Hedge Funds and Tax Liens: The Future Correlation

Investors today are facing the toughest economy in decades and, as a result, low returns on hedge funds. So, how is one supposed to make the returns of yesterday in today's economy? What will be the next big source of investment income? These are the questions that top practitioners are asking. However, the answer may be right under their noses.

Since one hundred-fifty years ago, this country's counties and municipalities have been in the business of selling tax liens, which provide high yields for interested, knowledgeable investors. This type investment fits very well with the multi-strategy hedge funds, as well as those focused on the credit and real estate markets.

Understanding the Process:

However, before investors can make the plunge into this slightly unique market, they must understand the concepts behind it. One of those is the tax lien receivable, which is simply the right to collect taxes on a property. The reason that this term is so important to this market is because once a home owner falls into delinquency with property taxes, after some time, the bank has the right to place a lien on the property and sell that lien. The buyer is then able to collect back taxes from the property owner.

Because so much of a government's ability to allocate funds depends on the collection of property taxes, the failure to pay by individuals is very harmful. Thus, governments must look for quick solutions to alleviate the lost income. Otherwise, they must make cuts to their spending or raise property taxes for those who do continually meet their obligations. So, it is no surprise that many governments take advantage of the opportunity to sell the debt, which carries a collateral of the property itself.

So, why is this "a good buy" for the investor? As always, the answer is the interest earnings. As the property owner pays off the back debt, he or she must also pay a penalty in the form of interest. That interest can range from ten up to fifty percent. That spells tremendous gain for the holder of the lien. Even if the property owner fails to pay, in most cases, after a given amount of time the lien holder can foreclose on the house and arrange a sale. Bought at the right price, this too can account for tremendous income for the investor.

The Downfall:

At this point, the tax lien market suffers one major drawback. That is the lack of a secondary market or a uniform process for the resale of outstanding liens. For now liens are sold only once and the buyer assumes responsibility for collecting the debt due or following through with the foreclosure process. However, if a secondary market was developed, this could become a true source of investment and more would consider it as a type of hedge fund. They could, should they do it correctly, buy low and sell high and reap the rewards more quickly without having to bother with the mess of collecting the taxes due.

This is not to say that they do not offer a high return opportunity as is, but it is to say that they are currently not ideal for hedge fund type investment.

Risk Versus Reward:

Regardless of whether or not they work as a hedge fund at the moment, tax lien investors speak highly of this type of investment. One that invests in this market can expect an average of about ten percent gain on the outlay and the average lien purchase will see a fifty percent repayment in the first year. Not risk free, in that there is not a definite maturity date and foreclosure can be a long undertaking, these are still considered a favorable source of investment for many looking for lower risk and moderate yields.

Who Should Make the Investment?

Despite what was said above, included in the list of those that typically seek these types of investments - such as corporations and regional lien pools - are hedge funds and private equity firms. They are ideal for those not seeking easy liquidity and those that are properly backed with a knowledgeable legal team.

 Yes, you can still make a fortune in Real Estate with this Ultimate Real Estate system. >>> http://bit.ly/1ukjzFZ

Brent Crouch is the owner of Tax Lien Properties.net. He has dedicated this site to providing a free state tax lien list.

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Tax Lien Certificate Sales - Your Best Source of Wholesale Buyers!

 
It's a little known fact that bidders at tax lien certificate sales are one of the best sources of wholesale buyers for your properties. And, you can get lists of these bidders from just about anywhere in the country, going back several years.

Why are the bidders at tax lien certificate sales excellent wholesale buyers?

1. They are likely to have cash available. Tax lien certificate sales require all cash upfront, and serious players invest hundreds of thousands of dollars at each sale. In many cases you can also request a list of what each bidder purchased at a given sale. This will help you identify the "players".
2. They are willing to gamble on properties they haven't even been able to inspect. As you may know, you cannot inspect the interior of any properties that are on tax lien certificate sales lists. If you make one of these bidders a wholesale buyer, they will now get to inspect your properties.
3. You will be able to show them how working with you is an excellent opportunity. You will be able to offer them properties that they can inspect, that they can obtain immediately, and that will not need a quiet title action. There ordinarily will be no legal action required either.

Now, don't forget that bidders at tax lien certificate sales are after a bargain, or they wouldn't be bidding at the sale in the first place. So don't waste their time with deals that aren't a bargain to them or you will quickly lose their attention. However, if you're worried about proceeding with dealmaking because you don't have cash to close, you will now be able to pass on your deals to these bidders and make a small wholesaling profit while providing the bidders an excellent deal.

So, how do you get lists of the bidders at past tax lien certificate sales? Simply make a public records request to the county for their past bidder lists.

