Profit from Selling Your Tax Lien Certificates

Recently did my first tax lien assignment. I "assigned" or sold one of my tax lien certificates to another investor. This was a tax lien that I though I was going to lose money on. Why was I especially the investors that see repeatedly at tax sales and have more experience than I doworried about losing money on this tax lien? Let's just say that I purchased this tax lien certificate early in my tax lien investing career and did not do the proper due diligence. I had made three critical mistakes when I purchased this lien and afterward. My first error was in purchasing a tax lien certificate on a property that I did not look at myself. I relied on the word of another tax lien investor, someone who was bidding for a large company and is actually my competition. My second mistake, since this was a vacant lot, was not checking the zoning. The lot turned out to be undersized thus unbuildable. My third mistake was in paying the subsequent taxes for almost 2 years before I checked the zoning.

By the time I had realized my errors, the redemption period was almost over and it was time to foreclose on the property. I did not want to start foreclosure because I didn't think that there was anything I could do with the property, and did not know if I would be able to sell it. I tried to sell this lien to other investors packaged with a couple of good liens, but no one was interested. So how did I find a buyer for this tax lien and make over 40% on my investment?

 

When I attend tax sales I like to meet other investors and get to know them, . I happened to find out that one of the investors who I often saw at these sales used to be a builder and he specialized in undersized lots. He knew how to apply and obtain variances on undersized building lots. I told him about the lien that I was looking to assign. I sent him all of the information about my tax lien certificate with a report of what I had paid in subsequent taxes and what the lien would redeem for. He took a look at the lot and determined that it was a good lot that he could do something with. He paid me the redemption amount of the lien and I assigned my tax lien certificate over to him. I gave him the certificate and signed an assignment contract. Since the tax lien certificate and subsequent taxes paid were at 18% per annum interest, and I had held the lien for more than two years, I received over 40% profit on my investment. I was happy to sell him the lien and get the interest and he was happy to have a tax lien certificate that was ready to foreclose on a property that he thought he would eventually be able to get a variance on and build on.

If you have tax lien certificates that are ready to foreclose, and you don't want to go through the trouble of foreclosing on them, you may want to consider assigning them to another investor. Tax liens are hot right now; there is a lot of interest in them and it is usually easy to find a buyer for your lien. Not all states allow the assignment of a tax lien from one investor to another, however, so check with the laws in your state first. Assigning your tax lien certificates to another investor is one way that you can reap the rewards of tax lien investing without ever having to foreclose on a lien or own and manage the property. As always, make sure to do your due diligence and you'll have no problem finding a buyer for your tax lien.

Joanne Musa is a Tax Lien Investing Coach and Consultant who works with investors who want to learn how to buy profitable tax lien certificates and tax deeds. She is the president of Tax Lien Consulting LLC, a consulting firm for tax lien and tax deed investors and the creator of Tax Lien Investing Secrets II: The Complete Course to Investing In Tax Lien Certificates and Tax Deeds available at www.taxlienlady.com

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. Matt Larson reveals his secrets.

                                                 

You can begin creating your lucrative tax lien portfolio today and start saving for your future. If you'd like to learn more about Tax Lien Certificates & Tax Deed buying and investing strategies I have a free video course available at,
http://bit.ly/14x4th9

What is Premium for Tax Lien Certificates?

Premium is an amount over and above the tax lien certificate amount that the investor will pay to the municipality to acquire the lien. When premium is paid for a lien, it is not the lowest interest rate that is bid that wins the lien, but rather the highest premium. Premium is not bid in all states that sell liens. In some states the interest rate is bid down and the lien is sold to the investor who bids the lowest percent interest. In other states the interest rate is kept constant while premium is bid for the lien, thus lowering your return on the lien (since in most states no interest is paid on premium).

Every state has its own rules regarding bidding and whether or not premium is bid. New Jersey is unusual in that the interest rate is bid down and once the interest is bid down to 0%, premium is then bid. This means that the investor is getting no interest on the certificate amount or the premium, significantly lowering the returns on this investment. The only interest made in this case is the interest paid on the subsequent taxes, which in New Jersey is 18% for lien amounts over $1500.00.

In New Jersey the municipality holds premiums and if the lien is not redeemed within a 5-year period, that money is not returned to the investor. Of course the investor can start foreclosure proceedings after 2 years, but if the property is foreclosed on, the investor does not get his premium back. He can get the property, but the premium will be forfeited and considered part of the cost of the property. Rules about when and if premium is paid back to the investor and whether or not interest is paid on premium bid is different for every state.

Why does this happen?
At almost every tax lien sale that I attend, there is a local investor, new to tax lien investing, who is confused and wants to know what is going on. Why would anyone want to buy a lien, pay more than the lien amount and not get any interest on their initial investment? They assume that investors do this in hope of being able to foreclose on the property.

 

The real reason that tax lien investors pay premium is that once you are the lien holder, you then have the ability to pay the subsequent taxes. In New Jersey you can earn from 8-18% on the subsequent taxes depending on how much is owed. For amounts owed over $1500.00 the interest rate is 18%, for anything under $1500.00, the interest rate is 8%. Also as long as the lien is redeemed after the certificate is issued, even though you didn't get the certificate amount at an interest rate, there is an additional redemption penalty that is paid to the lien holder. The redemption penalty in New Jersey is 2% for certificate amounts from $200.00 - $4,999.99, 4% for certificate amounts from $5,000.00 - 9,999.99, and 6% for certificate amounts of $10,000.00 or more. The homeowner must pay this penalty when he/she redeems the lien and it is only calculated on the certificate amount, not on any subsequent taxes that the lien-holder has paid. Each state also has different penalties that may be applied in addition to the interest amount on the lien.

