FAQs

Tax deeds and tax lien certificates take precedence over any lien or mortgage associated with the property (except those held by the IRS, county, or city). Tax lien holders get priority over anyone else with a financial interest in the property. There are two exceptions to this rule:

• 1. The IRS has priority over all previous liens.
• 2. Certain states reserve the right to take priority over other liens.

We perform a title search before ANY purchase and understand the detailed financing story behind every property before we make a decision to bid on a tax deed.

Tax deeds are considered a safe real estate investment for those with experience and familiarity with the legal process around them. Tax deed investments are backed up by the county and the property is used as collateral.

Since the property is collateral Optima follows a detailed screening process for each property, which includes:

• Title research – reviewing the chain of title to find any other existing liens.
• Drive by – inspecting the physical condition of the property.
• Market value analysis – Optima is a licensed real estate brokerage with 4 years of experience selecting value properties. We choose never to be too optimistic with the sale price. We set expectations low by assuming that each property is only as valuable as the cheapest one on its street.
• The Optima bidding process is very safe. We only bid up to 55% of actual property value, and most of the time we are able to get properties at 30% of value. So if the property value is $100,000 we will bid up to $55,000. The remaining $45,000 is our safety net.
• Optima does extensive research and focuses on counties that are expected to see average property values rise 3.5% - 5%.

Our investors make anywhere from 12% to 25% annually.

Our investors never become the property owners. Optima deals with all legal issues, any necessary construction, and repays the initial investment to the investor (and the interest owed) in 15 months.

This is a risk we (not our tax deed investors) take. If a delinquent tax deed is paid, the investor gets their agreed share. If a tax deed is not redeemed, Optima bids up to 55% of market value (less liens) at auction to purchase the property outright. If the property is not redeemed we bring in our own construction crew (at reduced labor and materials costs—we don’t pay retail) to quickly make the property attractive to new buyers or tenants. This why we target properties that are marketable and livable without major construction or legal work. Optima is a licensed real estate broker so we save an additional 6% on the commission when the property sells. That’s how we make it work.

To summarize - Optima savings include discount labor and materials, not paying a real estate commission, and using our experience to complete the project fast and cheap.

Regardless of the funds available to each investor, we like to start with $30,000 for the 1st transection. We want the investor to feel safe and comfortable. After the purchase of the first tax deed, the investor can invest as much as he likes. In the first transection Optima will usually partner with the investor in the same property – a dollar for dollar match. We like our investors to feel extra safe, and unlike some investment firms, we are willing to show our confidence in our investment method by putting Optima’s funds in the same boat with our investor’s funds.

Investment funds are held in an escrow account. While the money is not being used to buy tax deeds it belongs to the investor and the investor can get it back. Once the funds are needed, we withdraw the money from escrow and the investor starts to gain interest. After the tax deed purchase, the money is held with the county. When the property owner pays the taxes owed, the county returns the funds to the investor. If the property owner does not pay their taxes in the required amount of time, the county keeps the funds, the investor get the initial investment plus the fixed interest, and Optima gets the property, taking care of any legal fees, filing for a foreclosure action, and clearing all interested parties.

Investors don’t need to be concerned with a property’s condition. Remodeling or any work on the property needs to be done ONLY if a property is not redeemed. At this point, the investor has already CASHED OUT and Optima takes care of any headaches related to eviction, remodeling, or maintenance. Tax deed investors need only concern themselves with the tax deed portion of the investment.

IRS rules state that the only investments unavailable to an IRA are life insurance and collectibles (such as art, stamps, coins, and so on). Tax liens, deeds, private loans, real estate, and other investments are all available options for IRA holders. Today, many tax lien investors are not aware that these certificates can be purchased as a part of an IRA’s investment portfolio. But in order to invest in a tax lien using a retirement account, the IRA must have the correct account structure. If you hold a “self-directed IRA” or a “real estate IRA,” you will be able to direct funds into any legitimate IRA investment, including tax liens.