FAQs about The PIP Group and investing in tax liens, deeds, and foreclosures
About The PIP Group
How many clients do you have?
We currently have over 700.
How many clients do you have in your Fix & Flips program?
At least 50 at this time.
What is the time frame for your fix & flip program?
Approximately 6-9 months from the date of placement of funds.
Is the property bought in the client’s name?
No, we go to the auctions as PIP and may purchase multiple properties; so the purchases are made in PIP’s name and then quit claimed to the client.
What type of returns have you seen with your fix & flips?
We have seen amazing returns from 20% to 34%.
Are the properties ever occupied?
Occasionally, the properties are occupied, but not often. In the case that they are, we have reached out to the occupant and let them know they are no longer the owner. They then have the option to purchase the property directly from PIP or to vacate the property.
How involved does the client need to be in this process?
The client may be as involved as they wish to be; but this is truly a passive investment and PIP manages all aspects from the purchase, through rehab and sale.
What states do you work in for Fix & Flips?
We are currently focused in GA, as these properties are in our backyard; but we are also expanding into NC.
How many Fix & Flips do you expect to have this year?
We will manage at least 300 fix & flip properties this year alone.
How do you manage so many properties at once?
We have numerous contractors and property managers that all work together diligently to ensure a great product and seamless turnaround time.
What does the project entail and what is the general sequence of events in fixing the home up?
Of course, it will vary from project to project; but the general sequence of events is as follows: Once deed has been received to the property, inventory is taken as to what needs to be purchased to repair the house, i.e., flooring, paint, etc. Sometimes the properties require trash outs and yard cleanup, as well. Once the flooring and appliances (if needed) are installed, the house is put on the market with established realtors. If the property is located in Illinois, we, of course, obtain bids from various contractors for the owner’s review and approval. Once the bid is approved and the investor has agreed to repair the property, we have the contractor begin repairs. Once the project is completed, (we hold them to their deadlines), we then enlist our realtor local in the area to list the property.
What commission will I get from listing this property?
It is a flat $2,000 commission split between buyer/seller agents. If more than $30,000, we pay 5% commission.
Do you have a guide for repairs, i.e., so that I can configure my bid to your company's expectations?
Not at this time. Depending on the property, I will ask the contractor to either bring it to “livable” or, if instructed, will give more detail as to how we want the property rejuvenated.
How much will the surveying company charge me for the survey?
Why is a survey required for a fence to be put up? It varies between the surveying companies, but typically it is between $650.00 to $750.00. The survey lines and pins must be marked so that the fence maker knows where the property boundaries are. Also, it is good to place the fence one foot inside the property boundary to ensure no future discrepancies with the neighbor.
The property I have deed to is occupied.
How long will it take to evict the occupant? This can take some time; however, it does come to conclusion. Also, the letter of the law must be followed. Five to eight weeks can be the longest stretch of time. The occupant needs to be notified via certified mail at the onset of this process.
Do you already have realtors and contractors in place to see to my property?
Yes, generally speaking, we do. However, if we do not, we will find one fairly quickly. We are developing relationships with realtors and contractors all over the state.
How many bids do you acquire before making a decision?
Usually two or three.
Who gives approval for the bids?
The owners review and give approval for the bids.
Do you monitor the progress of repair closely?
Yes, we monitor the progress closely to ensure everything goes smoothly.
How many properties do you manage in IL?
I would honestly say we are managing a few hundred at the current time. This includes properties that are listed and not under repair at the moment.
What is a Sale-In-Error?
A SIE occurs when a property owner’s taxes were sold by the County; when in fact, they should not have been.
Must you redeem even if you think your taxes were wrongfully sold anyway?
No, you should get a lawyer asap to seek your options or a sale-in-error.
Can anyone request a sale-in-error declaration because any homeowner believes an error was made?
No, there are guidelines & measures to be reviewed.
What are (2) guidelines for a sale-in-error?
a. Property was not subject to Taxation
b. Property Owner files for Chapter 7,11,12 or 13 (US Bankruptcy
During the Sale-In-Error process do the homeowner still have rights to the property?