In addition to all of this, some municipalities in New Jersey have an additional year-end penalty for overdue taxes in excess of $10,000. A penalty of 6% is added for amounts due over $10,000.00 at the end of the year. This penalty only applies to the subsequent taxes. So, if you are a lien holder and you've paid over 10,000.00 in subsequent taxes, at the end of the year the homeowner will have to pay you back at 24%, should he redeem the lien, plus you will get the redemption penalty on the certificate amount of your lien.

A Simplified Example
Let's look at a somewhat simplified example: Let's say you go to a sale and purchase and a $5,000 lien on a property with annual taxes of $10,000.00 (not unusual in some municipalities in New Jersey) and you bid $10,000 premium. You pay the municipality $15,000.00 (lien amount + premium) on the day of the sale. The sale happens to be held in December 1st and last year's delinquent taxes are being sold. On December 11th you pay the current year's taxes of $10,000.00. And let's assume that the lien is redeemed December 11th of the following year and that you didn't pay any more of the subsequent taxes.

In order to redeem the lien, the property owner must pay the certificate amount plus the redemption penalty and the subsequent tax amount at 24%. That's $5,000(lien amount) + $200(4% redemption penalty) + $10,000.00(subsequent taxes) + $2400.00(24% of subs) = $17,600. The municipality has to give you back your premium of $10,000.00. You collect $27,600.00. Your initial investment was 25,000.00. You have a total profit of $2,600.00 for a yield of 10.4%. This is a simplified example. Your actual yield will be a little higher if you continue to pay the subsequent taxes until the lien is redeemed.

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Joanne Musa is a Tax Lien Investing Coach and Consultant who works with investors who want to learn how to buy profitable tax lien certificates and tax deeds. She is the president of Tax Lien Consulting LLC, a consulting firm for tax lien investors.

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Tax Sales Secrets How to Buy Tax Liens and Tax Deeds

Beyond The Basics For Tax Lien Investors: What You Need To Know And When You Need It

We all suffer from "paralysis of analysis" at one time or another, where we are reluctant to go forward with something until we know all there is to know about it. The problem is, with most things that are worth pursuing, we'll never know all there is to know about it. And the best way to learn what we need to know is to get started doing it. Tax Lien Investing is no different. Many would be investors never get started. Oh, they buy all the programs and ask a lot of questions, but they never feel they know enough about it to start. They get paralyzed by the fear of the unknown.
But tax lien investing is not rocket science and you don't need a college degree, or even a high school diploma to make money at tax lien investing. So how do you know that you know enough to get started? Or, if you've already started to invest in tax lien certificates, how do you learn what it is you need to know to protect your investment? From what I've seen in the industry, and from the questions that I've gotten from subscribers to my web site, I believe that there are three different stages of knowledge or learning about tax lien investing that the investor needs. But you don't have to go through each of these learning stages before you know enough to get started.
Stage 1: Tax Lien Investing Basics
This is the initial stage for the new investor, where you'll gain the information about what a tax lien is, and how the process works. You don't need a lot of specific information at this stage, but you do need to know if this is something that you can do, so you need general knowledge and an overview of how you make money with tax lien investing. You don't need to spend hundreds of dollars at this point for coaching or on a detailed course, when all you need to know are the basics, so that you can determine if this is something for you.
At this stage, here are the things that you'll want to find out:
* What a tax lien is and why it's good investment
* How tax lien investing can help you meet your financial goals
* The difference between a tax lien, a tax deed, and a redeemable tax deed
* Where is the best place for you to invest
* How to get the tax sale information
Once you get through stage one, you should know what your goals are, where you want to invest, and how to get the tax sale information. Now you're ready to get started, but you will need a little more education to make sure that you're successful. Now it's time to go on to the next stage of learning before you actually buy your first lien or deed. You've done the preparation and now it's time to get serious.

 
Stage 2: Specific Information on Your State
At this stage you'll need to learn the specifics about how things work in the state or states where you're going to invest. You'll also need to know how to do your due diligence so that you buy profitable liens. Here's where you can use some expert help or education. You don't necessarily need a mentor or a coach, but you may need a course that covers how things work in your state. Or you may want to do an online tutorial, or class. At the very least you'll want to talk to the county treasurer or tax collector and find out about the rules of the tax sale.
Here is a list of the things that you need to know before you actually start purchasing liens or deeds:
* The rules of the tax sale
* Bidding procedures
* Finding the assessment data on the tax sale properties
* How to determine what to bid
* How to register for the tax sale
* Where to find tools to help you do due diligence on tax sale properties
* When and how you need to pay for successful bids
* What you need to do immediately after the tax sale to protect your investment
Once you know these things, you're ready to purchase tax liens or deeds. You don't have to know how to foreclose on a lien or how to track your liens to start purchasing them. That comes in the next stage.
Stage 3: Making and Keeping Your Profit
OK, by this stage you've purchased your first liens or deeds and you've done your homework to make sure that you've avoided any problems. Now it's time for you to learn the fine points of investing in tax liens or tax deeds. Now you'll need to know things like:
* How to clear the title on your deed
* What is the foreclosure process if the lien does not redeem
* What is the redemption process
* How do you pay the subsequent taxes
* When do you need to furnish affidavits for expenses
* How to track your liens
There may also be other things that you need to learn or do that are specific to the state or county that you are investing in. It's up to you to find out how to protect your investment, maximize your return and track your profit. At this point, depending on the size of your portfolio, you will want to devote more time to managing your tax lien portfolio. You may also want to look into getting a software program to help you manage your liens, hiring someone to do the work for you, or having a mentor that you can go to when you have questions or need to know what to do next.
As you can see, there are things you need to know to be successful at tax investing, but you don't need to know it all it to take action and get started. The trick is in knowing what you need to know when you need it, and having someone that you can go to for answers when you need help. You don't need to know how to foreclose on a tax lien before you purchase one, but you do need to know how to get the tax sale information and how to do your due diligence so that you purchase a profitable lien. And you don't need to spend hundreds of dollars on a comprehensive course on tax lien investing before you even know how the process works and what it is. Save your money and get the education or help that you need at the right time - when or just before you need it!