You see, almost all counties require bidders at tax lien certificate sales to fill out an extensive registration form at the beginning of the sale, because hundreds of thousands, or even millions of dollars are changing hands at the sale. The county needs to know who each bidder is so they can properly assign the lien to that bidder and receive payment.

Usually, to get an auction paddle to bid, one must sign up on the master list. This list is retained indefinitely by the county and can be requested by the public as part of a public records request.

The list always contains, at minimum, the full name and address of the bidder. It also frequently contains phone numbers and other contact information.

Since you can make most public records requests by mail or email, you can now establish your wholesale buyer lists in any area of the country before you start working there, by filling it with bidders from past tax lien certificate sales.

Once you make contact with the bidders, make sure to explain the benefits of working with you, versus the investments they're currently making at tax lien certificate sales:

1. No waiting, bidding, or legal work.
2. You'll pass on only great deals to them
3. No quiet title actions needed (this is a legal action required for almost all tax lien properties)
4. A chance to acquire properties nobody else has access to.

So make your list of tax lien certificate auction bidders first, and then get out there and get some properties under contract.

The best source of properties to get under contract, incidentally, is properties that have already gone through the tax lien certificate sale and are about to be lost! Contact those owners who are about to lose their property to the sale and get them under contract, and flip to the bidders at the sale!
 Yes, you can still make a fortune in Real Estate with this Ultimate Real Estate system. >>> http://bit.ly/1ukjzFZ

I'll show you exactly how it's done in my free 5-day email course, "Loophole to Tax Lien Certificate Sales", available at http://www.taxsale.net.
When you register you'll also get my free report, "Underground Tax Sale Strategies" by immediate download!

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Tax Lien Certificates As A Real Estate Investment

It is actually a certificate of the purchase which you get at the tax sale. This certificate documents your ownership in the tax lien. The powerful rights which come with the tax lien certificate makes it an attractive purchase.

The great potential for profits

Being a prudent and professional investor, you can reap immense profits of investing in tax certificate. If you work with a proper and sound strategy sticking to the basics, you can reap huge profits. As you just make a very small investment of the market value of the property, you will surely earn good profits on this transaction.

If anyhow the circumstances go on the wrong side, you can secure the complete rights of the real estate by just foreclosing the lien certificate. Overall investment in the lien is very safe.

Tension free investment

Many people who invest take it negatively that they are not provided with the right to real estate when they make investment in the lien certificate. But now if I depict you a real picture, in fact not having the property ownership works to your favor. As you are not bestowed the ownership rights to the real estate by buying the tax lien certificate, you also get complete freedom from the landowners liability. Nor is their any need to think about the repair of the invested property. Just keep in mind the ever growing lawsuits against the real estate owners and you would begin appreciating the advantage of this mechanism.

Securing the ownership of the property

During the property foreclosure, you will get the property ownership and rest of the subordinate liens and debts concerning the property will be cleared.

Securing a good passive revenue

When you make investment in tax lien certificates, you must not worry on anything and must sit back and count the benefits. Others people will do all the necessary work for you! Like you may not need to do enforcement of the purchased lien till the foreclosure as county will do the same for you. In many states the process of foreclosure is also handled by the county.

Buy the tax liens of later years

If can work in a smarter way, you can go in for the purchase of the later years tax liens devoid of any competition. If some delinquent owners of property default on the coming year's taxes, you need not participate in any action to buy those tax liens as you can purchase them privately.

Thus, when we talk of real estate investment in the tax lien certificates, the final result for the investors is always immensely profitable irrespective of the outcome.
 Yes, you can still make a fortune in Real Estate with this Ultimate Real Estate system. >>> http://bit.ly/1ukjzFZ

Michael has been writing articles online for 10 years. Check out his latest website retirement investing [http://www.beginnerretirementinvesting.com/] which help people find more about flip real estate [http://www.beginnerretirementinvesting.com/how-to-flip-real-estate-properties-well/].

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3 Reasons to Use a Self-Directed IRA to Buy Tax Lien Properties

The IRS Code has allowed investors to form self-directed IRA's since the mid 1970's. With a self-directed IRA, you can direct investments into nontraditional items such as to buy tax lien certificates. Here are three reasons why you can benefit from using a self directed IRA to buy tax lien certificates.

1. Double Your Money Quickly. An IRA can be supercharged when you buy tax lien certificates. If bought in Arizona, a tax lien certificate can earn up to 16% annually in your self-directed IRA. When you buy tax lien investments you generally receive the amount invested plus interest within 12 months. If you continue to reinvest in tax liens year after year at 16%, you can double your money in about 4.4 years. Only a self-directed IRA can preserve this 16% return, as traditional IRA's do not generally invest in tax liens.

