If you invest in tax lien certificates, there are certain things
that you need to do in order to keep your investment profitable. By
automating your business, you won't miss any deadlines that might reduce
your profit on your tax lien portfolio. You must keep track of when you
bought your tax lien certificate, when subsequent tax payments are due,
and when the redemption period ends. You will also need a system for
recording liens with the county, sending out 30 day notices at the end
of the redemption period, sending out requests to tax collectors for
taxes due and tracking the profitability of your liens.
Let's
start from the beginning. Before you even purchase a tax lien
certificate, you need to contact the tax collector and get a list of the
sale properties. Some tax collectors will give you a list with all the
information that you need to do your due diligence, but most will not.
You need a system for finding the information that you need, doing due
diligence on the properties and deciding on which properties you want to
bid on and just how much you can pay and still make a decent profit.
I
use a software program to help me with all of this and data from
LienSource, a provider of tax sale lists for some of the east coast
states, including the two most popular tax lien states, New Jersey and
Florida. In my software program I have all of the contact information
that I need including the phone numbers and addresses of all of the tax
collectors in the state. Also with my subscription to LienSource, I get
updates on what sale lists are available and I have a calendar of sales
for the state so that I know what sales are coming up. If I buy a list
from LienSource, I can import all the data directly into the software
program. The software program has it's own calendar that will show all
the sales that I import as well as relevant dates for any of the liens I
own, such as when quarterly taxes are due and when redemptions periods
are over.
My software program allows me to print due diligence
sheets listing the sale properties. I can take this with me to do due
diligence on the properties. The program calculates how much premium, if
any, I can pay for the properties on the list. It also allows me to
print out a bid sheet listing all the properties, the way that they will
be read out loud at the sale, with the maximum that I can pay for each
property so that I know when to stop bidding. This way the emotion of
the auction does not carry me away and I make sure that I am profitable.
This is very important in New Jersey, where interest is frequently bid
down to 0% and then premium is bid. You can easily loose any profit buy
paying to much premium for a tax lien.
After I have purchased a
tax lien certificate I use the software to track my lien. I keep track
of all of my expenses, like recording the lien, and any subsequent tax
payments made. I can also print out an affidavit with one click of my
mouse to send to the tax collector whenever I make a payment. This is
very important, because without that affidavit, you could loose any
additional payments and the interest accrued on them. I can also use the
software to track my current profit to date on any individual lien or
my entire portfolio and it will let me know when I need to pay
subsequent taxes and when a lien is ready to foreclose. I can even track
the progress of the foreclosure.
I hope by now that you realize
that investing in tax lien certificates is not just going to tax sales
and buying tax liens. You need to do due diligence on the properties,
keep up with the tax liens that you have by paying the subsequent taxes
when they are due, and start foreclosure procedures when the redemption
period is over. All these things take some time and effort on your part,
but if you put in the time now, you will reap the benefits later. Find
your own system for doing these tasks to help you streamline your tax
lien investing business.
Joanne Musa works with investors who want to reap the rewards of
tax lien and tax deed investing. To receive Joanne's awesome 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://bit.ly/14x4th9
Article Source:
http://EzineArticles.com/?expert=Joanne_Musa
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