Joanne Musa works with people who want to build an extremely profitable portfolio of tax lien certificates or tax deeds FAST. She is the author of Tax Lien Investing Secrets II, a complete system for learning how to invest in tax lien certificates and tax deeds for maximum profit, and founder of Tax Lien Consulting LLC, a consulting company specializing in tax lien investing coaching and education.To find out more about the steps involved in building your profitable tax lien or tax deed portfolio, go to http://www.taxlienlady.com/ProfitablePortfolio.html.http://tiny.cc/lady

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Tax Lien & Deed Property Research

                                                  

 You can begin creating your lucrative tax lien portfolio today and start saving for your future. If you'd like to learn more about Tax Lien Certificates & Tax Deed buying and investing strategies I have a free video course available at,
http://bit.ly/14x4th9

Tax Lien Investing: Investing Online and by Mail

One of the questions that I frequently get from visitors to my web site, is "Can I invest in tax lien certificates online or through the mail?" Many people want to invest in tax lien certificates but don't have the time freedom to physically attend the tax sales, so they want to do it online or by mail. A couple of tax lien states do hold online tax sales, and a few will allow you to mail in your bid. I don't, however, recommend investing in tax lien certificates by mail or online unless you can look at the properties or have someone else look at them for you.

First let's talk about online tax sales. As tax lien investing has become more popular with the average person (it's not just the secret of the wealthy anymore), it's also become more competitive. Over the last three or four years, in states where the interest rate is bid down, the bidding has been going lower and lower - as low at .25% in some sates. And in states where the amount of the lien is bid up prices have been bid higher and higher. Online auctions increase the competition even more. Now instead of bidding against every interested party who can come to the sale, you're competing with every interested party with a computer.

Three things happen at these online tax sales. First of all a lot more bidders show up because all they have to do is get to their computer to register for the sale. Secondly, more money - or lower interest rates are bid for tax lien certificates because there are an increased amount of bidders. And thirdly more properties are sold at these sales. You see, at most tax sales there are "left-over" liens that no one bids on that go to the county.

 A lot of these properties are junk properties. They are really not worth anything and that's why the owner stopped paying the taxes. Any bidders that have done their due diligence will know this and will not bid on these properties. But when sales are held online these properties will typically be sold. Don't you be one of those online bidders who buys a tax lien on a worthless piece of property!

Would you purchase real estate that you didn't look at first? Even though you are not purchasing the property when you buy a tax lien (you are only paying the past due taxes and penalties and putting a lien on the property), you still need to make sure that the property is valuable. There is always the chance that the lien will not be redeemed and that you will wind up with the property. And if you do have to foreclose on the property, you want it to be worth much more than you have invested in it. Your investment isn't only the amount that you paid at the sale, but all of the subsequent taxes that you paid, any legal fees and foreclosure costs, and any costs that you incur to fix up the property before you sell it.

Here is something else to consider if you decide to go ahead and tax lien certificates online anyway. You will pay more money for tax lien certificates online than you would at a regular tax sale. First of all you will have to have a hefty deposit just to register for the sale. If you do not purchase any liens your deposit will be refunded. If you do make a purchase it money will be deducted from your deposit. Even if you make a purchase by mistake, the money will be deducted and it will not be returned. If you do not complete the transaction you could be banned from any future sales. In addition to that you will have to pay the online auction company a commission, which could be as high as 10% of the purchase price of the lien(s) that you buy.

What about purchasing tax lien certificates through the mail? Many states do allow for purchasing of tax lien certificates through the mail. Most states allow this for their "left-over" liens and a couple of states will even allow mailed in bids for their tax sales. Buying tax lien certificates through the mail does not have all the problems that I described for online tax sales, especially if you are able to do your due diligence on the properties before placing your bid. You are, however, at a disadvantage when you mail in your bid for a tax sale. I suggest that you find out what the procedure is at the sale. If your bid is read out loud at the sale and those present at the sale have the opportunity to out bid you, than you are at a disadvantage. It is the investors who are present at the sale that have the advantage over you.

There are opportunities in some states that sell leftover liens (sometimes these are referred to as "over-the-counter" liens or "assignment" liens) that are available for purchase through the mail. Be very careful though to do your due diligence on these properties before you placing a bid. Very often, as I mentioned earlier, there is a reason that these liens were not purchased by other investors. If no-body else wanted it maybe there is something wrong with it! Check the property out before you buy. With tax lien investing, there are no refunds!

