Tax Lien Certificates Investing

I finally figured out why I’ve been successful at investing in tax lien certificates, but have not been very successful at other types of real estate investing. All this time I thought it was just because there’s less money needed for tax lien investing than there is for most other types of real estate investing. But now I think that I’ve found out the real reason. It’s my negotiating and communication skills, or should I say lack thereof.

Most types of real estate investing require negotiation and communication. You have to get on the phone and talk to someone, negotiate a price, and make a deal. Worse than that, you might have to make a few cold calls – you know call someone that has a property for sale or rent who doesn’t know you from Adam, ask them about their property, and determine if they’ll sell it to you, at a discount and preferable for no money down.

Well I don’t know about you, but when it came to these calls I was terrified of the phone. It wasn’t actually the phone that I was afraid of but the person on the other end of it. It didn’t matter if they were calling me and responding to one of my “we buy houses” ads, or I was calling them on their for sale or for rent ad. And then I had to meet them in person, look at their property and negotiate a deal. I just didn’t consider myself a good negotiator.

With tax lien investing on the other hand, there is nothing to negotiate. Usually, I never have to talk to the delinquent taxpayer. The only person that I have to talk to is the tax collector and maybe the other bidders at the sale. I don’t have to negotiate the terms of the deal. State law already specifies all of that. All I have to be concerned about is exactly how low in interest or how high in premium I want to bid. No negotiating skills needed – Another benefit of tax lien investing over other types of real estate investing.

You can find Joanne’s articles at http://www.taxlienconsulting.blogspot.com. Joanne Musa is a tax lien and tax deed investing expert who helps investors buy profitable tax lien certificates and tax deeds. You can find out more about the excess proceeds strategy of tax deed investing and get a Free mini-course at www.TaxForeclosureFortunes.com.

Article Source:http://www.articlesbase.com/investing-articles/investing-in-tax-lien-certificates-an-advantage-over-other-types-of-real-estate-investing-842425.html

P.S. Here is the Best Course for Investing In Tax Lien Certificates And Tax Deeds. Audios, Manual, and Resources. Click Here!

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Recently someone contacted me with a very “valuable” lien that they had for sale. They didn’t have the money to foreclose on the lien and wanted either to sell it or partner with someone on foreclosing it. (Have someone else hire a lawyer to foreclose on the lien and share in the profits). When I checked into the property, I found out that it was a vacant piece of land with little value, and the lien holder had already invested more than $16,000.00 into this lien. They had paid subsequent taxes over a few years and when they stopped paying the taxes the lien was struck off to the municipality.

Because this was not a good property the municipality never foreclosed the lien as well. The original lien was purchased back in 1993. The municipality picked up the lien in 1997 and the back taxes owed on this property now are probably more than the property is worth. I had to give her the bad news that her lien is not worth foreclosing on and she won’t be able to sell it. If she only knew when NOT to buy a tax lien, this bad investment would have been avoided.

So here is a list for you of a few reasons not to buy a tax lien. Be sure check the items on this list for tax sale properties before you purchase a tax lien certificate on the property and you’ll avoid taking an un-necessary risk with your money.

• There are very low annual taxes for the property (lower than usual for the area)
• You can’t find the property on the tax map
• You can’t locate the property to look at it
• The property has an unknown owner
• The property is land locked with no right of way
• The property is not large enough or not the right shape to build on (check zoning)
• There are prior tax liens on the property and the prior lien holder is at the tax sale
• The property is or has been contaminated (check the state environmental web site)
• The property is condemned or about to be condemned (eye-ball the property or check with the municipality)
• The grade of the property is too steep to build on
• The property is in a flood zone

These are just some reasons not to buy a tax lien certificate. I don’t want to give you the wrong idea. Investing in tax liens can be very profitable. I believe that it’s an excellent way to invest your money safely if it’s done properly. You can find out all the reasons why I like in tax lien investing in my article Why Do I Invest In Tax Lien Certificates.

You can find Joanne’s articles at http://www.taxlienconsulting.blogspot.com. Joanne Musa is a tax lien and tax deed investing expert who helps investors buy profitable tax lien certificates and tax deeds. You can find out more about the excess proceeds strategy of tax deed investing and get a Free mini-course at http://www.TaxForeclosureFortunes.com.

Article Source:http://www.articlesbase.com/investing-articles/tax-lien-investing-reasons-not-to-buy-a-tax-lien-834513.html

P.S. Here is the Best Course for Investing In Tax Lien Certificates And Tax Deeds. Audios, Manual, and Resources. Click Here!

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A tax lien certificate is nothing more than a lien on a property for not paying taxes. Essentially, each and every year owners of real estate have a tax lien (aka financial obligation to pay taxes) placed on their real estate. If the property taxes are paid on time the tax lien is removed.

If they are not paid, in due time the county government will allow investors to pay on behalf of the real estate owner. The winning bidder at the public tax lien auction receives a tax lien certificate as proof of purchase. As the owner of the tax lien certificate the investor may expect one of two possible outcomes,

1. An annualized return of 16%, 18%, up to 50% per year on what they paid to obtain the tax lien certificate or
2. Through foreclosure, become the owner of the real estate free and clear of any junior liens (aka mortgages and mechanics liens).