2. Your Money Grows Tax Free. By buying tax liens in a self-directed IRA, you can avoid all taxes until the money invested is withdrawn from the IRA, which is usually around age 59 1/2. The money can be invested once, twice or a thousand times and continue to grow tax free, so long as it is not removed from the self-directed IRA.

3. The Flexibility to Buy Time Sensitive Investments. Many self-directed IRA's allow you to carry a check book that is tied to the account. This gives the investor incredible freedom to buy a bargain property at a moments notice. In this arrangement, you can buy tax liens with the stroke of the pen, without a fund manager or other bureaucrat saying no or otherwise trying to slow down the process.

To maximize you returns, learn how to form a self-directed IRA. Make sure you have a check book tied to the IRA to allow you to invest in time sensitive investments such as tax foreclosure properties, or to buy tax lien certificates. By doing this, your investment grows tax free and will double every 4.4 years. You'll pay no commissions or transaction fees. This is the best way to keep your hard earned money and make it grow like wildfire.

Nationsbank and Wachovia have been buying these secret investments for years. These secret investment ideas are now being revealed to you,the little guy so you too can earn 16-50% on your money. With Wall Street and traditional real estate investments rapidly deteriorating, you need to look for a safe place for your hard earned dollar. Tax liens are backed and leveraged by real estate and guaranteed by the government. In most states, they are a first lien on real estate, and when foreclosed, they wipe out all junior liens, including mortgages. This allows you to potentially receive a valuable piece of real estate for pennies on the dollar.
 Yes, you can still make a fortune in Real Estate with this Ultimate Real Estate system. >>> http://bit.ly/1ukjzFZ
Discover more about how to buy tax lien property at my blog, http://www.buytaxlien.net

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Profit Without Risk - Why Now is the Right Time to Invest in Tax Lien Certificates

Unfortunately you cannot trust the media. Just when they say it's time to get into an investment opportunity, that's when it's usually oversold and it's time for the wise investors to get out. Regardless of what the media is saying about the real estate market, the market is down and we've not seen the bottom yet. There are so many people that are defaulting on their homes and because of the backlog that the banks have, we won't see those homes on the market for another two years. So as bad as the market is today, two years from now it will probably be worse.

The stock market is also going through a natural correction, much like it did in 1939. It's all very predictable and connected to cycles in the economy. If you really want to understand these cycles, read The Great Depression Ahead by Harry Dent. Mr. Dent is the renowned economic forecaster who accurately predicted the boom of the early 2000s and the most recent stock market crash, which he claims is not done yet. And to make things even worse the baby boomers are headed for retirement. This is the time when they want to cash in on their investments and take profits. Only problem is there might not be any profits for you if you were heavily invested in the stock market (especially in "safe" mutual funds) or real estate.

However, if you had a large percentage of your investment portfolio in tax lien certificates you'd be sitting pretty right now. That's because tax lien certificates - even though they are tied to real estate, are not affected by the markets. In order to understand this you need to know what a tax lien certificate is.

Municipalities and counties cannot provide the services that they do, such as building roads, schools, paying police officers, fireman, teachers, and elected officials, without collecting property taxes. If property owners do not pay their taxes they are given hefty penalties and charged high interest rates, but that does not guarantee the townships and counties their money. So some states will allow the local governments - sometimes it's the county and sometimes it's the municipality - to sell the taxes to investors. Investors bid for the right to pay the taxes and receive the interest rates that the county would charge - normally between 8% and 36% depending on the state and the amount of the lien.

A tax lien certificate is a great investment for today's times for quite a few reasons, and I'll outline a few of them for you here:

1. Where else can you get 8, 12, 18, 25, or 36% on your money without the risk of the stock market?

2. Your investment is secured by real estate, which has a value a few times your investment (if you did your research). So even if the real estate market takes a tumble, it's still worth more than your investment.
3. Since you do not have to go through someone else to purchase a tax lien, there are no brokerage fees.
4. Unlike other real estate investments, you don't need a lot of money to start. You can invest as little as $200, or even less in a tax lien.
5. You don't need good credit, you don't have to open a special account, and you don't even need to be a U.S. citizen or live in the U.S.
6. You can invest using your computer from the comfort of your home.
7. You can invest with funds from your Self-directed IRA.
8. Because of the economy there are more tax liens available now than in the past couple of years.
Yes, you can still make a fortune in Real Estate with this Ultimate Real Estate system. >>> http://bit.ly/1ukjzFZ

Joanne Musa, the "Tax Lien Lady," has helped new investors all over the world explode their profits using safe, high yielding, real estate secured tax lien certificates. To receive your FREE Tax Lien Investing Kit, that has helped thousands of investors, just like you learn how to build their own profitable portfolio of tax lien certificates or tax deeds go to http://www.taxlieninvestingkit.com.