 You can begin creating your lucrative tax lien portfolio today and start saving for
your future. If you'd like to learn more about Tax Lien Certificates & Tax Deed buying and
investing strategies I have a free video course available at,
http://bit.ly/14x4th9

Joanne Musa is a Tax Lien Investing Coach and Consultant who works with investors who want to learn how to buy profitable tax lien certificates and tax deeds. She is the president of Tax Lien Consulting LLC, a consulting firm for tax lien investors. She is the author of the e-books: Tax Lien Investing Secrets and Tax Lien Lady's State Guide to Tax Lien and Tax Deed Investing, available at http://www.taxlienconsulting.com

For more tips on investing in tax lien certificates send an e-mail to MoreTips@taxlienconsulting.com

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Making Money in Real Estate - Tax Lien Investing Tips and Risks

In my last article I gave a brief introduction to what tax liens are and talked about how you can earn huge returns by investing tax lien certificates and tax deed sales. But it's one thing to know that investing in tax liens can make you money, and it's a completely other thing to actually invest in them. To help get you started I've put together a general guideline of tips to follow and risks to be aware of. Hopefully these help you on your road to becoming immensely wealthy through real estate investing.

Tax Lien Investing Tips

Buy liens at smaller counties. There will be less competition as most institutional bidders will not attend these. Institutional bidders are individuals who are bidding for large companies which invest their money in tax lien certificates. It is not worth it for them to attend tax lien sales at smaller counties as there will be less liens to go around, and the liens themselves will also most likely be smaller.

Buy smaller liens. You will probably get a higher interest rate due to less competition.

Stay during the off times of a sale. Lunch breaks, end of the day, and the last day of a sale are prime examples. Catch people asleep and snag the good liens right out from under their noses. Also, at the end of the day it is important to go up to the clerk and ask if there are any more liens for sale. It happens that investors will buy too many liens and not be able to afford to purchase all of them at the end of the day. The county will not re-auction these and 9 times out of 10 will sell them to you over the counter at the maximum percentage interest.

Set max bid amounts. Be loud and assertive. Don't hesitate. Wait till the bidding has settled and bidders have dropped out, then jump in with a decent sized increase. Know your limits.
Buy from obvious commercial properties, using recognizable company names. These liens will almost definitely redeem.
 

Tax Lien Investing Risks

There are also some negatives associated with tax lien investing. As with everything in life, tax lien investing is not without its dangers. It's extremely important to come to a tax lien auction well prepared and aware of the pitfalls that many people succumb to.

Inaccessible Funds Your money is NOT liquid. This isn't like a savings account or even stocks or mutual funds that you can sell at will. Your money is tied up until the tax lien is paid off. This can be a week, a month, a year, or possibly never if the owner doesn't redeem. Do NOT use money you need to pay bills to invest in tax liens!

When a property owner doesn't pay off their lien, this doesn't mean you are SOL, you just may have to do a little more legwork to recoup your investment. As the lien holder it may now be your responsibility to foreclose on the lien. Or in certain states you may be lucky enough to be the new property owner!

Time and Travel Depending on where you are attending lien auctions you may have to take into account travel time, lodging, food, gas, etc...It may not seem like a lot, but it adds up. An easy way to avoid this is to only buy liens in your county or the immediate area. This will save on expenses, but will also limit the amount of liens you can purchase each year.

Losing Your Investment There are instances that can occur that may result in you losing your investment. Some can be avoided easily, and others aren't so easy to avoid. For instance, what if the IRS has a lien on the property? What if the property owner goes bankrupt? These are both real possibilities and risks, but in all honesty, are extremely unlikely. A bigger risk in my opinion is investing in a worthless property. The property may be an odd size and can't be built on. Or it might be a drainage ditch. Or it might be completely run down. If you invest in a property that doesn't redeem, and then subsequently cannot be sold, you're now stuck with a worthless property and have lost your investment.

These last examples can be avoided in two ways:

Buy more expensive liens. Expensive liens are usually nicer homes and businesses which are more likely to be redeemed.

Prepare for the auction. These scenarios can easily be avoided through due diligence. Which is basically a way of saying, "Do your homework."

Conclusion

Investing in tax liens can be a great way to earn extremely high percentage yields from real estate investing, but you must come prepared. Do research on the properties being auctioned before the day of the sale. Become familiar with the auction process and your county's specific bidding systems used. The more prepared you are coming in to the auction, the better able you'll be to bid efficiently and effectively.

For more information on tax lien investing visit .Tax Lien Investing

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Basics Of Investing In Tax Lien Certificates

                                                    
If you are interested and want to learn more about tax liens, then follow this link and you will find all the answers. 7 Steps to building your profitable Tax Lien Portfolio.

Take the first step! This is the best resource to learn the secrets of tax lien  investing.
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The Truth About Tax Lien Investing

                                                      
If you are interested and want to learn more about tax liens, then follow this link and you will find all the answers. 7 Steps to building your profitable Tax Lien Portfolio.

Take the first step! This is the best resource to learn the secrets of tax lien  investing.
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Quintessential Factors to Consider With Tax Liens for Sale

Business has always been about taking a risk. That's what many successful business owners keep on reminding the society. A capital is required to start a business and this alone can be burdensome to many aspiring entrepreneurs. Although risky, there are strategies available to lessen the risk that comes with it.

