Welcome to South Carolina — where hope and new construction abound.
It is reported that every 16 minutes, a new house goes under construction. And from what I’ve witnessed, I cannot disagree.
I awake each morning to a construction concerto: the heavy equipment carrying the bass line… the percussion of hammers and nail guns establishing the rhythm… and the whine of Skilsaws rounding out the string section.
I am thrilled by all of this development. It’s a big part of why South Carolina is high on my list for tax liens.
South Carolina has a unique process when it comes to tax lien investing. The state offers a graduated rate of return — which doesn’t get me overly excited — but the redemption process does. It is, in my opinion, very much in favor of the tax lien investor.
Let’s start with the rate of return, which is as follows:
- 1–3 months — the investor receives a 3% interest rate
- 4–6 months — the investor receives a 6% interest rate
- 7–9 months — the investor receives a 9% interest rate
- 10–12 months — the investor receives a 12% interest rate.
These rates appear modest compared with the other states I like that offer higher rates of return.
But just wait until I explain the redemption process.
The Redemption Process
On or around April 1, after the county treasurer has compiled the list of delinquent taxpayers, they will send a letter to each delinquent property owner stating the amount needed to satisfy the property tax debt. This amount includes the delinquent property tax payment plus penalties, assessments and other administrative fees.
The letter also specifies that if the property owner does not pay the delinquent property taxes, their debt will be advertised and the lien sold.
In South Carolina’s 46 counties, most auctions will be public auctions, and the tax liens will be sold to the highest bidder. (It is important to remember that you will not receive any interest on the overage.) The winner must pay the winning bid on the day of the sale.
Upon payment, “The person officially charged with the collection of the delinquent taxes will provide the purchaser a receipt of the purchase money.” You will need to reference this receipt throughout the redemption process, so be sure to keep good records.
This Is Where It Gets Interesting
South Carolina has a one-year right of redemption. But get this…
On the day of the auction, the county sends a notification to any bank or mortgagee or judgement creditor stipulating that they have one year from the sale date to redeem the delinquent taxes, assessments, penalties, fees and interest.
I like this because, essentially, the county has already begun the foreclosure process in the event of nonpayment. This substantially reduces the time it takes to obtain the deed to the property in the event of default.
If the lien is redeemed within one year from the date of sale, the county will notify the purchaser by mail to return the tax sale receipt so the successful bid amount and all accumulated interest can be expeditiously paid.
The Final Countdown
Within 45 days (and no fewer than 20) before the end of the redemption period, the county will send a notice via certified mail to the delinquent property owner, mortgagee, grantee or lessee of the property.
This letter explains that if the delinquent property taxes, assessments, penalties, fees and interest are not paid on or before the one-year date from the date of sale, a tax title must be delivered to the successful purchaser.
Even if the certified letter is returned as undelivered, that is not grounds to keep the successful purchaser from receiving the tax title to the property. The purchaser is considered in possession of the property when the delinquent property owner delivers the tax title to the clerk of court or register of deeds.
Additional fees will be included such as the cost of mailing certified letters and advertising the sale, as well as expenses for taking possession of the property and the upcoming year of property taxes.
I like the county’s involvement in the redemption process, because it enables the tax lien holder to procure the deed to the property within 30 days after the end of the right-of-redemption period.
This saves a substantial amount of the investor’s time, since the foreclosure process in most states can take anywhere from a few months to a year — or longer.
It’s important to note that if you do not take action to foreclose within two years from the sale date, you will lose all means of recourse. Basically, your tax lien expires.
More than likely, the tax lien will be redeemed by either the property owner, the mortgagee or a judgment creditor. It’s how fast they redeem that determines your rate of return.
In the event the tax lien is not redeemed, South Carolina has a simple and straightforward process in place for you to collect the deed to the property.
That’s why I like investing in tax liens in South Carolina. It’s easy to win big, and the county does all the heavy lifting.
Land of Opportunity
In my opinion, investing opportunities in South Carolina can be broken down into four target areas:
- Myrtle Beach
- Charleston and the surrounding area
- South of Charlotte
- The Greenville/Spartanburg area.
Most of the population growth in South Carolina is happening along the coast. Myrtle Beach and Conway (the county seat and the fifth-fastest-growing city in the state) are prime areas.
Myrtle Beach and Conway are located in Horry County — pronounced “Orry” with a silent H, as I have been corrected numerous times — which is the largest county in terms of land mass. Because of the reasonable costs of housing and living, the real estate market in Horry County is booming.
Most of my neighbors, regardless of age, are from the Northeast and mid-Atlantic regions. Like myself, they have sold their homes and used the equity to buy very nice, slightly smaller homes for a fraction of the cost.
In addition, the property taxes in this area are considerably lower than what new homeowners paid in other states, and the county offers tax benefits for those who are retired.
Overall, residents enjoy a high quality of life in Horry County. There’s the beach, a multitude of golf courses with very reasonable green fees, plenty of shopping centers and tons of other activities.
Another area to keep an eye on is called Longs. This up-and-coming area in close proximity to North Myrtle Beach is, in my opinion, the next booming region.
Charleston: South Carolina’s Oldest City
It’s hard not to place Horry County at the top of my list of target areas to look for tax liens, but the area in and around Charleston might give Horry County a run for its money.
Of the 10 fastest-growing cities in South Carolina, four are located in the two counties in and around Charleston: Charleston County and Berkeley County.
The city of Charleston (as you might guess) is located in Charleston County, which also contains the seventh-fastest-growing city, Moncks Corner.
Berkeley County contains three of the fastest-growing cities in South Carolina. Mount Pleasant is the eighth on the list. Here you will find upscale neighborhoods in close proximity to Charleston.
Hanahan (city No. 6) provides more affordable housing and a high quality of life a short drive from Charleston. Summerville comes in at No. 10.
South of the Border
South of Charlotte, North Carolina, is York County, South Carolina, which includes Fort Mill and Tega Cay, the third- and fourth-fastest-growing cities in the state.
Only a quick 20-minute commute away from Charlotte, these two cities benefit considerably from Charlotte’s growth, economy and employment opportunities, making them great areas in which to invest.
Last but Not Least…
Personally, I have always liked the Greenville/Spartanburg area. The people are friendly, and the area has affordable housing, a low crime rate and a high quality of life. Although the pace may be quite a bit slower than you are accustomed to.
There has been considerable growth in this area, particularly in Greer. Greer and Simpsonville are big hot spots in Greenville County, with lots of growth and new construction.
Likewise, to the northeast of Greenville is Spartanburg. Located in Spartanburg County, it too has experienced exceptional growth in Boiling Springs and Duncan.
Clearly, South Carolina offers so many excellent opportunities for investing in tax liens, it’s easy to see why it’s at the top of my list.
And remember, in South Carolina, you can win big with minimal effort while the county does all the work.
Expect the best,
Mark R. Walter
P.S. Investing in tax liens is unbelievably easy… if you know what you’re doing. That’s why Mark put together this course — to teach folks like you and me how to invest and get paid. Why wait? Click here now and see how you can learn to start investing in tax liens today.