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Tax Lien Certificate Investing - A Little Known Investment That Provides Massive Wealth!

Tax Lien Certificates as Investments
Tax lien certificates may be worthwhile investments for individuals who do not possess a great deal of capital to invest. Further the availability of the little known investment opportunity in the way of tax lien certificates has generally flooded the market! So what is a tax lien certificate and how can you benefit by investing in it? To explain further, city governments require taxes in order to provide us much needed services within the community. The services include law enforcement protection, medical care, and educational instruction.
Persons who do not pay their mortgage notes on time become delinquent on their property taxes as well and the taxes are needed in order for local government to stay solvent with respect to community services. This is where you come in as an investor of tax lien certificates. What you do is purchase the individual's delinquent property tax liens. You pay the taxes and the property owner is happy and so are the local officials.
However, why would any investor want someone's tax lien? The reason is because the certificates can allow the investor to realize a fixed rate of interest with a piece of real estate to back it up. In fact the rate of return can be quite substantial so taking someone's tax bill off their hands becomes well worth the investment.
In order to get started with the money-making opportunity you will first need to thoroughly educate yourself as to what it is you are doing. With regard to this, a link is offered within the author's resource box. However, that said, the place to begin the process outside of educating yourself as much as possible is the information gathering phase. What you'll want to do in order to begin the exciting money-making endeavor is to contact your County's Treasurer's Office. Ask the following questions:
1. When will your county conduct your next tax sale?
2. Where is the location of the sale?
3. Where can I attain a list of property liens?
4. Where may I attain requirements/regulations of the sale?
5. What is the interest rate respective of the tax lien sale?
6. Does the county have any tax lien certificates that have not been sold from the previous tax sale. If they say yes then ask to see a list. If the answer is no then ask what department maintains the list.
The list of certificates can be massive therefore the investment potential is terrific. Again in order to find out more about this little known money-making opportunity that does not require much capital to get started click on the following link provided within the author's resource box.
Yes, you can still make a fortune in Real Estate with this Ultimate Real Estate system. >>> http://bit.ly/1ukjzFZ

Meredith Banks is a favored financial columnist and author within many financial circles. In order to find out more about tax lien certificate investing, click on the following link to attain some relatively inexpensive education. This is probably one of the least known forms of investing and anyone, anywhere and within any age group: young to older may certainly take advantage of it. The link follows:
http://www.webspawner.com/users/meredithbanks/

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Where to Find Tax Lien Auctions

There are times when a property owner is unable to pay the obligation in property tax. When this happen, a property owner becomes a delinquent taxpayer and a governing authority is in charge of collecting the taxes. However, if the authority is not able to collect the required property taxes, they will opt to take the final step to collect the taxes. The public auction is the final step that will take the delinquent properties to be sold. Auction is an auction ordered by the court depending on the nature of sales in the form of tax lien certificates or tax deed sales. Auction in the form of tax lien certificate entails selling of certificates to assert the total sum of taxes as well as the administrative interests and charges.

The required property tax will be achieved through a auction and the delinquent properties are offered in the amount due for the taxes, interests and fees. Tax lien auction is an open sale that is why participants may tender their bids over and under the amount required for the tax of delinquent properties. The drawback is that the buyer will not be able to recover or refund the overbid.

Purchasing a tax lien certificate to pay against the required property taxes incurred by the delinquent taxpayer.

However, the delinquent taxpayer along with the interest charges will pay the amount back to you that are about 16-18%. This kind of auction allows the buyer the possibility to acquire the property in case of fail to repay by the delinquent taxpayer. In addition, the buyer can also obtain higher percentage of interest when repayment is made.

A referee appointed by the court conducts the tax lien auction. As the auction starts the referee announces the terms of sale and the required amount of bidder's deposit. Just like any procurement bidding process, the prospective buyer or bidder is required to pay 10 percent of the bid amount in form of certified check payable to the referee. The delinquent properties sold in a auction are sold where is and as is. This means that a bidder has no right to investigate the property prior to the auction schedule as well as inspect the interior of the property. Although the property is deemed foreclosure, it is not allowed to enter the property and do some inspection. This may seem that your bid is in uncertainty because whatever the condition of the property you are not allowed to investigate and inspect.

There are many listings offered by different websites that allows the prohibition of keying the data for the buyer or bidder. This will also let the buyer to choose the right lists that qualifies to the criteria.
Yes, you can still make a fortune in Real Estate with this Ultimate Real Estate system. >>> http://bit.ly/1ukjzFZ

Do you need complete government listings for sales of liens, Tax lien auction, government tax liens, government tax sale properties and make profit from tax sales? Log on to http://www.taxsalelists.com and get all the useful information.

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