Specifying on a real estate business, a number of factors have to be considered. Otherwise, those risks would increase and you will suffer big in the end. Even successful business owners who have invested on tax liens have to be strategic and smart if they want to maintain the wealth they have acquired from their businesses.

Hence, before you attempt to participate in an auction or simply buy those important documents, you might want to ask yourself these questions, such are: 

What is the reason behind this?

Why do you want to get involved with tax liens for sale? What's your ultimate purpose for starting this business? Is it just because of a simple hobby? Or perhaps you want to find a way to attain the freedom of time and money, not just for you but for your family as well?

Not all tax lien investors focus on this kind of business. There are those who still have other jobs whilst finding a way to invest on a tax lien from a valuable property. You might want to do this approach as well especially if you're still starting to invest on a property.

The bottom line of knowing your purpose is to help you determine the right strategies that you need to succeed.

Do you know the exact location of the property?

Although many investors say that tax deeds are more important than tax liens, it doesn't mean that you can take tax lien investments for granted. It's extremely important to still know where that property is located.

Nowadays, investing on multiple tax liens is very common. Nevertheless, this is not recommended for beginners. If you are unsure if your investment will succeed, then invest on one lien first.

Locate the property, assess it, plan, implement actions and evaluate the outcome. If you're satisfied with the results, that's the only time you can start thinking about investing on other tax lien certificates.

Are you fully aware of the process when buying tax lien certificates?

This is another important question you need to ask yourself. Unfortunately, many investors take this question lightly and become impetuous with their purchase. In the long run, they lose everything.

Here is a simple admonition when pertaining to real estate investments -- each county has its own system, rules and regulation when purchasing tax lien certificates. Therefore, it is the responsibility of the investor to be acquainted with the system of the county to where he wants to buy a lien certificate.

There are many more questions you need to know if you're determined to pursue this business. Know the details of the property. Most importantly, you need to make sure that your investments are properly secured.

Critical thinking is a requisite when it comes to this business. It's amazing to know though that there are successful investors who have created websites to offer assistance on how to make money buying tax liens. For starters, enrolling in a training course that provides this type of coaching is an excellent idea.

If you are interested and want to learn more about tax liens, then follow this link and you will find all the answers. 7 Steps to building your profitable Tax Lien Portfolio.

Take the first step! This is the best resource to learn the secrets of tax deed investing.
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About the Author

Quintessential Factors to Consider With Tax Liens for Sale   by Mitch Carson

in Business    (submitted 2013-08-21)

 

Tax Lien Investing: The Beginner's Guide to Investing In Tax Liens

                                                
If you are interested and want to learn more about tax liens, then follow this link and you will find all the answers. 7 Steps to building your profitable Tax Lien Portfolio.

Take the first step! This is the best resource to learn the secrets of tax deed investing.
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How Can You Get a Faster Tax Lien Redemption?

You can profit faster from tax liens by purchasing a lien that is ready to foreclose. By investing in secondary tax liens you can shorten the time it takes to the tax lien redemption or foreclosure. Here's an example of a tax lien redemption where I got a 49.5% return on my money in only 15 months from the time that I purchased the lien. In reality it only took only 6 months to redeem, but the county lost the original check and had to reissue it and that took some time. In any case it was much faster than if I had purchased the lien at the tax sale myself and then waited the 2 1/2 year redemption period and then started foreclosure. If the original investor had hung onto this lien instead of selling it to me they would have a little more than doubled their original investment, but it would have taken more than 3 years. I bought the secondary lien from an investor (through the agent who did all of the work including the foreclosure) and then initiated foreclosure. The property owner then redeemed the lien and I made 49.5% on my money in a little more than a year!

Here's what the numbers look like:

*My initial investment to purchase the lien from the investor -

original lien amount $2016.06

*my investment - lien amount + 36% to investor (12% per year that the lien was held) + assignment fee = $2776.85

*initial foreclosure fees (unrecoverable fee) = $1250

*my total investment = $4026.85

*redemption amount = $6020.70

*total profit (ROI) = $1993.85 (49.5% of my investment over 15 months, but could have been in only 6 months had the county not lost the check!)

 

The reason that I made out so well on this lien even though I paid the original investor 12% per year (36%) on his money was because this was an Illinois tax lien that was bid at 18% at the sale. In Illinois the bid rate is for 6 months - not one year, so it actually gets redeemed at a rate of 36% per year. But it gets even better than that, because in Illinois it is not an annualized interest rate that is paid to the investor but a penalty. In this case it was an 18% penalty every 6 months. That means that every six months another 18% of the original certificate amount is added to the redemption payment.

In this case I paid the investor 36% on his money to buy the lien from him. But when it redeemed in November of 2013 - roughly 3 years after the original investor had purchased the lien, the penalty paid was a whopping 108% on the original investment! I did pay the initial foreclosure costs but since the foreclosure did not get very far, all of the fees that I paid were "postable" - which means they were charged to the property owner and returned to me with the redemption.

Purchasing secondary tax liens from the state of Illinois is a great way to make double digit returns on your money in a shorter period of time than by purchasing a lien at the tax sale. But there are things to watch out for. Another plus to investing in these liens is that all the work is done for you, including the due diligence.

Armed with these professional tax lien investing strategies, you'll become a formidable foe to even the most experienced competitors.