YES, the owner still have rights unless a TAX DEED has been issued.
If a homeowner is active military or reservist & his/her taxes were sold, can a sale-in-error benefit them?
Yes, this is an option for the homeowner because the Servicemembers Civil Relief Act offers owners limited delinquent property taxes & penalties.
Does a tax buyer lose his/her investment when a sale-in-error is processed?
Actually, if it’s approved, a refund is ordered back to the tax buyer.
If you buy a Tax Lien on a Church or Government owned property, what can you do?
Most of the time, places like this are exempt from taxes and you could move forward with a sale-in-error; however, churches are required to renew their tax exempt status annually. If not, the sale is valid.
What happens when a residential house sits on two parcels, but only one tax lien was sold?
If a property’s description is changed and delinquent taxes were sold, the assessment was not processed correctly. A sale-in-error can be an option for the home owner.
Does a sale-in-error benefits the tax buyer or home owner?
Both. The homeowner is no longer at risk for losing the property and the tax buyer is able to recoup losses for his/her investment.
What about first mortgages and other liens?
A: Tax deeds and tax lien certificates hold seniority over any lien or mortgage (excluding city) attached to the property and/or anyone else having interest in the property.
There are two exceptions to this rule:
1. The IRS has priority over all previous liens but limits their collection time to six months.
2. Certain states reserve their rights to take priority.
Why have I not heard of these investments before?
Individuals have been investing in tax deeds and tax lien certificates for decades, gaining the same kind of profits that we have already explained. Unfortunately, tax liens require a lot of knowledge and usually the only people who invest are those already in a related field. Now, agents like The PIP-Group are making this investment more popular.
What are the risks and how can I lose?
• Invest without experience and proper knowledge.
• Hire an agent who has little knowledge and their bottom line, not your investments in mind
• Purchase liens on useless property
• Purchase liens which exceed property value
• IRS liens
What are the hidden costs?
There are no hidden costs. Depending on the area we are investing, you may find that there is a $10 registration fee or possibly a redemption fee of $15 the county assesses. Certain states/counties require Take Notice fees and/or Lien Assignment fees. These costs are often refunded through the redemption process.
How can I be certain you place my investments properly?
The Tax Deeds and Tax Lien Certificates are purchased for you, in your name. We are contracted to do so. In addition, investment checks have always been made payable to the County government; although, the counties have increasingly been changing their processes and procedures that could affect this method of payment for the purchases. Our procedures are subject to the rules that the County sets.
What are the costs involved with foreclosure?
Cost can vary greatly.
• We have foreclosed tax lien certificates for as little as $30 and for as much as $3500.
• The average cost to foreclose is approximately $1,500.
What if I decide to do this on my own, without your help?
Investing in tax lien certificates can be extremely rewarding. Unfortunately, many tax lien investors don’t realize that you can suffer substantial losses and, in some cases, complete loss if proper research is not done prior to the purchase of tax liens.
Once I foreclose or purchase a property, can I sell it?
Yes. Upon paying the bid price of the property, plus recording/stamping fees, you are free to do with the property as you wish. However, we recommend “quieting” the title immediately upon purchase.
What if the property I own needs maintenance?
As your agent, The PIP Group provides you with professionals in all aspects of real estate and property maintenance. Whether you need a lease agreement, closing statement executed, plumbing, or a home painted, The PIP Group has the ability to suit every need possible or obtain specialized services that can.
How is the client protected against fraud?
The way that PIP-Group operates has been developed with the intent to grow the trust and confidence of the Client in our services, and thus hopefully to reduce the possibility of fraud. First, PIP-Group is an Agent to purchase and Manage your tax lien investments, but the Client, not PIP-Group, will own the Investments (vs. a managed funds that pool capital). Your ownership of the tax lien (or any) investment does not require the existence of PIP-Group. If PIP were to decide to discontinue operations, the Client owns the investment and can change the address of record to that of a replacement Agent to manage the tax liens. Second, although not insignificant, The PIP Group has a relatively small minimum investment ($25,000) such that an investor can test our performance and service before investing further funds. Third, PIP-Group demonstrates the expertise by providing significant information about tax lien
Once a lien certificate is purchased and all associated costs are paid at the auction, what other cost would be expected?
