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How do you actually ensure or force the payment of delinquent amounts?

The specifics vary by state.

In some states if the TLC has not been paid after 2 years you ask that a tax deed auction take place. The winning bidder pays the lien as part of the process.

In other states you effectively file for foreclosure and you get the property for pennies on the dollar (property taxes are normally a very minor amount compared to the value of the property).

In a few states you only get a percentage of the property but you would know that form the auction as the bidding is for the % that needs to be available for the TLC to be sold to the investor (you bid the % down until no one else wants to go lower).

The best way is to do your homework and only buy TLC where there is a home with a mortgage. The lender will pay off the TLC rather then be wiped out. If you buy a TLC it has a higher priority so the lender could lose the security for their loan if they do not pay off your position.


PS. Some of the complexity above is not as bad as it seems. Older folks in FL like bidding there as FL does not let a TLC result in the investor getting the property. At the same time the complexity is why I like investing in discounted notes. More or less the same amount of work for more dollars invested. Better time investment for me.
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