Once you become the owner of the tax lien certificate all you must do is sit back and wait. When the property owner finally decides to pay his tax obligation he / she must pay a visit to the county tax collectors office where he/she will repay what you paid to acquire that tax lien certificate plus interest. At this point the government will contact you, ask you to return the tax lien certificate and upon receipt of the tax lien certificate the government will generate a check in the amount you paid to acquire the tax lien certificate plus interest.

For those of you who are investing in foreclosures, this is another great investment that compliments foreclosures. For those of you that know lien priority you know that property taxes get paid first above everything else, even mortgages. Therefore, tax lien certificates are a very safe investment. So, next time you come across a foreclosure and you run a title report and find unpaid property taxes, you may want to see if you can invest in the certificate. It may be worth your time. The best part about Tax Liens is that they are available in every county in the U.S. The most popular county is Maricopa, in Arizona.

By Jared Severe – Enlightened Wealth Institute

For more information on Tax Lien Investing Click Here

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Tax Lien Investing: Do You Know How to Get Started?

It’s not unusual that many people intereste in tax lien investing really have little understanding of what is involved. Potential tax lien investors usually under estimate two things – the amount of money needed to actually get started investing in tax lien certificates and the amount of time that is involved in finding tax liens that will be profitable.

First, let’s briefly discuss the amount of time involved in investing in tax lien certificates. Tax lien sales in most states (for a list of tax lien versus tax deed states go to http://taxesandliens.com/liens_&_deeds_by_state.php) are usually held on weekdays during normal business hours.  Therefore you will need to have the time to go to the sale to bid on the properties that you are interested in. Some states let you mail in your bid, but it’s to your advantage to be at the sale.  Other states and counties are even hosting their auctions on the Internet.

But going to the auction is less than half of the time that you will need to spend if you want to invest in purchasing profitable tax liens. Before you even get to the point of going to an auction you must perform some type of due diligence on the properties that are in the tax sale. The listings of properties that you obtain prior to the sale from the tax office, usually do not tell you anything about the property or its condition. Quite often this tax sale list will only give you the tax ID, owner on record and amount owed in back taxes. These list commonly don’t even give you the location of the property – just a parcel or tax ID number!

This leaves you with going to look up the assessment information on the property and find the address (you can find this information here http://taxesandliens.com/county_tax_assessors.php). It is highly recommended that you physically look at the property to be sure that the assessment information is up to date and that the property has investment potential. You want to make ensure that the property of interest is worth considerably more than the amount due in back taxes. Remember that you will probably have to pay the property taxes on this property during the redemption period (unless of course the previous owners finds a way to redeem it) before you can foreclose on it and get title/deed.

This raises the second area that investors typically underestimates when they get started in tax lien investing – how much money is requiredc to invest in tax lien certificates. Many investors want to get started with less than $250.00 to invest. Nice try, but this is really not enough. You might not need as much money for investing in tax liens as you do for tax deeds, but you will most likely need at least $2K to get started. Remeber, that even if you are able to purchase a lien for less than $250, you still have to pay the taxes on that property until the lien redemption period is over. If you don’t pay these taxes the property could end up in next years tax sale and another investor can purchase that lien.

Investing in Tax liens is not like buying a bank CD or U.S. savings bond. Any money you put in to buying a tax lien certificate becomes trapped, you cannot take your money out and you do not get any interest payments until the property owner decides to redeem the lien. If the property owner does not pay up on the back taxes and redeem the property you have to wait until the redemption period is over, and then go through the foreclosure process, or deed application process, before you get the property in your name.

If investing in tax lien certificates is something you really want to do, it is recommended that you have at least $2000 to start out with.  Make sure you will not need that $2K for any of your expenses (or you may end up borrowing money somewhere). You also need to plan on at least a few hours on conducting due diligence and attending the tax sales.  If all you have is $2000 you will probably be going to only one or two sales each year and thus only need to invest a few hours of your time every six months. If you really want to get in to tax lien investing aggressively you should have $5K to $10K, and at least 10 hours a week to spend on meeting your goals. With $5K to $10K to invest you can go to more sales and buy a few liens each year instead of just one or two.

The more time and money you invest – the greater your return will be.

P.S. Here is the Best Course for Investing In Tax Lien Certificates And Tax Deeds. Audios, Manual, and Resources. Click Here!

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Tax liens and deeds attract investors with the promise of excellent returns and extremely low risk.  They are secure, government-backed investments with property held as collateral.  Liens and deeds are each is auctioned off by the government when property owners fail to pay property taxes.

Lien investors act as debt holders and seek favorable interest rates, while deed investors make their money on the equity split between the deed price and the property value.   Most states offer either liens or deeds, but a few states hold attractions for each type of investor.

For a complete list of which states offer liens, deeds or both go to http://taxesandliens.com/state_tax_liens_&_deeds.php

Investors that go for tax deeds have the security of knowing they will either receive an annual return on investment of up to 20 percent (or more) or receive the entire property for what is likely significantly less than market value.

Most states allow delinquent property owners a right of redemption period (most commonly one-year) during which they can redeem the property by paying off their outstanding debt. If this occurs, the tax deed operates much like a tax lien, with the exception that the deed holder must issue a quit claim deed to transfer title back to the property owner.

P.S. Here is the Best Course for Investing In Tax Lien Certificates And Tax Deeds. Audios, Manual, and Resources. Click Here!

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