The answer to this question will vary depending on the state you invested.
Generally speaking, there will be notice fees, assignment fees, sub-taxes, or
otherwise. The fees vary widely from one state to the next.
If our funds are invested in the order received and we remain invested next year, do we move up in the pecking order or do we remain forever in our original slot?
The order of checks received only applies to the upcoming target auctions.
Clients’ funds are placed and the Final Report delivered and the process is
Are there any redemption fees when I want my money back?
When a tax lien redemption occurs, PIP-Group sends the redemption funds to the Client when received from the county and the Client deposits them in their personal account or their IRA. No fees are charged on redemptions. If you mean can you cash out of your purchase, Tax Liens are illiquid investments that you own, and they must run their course. However, if you find a buyer, it is a simple matter of submitting an assignment request to the county to transfer title.
Do you only buy residential homesteads? If not and you buy commercial do you stay below a certain value?
PIP-Group emphasizes all property types which we believe have a higher chance of redemption, thus the liens could be on residential properties (both improved and unimproved/land), commercial, and farmland. We avoid industrial property types due to the possibility of EPA issues. If a Client is particularly interested in commercial properties or other specific types, there would be better strategies by which we could acquire such a property at a significant discount, rather than hoping for the chance to foreclose on that type through a tax lien in a high redemption rate state like IL. Some examples are GA or TX Redeemable Tax Deeds and Secondary Market Acquisitions.
What if I bought a lien and found out later that the house burnt down? Have I lost my investment?
PIP-Group purchases liens for which the lien cost to county-assessed property value ratio is under 10%, so if the house burnt down, there would still be value, Additionally, certain states offer provisions that protect tax buyers from this very scenario.
Would we own individual tax lien certificates or be a part of an investment pool of liens?
You would own individual tax lien certificates, and PIP-Group’s final purchase report to the Client would include copies of all certificates owned by the Client.
Who does the actual investing, me or someone else for me?
The PIP-Group is a full service Tax Lien Servicing Agent, from start to finish.
What do you see as the risks associated with investing in tax lien certificates?
We like to call tax liens “High-Yield Conservative investments” – almost an oxymoron – because they are secured by property and the payoff is known at the time of purchase (i.e. the interest or penalty rate on the certificate). The main risk that I can identify is the level of knowledge and experience of those participating in the tax lien investing activity. All steps from the due diligence, through the redemption or foreclosure of the lien, many of which are as follows: purchase objectives, due diligence, county auctions, legal filings, lien management, redemptions, foreclosure, etc.
Is the income payable at the end of the holding period for the lien or before?
When a tax lien redeems, the full principal and interest are paid to the county by the property owner, and The PIP Group receives it soon after and passes it along to the client after entering the data into our database.
What is the average time to wait on a tax lien purchase before you can realize a profit?
Tax Liens can redeem in as little as a day following the purchase up to the maximum redemption period of three years and beyond. The lien remains on the property indefinitely.
Attending all the public auctions sounds like it would require a lot of resources. How many PIP people are on your staff to do this (or do you contract agents working on your behalf)?
We have a network of staff and agents that work for us locally (within the markets we operate).
Can you buy Over-the-Counter, or “left over” liens online? Where and how? Why doesn’t PIP-Group purchase over-the-counter liens?
Although there is a substantial market and some investors profit from “left over” liens, The PIP Group feels that if the liens were not purchased in the initial tax sale by professional bidders and they are “left over,” there is probably a good reason.
What are the steps of due diligence that are important in avoiding a bad investment?
Steps will vary, depending on location, type/use of property and the state/county laws affecting the lien.
Get started with The PIP Group today. Become a smarter investor and generating passive monthly income by investing in tax liens and distressed real estate properties.