Tax Lien Investing
Pays High Rates Of Return
Tax lien investing pays high rates of return. Start a legitimate home business buying tax liens and tax deeds at auctions. It is easy to learn how.
You are familiar with the fact that when a person owns real estate, they have to pay property taxes annually.
When a property owner defaults in paying their county's real estate taxes, delinquent property taxes accrue interest at the amount specified by state law plus penalties unless a lower interest rate is bid at the tax sale auction.
In Arizona, the maximum interest rate on delinquent property taxes is 16% simple interest prorated monthly. In Texas, the rate is 25% to 50%. In other states, the interest rate may be different.
Counties need the tax levies in order to pay for services they offer. They want the money now, not some time in the future. State law allows counties to collect the unpaid taxes by selling a
certificate or tax deed at auction.
This gives you, the tax lien investor, an excellent opportunity to start a legitimate home business that pays you high rates of return.
Tax Lien Investing - How To Get Started
As with any real estate business, it is highly advisable to learn the basics before you start. Each county procedures and state laws are different.
You need to know about redemption rights of the property owner, your obligations under the law, the bidding process, what you are actually buying, etc.
There are five ways of learning about tax lien investing:
1. You can contact each county (check their websites) for the basics about registering and bidding for their tax lien certificates or deeds and learn the ropes on your own.
2. You can buy a few books and ebooks about the subject. I recommend reading
"The 16% Solution How to Get High Interest Rates in a Low Interest World with Tax Lien Certificates" by Joel S. Moskowitz, J.D.
3. You can take a
tax lien seminar or workshop
on the subject.
4. You can hire a real estate lawyer from the state(s) you wish to invest in and have him or her instruct you about the process, do's and don'ts, risks and rewards.
You can attend a tax lien auction.
I would do all five. Start by buying and reading the recommended books above. Does it sound interesting and rewarding to you? If it does, I would then take
John Lane's Tax Sale Workshop.
It is available online via a webinar, or you can take his workshop in person. I did. Fantastic!
Next, I would check out the county's website and learn the requirements of registering and time and location of the next auction.
A couple of weeks before the auction occurs, a list of available properties to bid on will be published in the county's local newspaper or a legal newspaper. It may be available also at the county website. The county website should be able to give you that information.
John Lane CEO of TaxSaleLists.Com LLC also has lists of tax lien properties in many states available to purchase. He will keep you up to date on pending auctions for tax lien certificates and tax deeds.
Got your list of properties? Great, it is time to check each one out. You need to do your due diligence! Failure to do so, may cost you greatly.
You wouldn't want to bid on a crack house, swamp land, or a landfill would you?
One property I checked out was an old landfill. Other properties were unusable small strips of land that had no real value except to hold the earth together.
Others were dumps in questionable locations. I even found 3 brand new model homes plus several vacant lots in a golf course community in Arizona. You may find commercial properties, vacant land, you name it. You never know what you will find.
You will want to find out which properties have already been redeemed, that is, the owner has already paid off the back taxes. Don't waste your time with them.
You will also want to determine what type of property it is. If you are a beginner at tax lien investing, then you should stick with residential homes.
Residential homes will most likely be redeemed by the owner. 95% do. If not, they are more manageable if you have to foreclose on your tax lien.
You will want to know the tax key number, legal description, property address, lot size, owner's name, and assessed value. You may want to know the number of rooms, number of bedrooms, and number of bathrooms.
You will find this information by checking the county records at the register of deeds and county treasurer's office. Some county records can be found online. You can stay home and check out the properties records. That makes life a little easier when you can.
Once you have checked the public records, it is time to do your drive by. Set up a plan of the route you will take to drive by the properties you are interested in.
Bring a digital camera along and take a snapshot of each property. It will come in handy later when you need to refresh your memory.
Have all your due diligence done? Great, you are ready for the auction.
If you haven't already checked the county treasurer's website or office for the requirements on registering and the bidding process, do so now.
Register with the treasurer's office and fill out a bidder's information card. It will require your legal name, name of contact person, valid mailing address, current email address, and tax ID number. You may be able to register online in large populous counties.
I would suggest that you first attend an auction in person and get a feel for how an auction is conducted. Once you are comfortable with the procedure and confident that you are ready for tax lien investing, join the fun.
Tax lien investing can be a very profitable and legitimate home business. If you like to earn interest on your investment that exceed CD rates, you have found the road to high rates of return. Remember 95% of all tax liens are redeemed eventually.
Like to buy property for the taxes owed, you may do that too! Treat it like a business and you will do well.
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