration process for Sarasota County and show how you can jump between other counties that are served by RealAuction.com.  We will also look at some stats from the prior year and you will find it surprising on some of the rates that were awarded in last year's auction.   

Grant Street (LienHub) - Entering W9 Information - Dade County

In this lesson I will show how to enter your W2 information that the counties will require because they will be sending you a 1099 for any interest that you earn on any certificates that you win during the bidding process.

Grant Street (LienHub) - After W9 is entered (Dade County)

In this lesson the W9 is completed for Dade County and we will take a look how you can tell is has been accepted on their website.

Grant Street (LienHub) - Making a Deposit on Hillsborough County

In this lesson we will start out on Pinellas County (BidPinellas.com) and switch over to Hillsborough's auction site (BidHillsborough.com).  The nice things about the LienHub portal is that you can switch between the counties that they service.

Submitting a Deposit for Auction

While we are in the Hillsborough site I will make my deposit for the upcoming auction.  Every county has different requirements regarding the deposit that is required, so be sure to know what they are prior to bidding.   

Grant Street -Analyze Data with Excel and Filtering on Selection Criteria

Grant Street (LienHub) Looking at the Data Available in Excel Format - Pasco

In this video we will look at all the valuable information that is available in Excel format that you can use for your selection criteria when placing your bids.  The amount of data that these counties make available is amazing.  Much of the data will be irrelevant for bidding purposes but could come in handy later if you need to file for a tax deed application. 

Grant Street (LienHub) - Filtering using Excel continues for Pasco Couny

This video will be a continuation of the previous lesson where I will filter my selection to get ready to set up an upload file for Pasco County.

Grant Street (LienHub) - Filtering out Properties that have Redeemed

In this lesson I will show you how to get rid of the properties that have already redeemed (paid off) prior to uploading your bid information.  I did not realize this when I recorded the video, but if you were to upload items that have already redeemed, the county will ignore your bid.  It will not generate any type of error during the upload process.  But it will notify you with regard to the number of bids that were removed.

Grant Street (LienHub) - Filtering Based on Selection Criteria using Excel

In this video I will filter the data using my selection criteria for Pasco County.

Grant Street (LienHub) - Upload a Bid File - Pasco County

In this lesson I will show how to upload bids to one of the counties served by LienHub.com (Pasco County).  They call it upload bidding so you can upload multiple bids from a CSV file. 

RealTaxLien.com - Preparing Data with Excel for Upload

Analyzing Data in Excel for Polk County Prior to Bidding and Uploading

In this lesson I will make some last-minute changes to my bids and delete them the night before the auction takes place. 

RealTaxLien - Bulk Bidding - Polk County

In this lesson I will show how to upload bids to one of the counties served by RealAuction.com (Polk County).  They call it bulk bidding so you can upload multiple bids from a CSV file.  They also have the option of using a TXT file but I did not show that step since I am more familiar with using CSV files.

During the Day of the Auction

Grant Street (LienHub) - Making Last Minute Changes - Removing Items Manually

In this lesson we will look at Pasco county the night before the auction takes place and I will still refine my selection by eliminating a few items I do not want to include for the auction.

RealTaxLien - Changing Bids During the Auction (Polk County)

After the Auction

Grant Street (LienHub) - My Auction Results for Pasco County

In this lesson I will show you how you can analyze the results of your bids post auction.  I will be looking at my bids for the tax lien certificates for Pasco County which is one of the counties that is on Grant Street's platform called LienHub.

Grant Street (LienHub) - Analyzing Winning Bid Distribution for Pasco County

In this lesson we will look at the winning bids and the distribution of how they came out for Pasco County.  In Florida, for the tax lien certificates, bidding starts at 18% and can go all the way down to zero percent.  We will look at some of the reasons why some of them may end up at zero, even though it is a relatively low number.

Unofficial Results and Potential Errors

Even though Florida is considered one of the best places to invest in tax lien certificates, there are mistakes and errors that can occur.  We will look at a few in this video lesson.

My Actual Auction Results - Summary

In this video we will look at how I did compared to my original budget, how many certificates were won and the number of bids along with the face value of what I had to bid to win those tax lien certificates.

County-Held Tax Lien Certificates

Purchasing County-Held Tax Lien Certificates at 18%

In this lesson we will look at the opportunity that you have where you can purchase county-held tax lien certificates at a rate that earns 18% if you are willing to accept more risk.  There is an example of an email I received from Sarasota county, which is on the real auction platform.  We will also look at Hillsborough county which is on the Lien Hub / Grant Street platform.

Tax Deeds and the Auction Process in the State of Florida

Tax Deed Applications in Florida - An Overview

This lesson will go over the tax deed application process within the state of Florida.  We will look at the time frame that you have to file before your certificate expires worthless.  There are also some considerations you should consider in regards to when you should file and if you should wait. 

Due Diligence Before Filing a Tax Deed Application (TDA)

If you are ever in the position where you can file for a tax deed application there is some additional due diligence you should perform because you will be required to invest additional funds.  We will look at the minimum due diligence that you should perform in this video. 

Tax Deed Auctions

In this lesson we will look at the process of how we get to a tax deed auction and what happens after the sale is completed.  There are a few different scenarios that can come into play depending on if the property is a homestead property or a non-homestead property (i.e. a business, an investment property, etc.). 

After a Tax Deed Auction - Exit Strategy and Quiet Title

In this lesson we will go over the various exit strategies you may have once you receive a tax deed to a property.  There are also issues with the title that may come into play where you may need to file what is known as a quiet title suit.

Final Wrap Up and Lessons Learned

Lessons Learned for Future Investing

This lesson I will describe what I learned for this year and what could be done differently in regard to my selection criteria in seeking out a higher return.   I will discuss where I believe the opportunities are in where you may be able to earn a higher return. I will also discuss my intentions for next year if I plan on investing again and what I will be doing if I do plan on investing.

Annual Update - May 2020

In this lesson I will go over the results of the auctions that I was awarded in the previous year to see how many of them (if any) redeemed and how this investment for me is performing.   In the resources section there is a spreadsheet that I used in the video that you are free to use for your own purposes.  It is saved in an older version of Excel in case you do not have the latest version.  Notice how the annual return will change as you change the dates of the receipt.

Annual Update - May 2021

This is the second annual update to the course for the certificates that were awarded during the auctions of 2019.  We will see if any of the outstanding certificates from last year's update have redeemed and if I need to file for a tax deed application for any that did not.

Bonus Lecture

This is the final lesson of the course you can get a coupon code for my other courses and if you are ever in the Tampa Bay area perhaps we can meet at one of the real estate investing groups (REIA) that meet on a regular basis. We can go over our investment strategies.  I wish you the best of luck in your future endeavors.

You can view and review the lecture materials indefinitely, like an on-demand channel.
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