If you are interested and want to learn more about tax deeds, then follow this link and you will find all the answers. 7 Steps to building your profitable Tax Lien Portfolio.

Take the first step! This is the best resource to learn the secrets of tax deed investing.
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About the Author

There is will more secondary liens next spring. You can find out more about the Tax Lien Ladys Members Area and enroll at http://www.taxlienlady.com/MembershipMain.htm

How Can You Get a Faster Tax Lien Redemption?   by Joanne Musa

in Finance / PersonalFinance    (submitted 2014-09-23)

Strategies for Tax Lien Investing

 Knowledge is Success  

There is unquestionably an art to winning bids at an auction. The accomplished bidder has the right timing and the right knowledge. In the world of tax lien investing, there are veteran investors and then there are quite a few naive rookies. You don't need years and years of experience to bid well and win-you just need to educate yourself. The following outline of tax lien strategies will enable you to outsmart even the most seasoned of investors. 

Slow and Steady Doesn't Win in This Race

Auctioneers are very stingy of their time-a good tax lien property will be history within a few seconds of the opening bid. There is a time limit on these auction and at the slightest hesitation, the auctioneer will grant the lien to the last bidder and proceed blithely on to the next one. Do your research before you arrive at the auction so you'll be able to make quick, confident decisions. A savvy investor can recognize a good deal in a split second. The tempo of an auction can vary, especially between smaller and larger events, so be prepared to observe and pick up on the cadence before you join in. 

Stand Up and Be Heard

Leave any shyness at home when you leave for an auction. Many first-time investors call out bids so timidly that they go unheard. Remember, you are competing for a chance to make serious money. Speak up in a strong and authoritative tone.

Appetite for Success

Depending on the time constraints placed upon the auction, the auctioneer may not take a lunch break. The majority of the other hungry bidders will, though, so if you stick around you'll have your pick of the prime properties with half the competition. An investor familiar with bid up premium and bid down interest techniques will be able to manipulate these scenarios into some very good tax lien deals. 

Another secret: stay until the very end of the auction. Sometimes,if there are quite a few properties left after the posted end time has passed, the auctioneer will grant a time extension. The government would much rather have these properties off their hands. There may be a 10 minute interim between the scheduled end time and the moment the auctioneer announces his decision to continue-and by this time, many of your competitors will have already headed home. In fact, if you are the only investor left standing, the auctioneer will still allow you to name your bid. Auctions don't get much better than that.

Avoid Institutional Investors

Homes are the preferred target for institutional investors. You're wasting your time trying to compete with these guys-they have millions of dollars at their disposal and will accept extremely low interest rates. They can also pay off the bank and skip the whole foreclosure process. If you have to face this kind of competition in your area, pursue the non-residential or non-homestead tax lien properties. To avoid institutional bidders altogether, attend smaller auctions with more modest inventories. 

You Get What You Pay For

Disclaimer: Not all minimally priced liens are worthless. However, if you aren't able to conduct visual and background investigations a property prior to the auction, whether due to time constraints, location, or other reasons, it's wise to bid on homes priced over $500.00 or $600.00. this is considered the safety line between homes that are worthy of investment and homes that are in bad condition. Homes above this range also have a lower foreclosure rate, which means you're more likely to get some easy money back rather than have t take on the risks of selling the home yourself. 

Armed with these professional tax lien investing strategies, you'll become a formidable foe to even the most experienced competitors.

If you are interested and want to learn more about tax deeds, then follow this link and you will find all the answers. 7 Steps to building your profitable Tax Lien Portfolio.

Take the first step! This is the best resource to learn the secrets of tax deed investing.
http://tiny.cc/lady

About the Author

Brent Crouch is the owner of TaxLienProperties.net. He has dedicated this site to providing tax lien property articles and purchasing real estate at pennies on the dollar. http://www.taxlienproperties.net/articles/articles.htm

Strategies for Tax Lien Investing: Knowledge is Success   by Brent Crouch

in Real Estate    (submitted 2008-06-11)

Automating Your Tax Lien Investing

                                                        
If you are interested and want to learn more about tax deeds, then follow this link and you will find all the answers. 7 Steps to buildingyour profitable Tax Lien Portfolio.

Take the first step! This is the best resource to learn the secrets of tax deed investing.
http://tiny.cc/lady

Fundamentals of Tax Lien Bidding

Given that the house owner will be purchasing back the lien from the bidder or investor, the interest charge need to be a single that will give a considerable return of investment. Some state legal guidelines ensure an fascination rate set for the investor.

2. Ownership

This kind of bidding is the least preferable approach. Traders are granted an choice to bid down the percentage of future ownership as they obtain tax lien certificates. This amount of ownership is a factor for the quantity or proportion of the final earnings. Traders ought to see to it that they will get a fair share of the income. The investor will get a particular volume of profit portion and the property proprietor will take the rest of the share.

3. Random Selection

Although bidding down ownership is the least chosen bidding approach, random variety is the most favorite one. The bidders are offered a likelihood to accessibility all attributes for bidding before the sale. Bidders are given figures. A draw will be created for every house and the moment a bidder's range is named, he or she can take or decline the house. The cost of the bid is the delinquent or unpaid tax worth.

4. Straight Bidding

This method is also known as top quality bidding. The winning bidder is the one who bids greatest more than the quantity of the lien. Many states only enable interest to be billed to the sum of the lien and not on the real amount compensated by the bidder or investor.



