Tax auction can be quite profitable

When someone doesn't pay his property taxes, the county Tax Collector's Office puts the parcel on a list that became available for the public to view this week online.

Some look at the list out of curiosity but others are shopping for an investment that pays as much as 18 percent interest and has the potential to pay off in a major way.

But it's not a good tactic for those unfamiliar with the perils and pitfalls of the game, experts say.

Some owners are already paying off their taxes. Of the 51,131 delinquent tracts on the original list, only about 48,000 were still in arrears by Tuesday, said Linda Baer, assistant director for customer support for the tax collector.

"Our reminder notices were just mailed about a week and a half ago," she said. "That basically reminds them their taxes haven't been paid. Sometimes people do wait for their income tax refund."

On May 25, there will be an auction of the tax certificates for all the property that is still delinquent as of 5 p.m. the day before.

Bidders offer to buy tax certificates for the amount owed on a parcel - the bidder who offers to take the lowest interest rate from the owner gets to buy the certificate.

If the property owner doesn't redeem the certificate in 22 months, the certificate owner can file to get a deed to the parcel.

That process takes about six months.

For those who choose carefully, it's a good investment, said Ed Bonkowski, a Fort Myers-based real estate and mortgage broker who puts investors in tax certificate purchases.

For those considering a bid, he said, "Caution's the word."

The danger is buying a tax certificate for a piece of property that isn't worth the taxes being paid off, he said.

For his clients, Bonkowski said, he only looks at properties with taxes owed in an amount no more than 3 percent of the assessed value of the parcel.

He evaluates properties in Lee and other counties, most of which now use online auctions.

But each county has its own procedures and a bidder needs to know them, he said.

Not all the property now on the list will be available for tax certificates.

Cape Coral real estate broker Greg Eagle, for example, has 961 parcels on the list either as trustee or owner but said he intends to pay the taxes before the deadline.

"It'll all be taken care of," he said.

Naples-based Stock Development has 580 parcels on the list, mainly from its sprawling Paseo project in south Lee County.

But Claudine Leger-Wetzel, Stock's director of sales and marketing, said that's only temporary.

"We are in the process of restructuring the community development district bonds" for Paseo, she said.

"Upon the completion of the restructuring, the tax issue will be addressed," she said. Courtesy Fort Myers News Press. Also view real estate listings at Real Estate at
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