5. Over The Counter Sale

There are counties that enable the immediate promoting of tax lien deeds or certificates. An investor can go to the nearby tax collection office for this. Nonetheless, the intrigued party really should 1st make study or check out the house just before buy. Most of these properties are the ones that have been not marketed for the duration of auction and they may possibly have setbacks. This can be disadvantageous for the investor. Immediate sale is the least difficult way to procure tax lien attributes.

Here are some FAQ's on Tax Liens. This might assist you greater recognize what they are, why they are issued and how they can be released.

Q: When a tax lien is positioned on a property, how does a person know?

A. You will know that the IRS has an issue with a liability when they deliver an evaluation and want payment immediately. You then have ten days to make a payment. Failure to address that concern will result in the IRS to commence the method of a federal tax lien. You will get, by mail a discover from the IRS that it has been filed.

Q. What impact does a tax lien have on me?

A: As quickly as it is filed all your collectors are notified tremendously affecting your credit score report and credit score score and the IRS has declare to your house previously mentioned any collectors. Now that a lien is being put and all collectors are mindful, it can make it really tough to get any form of credit prolonged. If you pay out the financial debt, you can request that the tax lien be taken out from your credit report.

Q. When a lien is filed, what kind of home does it impact?

A. All existing and any long term house a taxpayer has or will purchase is impacted.


If you are interested and want to learn more about tax deeds, then follow this link and you will find all the answers. 7 Steps to buildingyour profitable Tax Lien Portfolio.

Take the first step! This is the best resource to learn the secrets of tax deed investing.
http://tiny.cc/lady

About the Author

Mr. Greg Norton is 1 of the board of directors for Norton firm, a reknown maker of anti virus programs.

tax lien sales, tax lien, tax lien sales

Fundamentals of Tax Lien Bidding   by Greg Norton

in Entertainment    (submitted 2011-09-05)

Bill Young, Ted Thomas Student on Building Wealth With Liens VS Deeds

                                              

Get your FREE Tax Lien training Vidoes at ---> = http://tiny.cc/lady

Hey! Yeah You! Want to Learn Some Tax Deed Secrets?

 

Tired of someone else being in charge of your time? Want to follow your own schedule, set your own hours? You can be in control of your life and be your own boss! Money gives you freedom... then the choices are yours!

Okay,I gave you motive, now I'll provide some information. I'll admit there is a lot to learn. The key is to set your goal and follow through. Pick your state, then pick your county, then find out the details for their next auction and yes, you have to do a little research. Then, jump in and join the fun. Because I'm telling you, this can be fun.

Here are a few facts to ponder about tax deeds:
There are approximately 1500 tax deed counties. That means there's bound to be one close to you. These are opportunities just waiting to happen... yes even to you.

A tax deed is one of two methods in which the government deals with delinquent property taxes. When homeowners don't pay their property taxes in a tax deed county, the county sells the property deed at a county auction. 

Each county has its own set of bidding and auction rules to follow. A smart investor can learn these rules and bid on properties they are interested in. The starting bid is the back taxes owed on the property. The tax sales can be fun and exciting. You will meet other seasoned bidders and make new friends. The more contacts you make, the more successful you will be.

Some states have a redemption period in which the owner can redeem his or her property even after it is sold at a tax auction. Some states do not. It is important to do your homework before you bid.

Once you have the deed to a property, the decision is all yours~~ you can sell the property, keep it for rental property or just use it for your own enjoyment! Imagine, a vacation home in another state!

If there are properties that no one bids on, no worries. Most counties make them available for sale in an Over the Counter Sale. You can obtain these lists of properties just by talking someone at the county courthouse. The great part about this scenario is the fact that there is no one to bid against you.

I mentioned setting your own hours. Work as much or as little as you want! If you want to live your life by your own rules... well, tax deed investing is for you.

If you are interested and want to learn more about tax deeds, then follow this link and you will find all the answers. 7 Steps to buildingyour profitable Tax Lien Portfolio.

Take the first step! This is the best resource to learn the secrets of tax deed investing.
http://tiny.cc/lady



About the Author

  Dustin Hahn is the top tax liens and deed consultant today that conducts trainings and mentoring to investors who want to learn the facts about real estate tax lien and deed investments. He is the owner of Tax Sales Secrets, the best tax liens and deed investment company. He is the author of Real Estates Best Kept Secret.

  by Sharon Brown

in Real Estate / Property Investment    (submitted 2013-05-20)

Start Investing In Tax Liens NOW!

                                                           
Get your FREE Tax Lien training Vidoes at ---> = http://tiny.cc/lady

Where Is The Best Place For Online Tax Lien Investing?

 

Which Are the Best States For Online Tax Lien Investing?

Most people want to know which states have the highest interest rates and that's where they want to invest. But things are not always what they seem, especially to the inexperienced investor. The states that have the highest statutory interest for tax liens also have the most competition.

A few counties in the state of Iowa for instance, had online tax sales for the first time in 2013. Iowa has the highest interest rate of any of the states that have online tax lien sales - 24% per annum, so you'd think it would be a good place to go for online investing, but that might not be the case. Most of the liens in the online tax sales were bid down to 1%. That's not the interest rate. Investors will get the statutory 24% interest on their lien - if the lien redeems. What was bid down is the percent ownership of the property should the lien not redeem and the investor foreclose. If you bid anything lower than 100% you don't get full ownership of the property should you have the chance to foreclose on it. That may not be enough leverage to get the property owner to pay off the lien. After all, even if you foreclose, you wouldn't be able to take possession of the property or do anything to it without the owner's permission - even if you had a 99% interest in the property!



The next 2 states with the highest interest rate for online tax lien investing are New Jersey and Florida. They both have a statutory rate of 18% per annum, but this rate is bid down at the tax sale. Some of the Municipalities in New Jersey started to have online tax sales in 2012, and a few more joined in for 2012. Not only was the interest rate bid down to 0% for most of the liens sold, but high premiums were paid - and premiums were paid even for small liens, it just didn't seem worth it for the individual investor.

In Florida the interest rate is typically bid down to only.25%. Investors are willing to bid that low because they know there is a minimum 5% penalty they will receive instead of the.25 interest that they bid. They are counting on the liens redeeming quickly, but if their liens go the entire 2 year redemption period before the property owner redeems that 5% penalty comes out to be only a 2.5% annualized return. The penalty is not an annualized interest rate. It is a straight penalty paid on the certificate amount.

So which state is a good state for online tax lien investing? One of the states that I suggested at my last tax lien investing workshop might be better bet for online investing this year is Arizona. It's not likely that you'll get double digit returns investing in any of the states that have online tax sales, so get that out of your head. But it is still possible to get high single digit returns in Arizona on residential properties, and to get double digit returns for liens on vacant land. Also this year many of the Arizona counties that have online tax sales have enacted a "Single Simultaneous Bidding Rule" for 2014, forbidding persons or entities from registering multiple bidding numbers. If you are bidding in the Arizona tax sales this year, you'll have to pay attention to this new law, for not only does it prevent funds and institutional buyers from registering multiple bidder numbers, but it also prevents spouses from bidding at the same tax sale if they file a joint tax return, and it prevents you from registering as an individual and a business entity. This new rule is meant to level the playing field between institutions and individual investors. We'll see if it works!

 Get your FREE Tax Lien training videos here---> http://tiny.cc/guide

in Finance / PersonalFinance    (submitted 2014-02-24)

About the Author

Joanne Musa works with investors who want to reap the rewards of investing in profitable tax lien certificates and tax deeds. Her tax Joanne Musa works with people who want to build an extremely profitable portfolio of tax lien certificates or tax deeds FAST.
You can find out more about how you can invest in tax liens online with the Buying Tax Liens Online home study course at http://www.BuyingTaxLiensOnline.com

Buying Tax Lien Certificates for Beginners #1 Tip

                                                  

  Get your FREE Tax Lien training videos here--->  http://tiny.cc/lady

IRS Tax liens - Risk Examination

 

An examination of every feature that may prevent returns on investment is important for a tax lien investor. There are so many factors which may affect this. The very nature of the deal or some other procedure or even the law may prevent you from making the expected returns on your investment.

The Risk of Failing to Carry Out Research

There is no economic dealing which does not have its accompanying risk. This is the more reason why it is always recommended that an adequate amount on meaningful investigation should be done ahead of venturing into any form of investment. The first risk that you may encounter is the risk of not knowing the current market trends, not knowing what to do or what not to be done. In fact, this is a very serious risk because if care is not taken, your business might not even take off.

We can recall the fact that each state has the autonomy to decide on its own laws in relation to tax liens. This means that there are many rules and regulations that you must acquaint yourself with. Remember that there are equally procedures that you must know. Failure to keep abreast with all this is yet another risk that you are facing.

There is always a need to minimise the risks that you may face and a good way to do this is always to know what obtains in the tax lien market. For example, if you are aware of the laws, the procedures, the rights of third parties, the rates of interests and even the fines that are applicable to tax liens, you would have reduced the risks of failing to make profits as any normal tax lien investor will do.

Equal attention should also be given the period of grace that will be open to the taxpayer and the limitation period that will be given to the creditor. What you should always do as a careful tax lien investor is to weigh every of your actions in relation to the risk you face.

 


Making Use of Tax Liens to Pay For Real Estate

If after the period of grace, it is still considered that the taxpayer is unable to pay his debts, the owner of the lien can institute a foreclosure proceeding on the property of the taxpayer. This is in order to get a valid title over the property. As soon as this happens, the market value of the property may become greater than the real value of the property. Remember that an extra risk of getting a profitable value of the property in the current market will exist. The tax investor may decide to use his tax lien to get a valid title over the property of the taxpayer.

What is more to this is that the time and expenses involved in prolonged court actions will further have an effect on what the tax investor stand to benefit from his investment. These and other related expenses will normally be subtracted from the profits. Remember that such court actions are always envisaged because there may be conflicting claims on the same property of the defaulting taxpayer.

If it is found that the current market value of the property is far less than the value of the property, then using tax liens to pay for real estate should not be recommended.

What should always be considered is that making a sensible investment decision ahead of investing in tax liens should be your best consideration. But you must also know that there are so many risks in tax lien investments. The only advantage here is that most of the risks can be avoided if you carry out a thorough research of the market.

Get your FREE tax lien training videos here--> http://bit.ly/14x4th9

 

About the Author 

by Matthew D. Rhames

in Finance   (submitted 2009-10-19)

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Find out more about state tax liens as well as tax lien procedure when you visit http://www.businesstaxlien.com, the top resource portal on corporate tax liens