Tax Liens and Tax Deed Investing

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"How to Invest in Tax Lien Certificates"

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Article: "Investing in Tax Lien Certificates"
By Andre Plessis

Tax Lien & Tax Deed Investing.

Investing in Tax Lien Certificates

Tax Lien Certificates will be the safest, easiest and maybe the most profitable investment you will ever make. If you take the time to learn the ropes, you will discover why real estate is one of the the safest, most accessible, most lucrative investment you can ever make. Real estate investments to create multiple income streams.

Now is the time for you to take advantage of investing in Tax Lien Certificates. This is a huge opportunity with the highest return on investment. How would you like to earn 16% to 24% up to 50% on your investment?

This secret is called a Tax Lien Certificate. In many counties throughout the United States, local governments have millions of dollars in outstanding and overdue property taxes. Local governments use property tax to fund the daily services high priority over judgment lines, mortgage lines, trust deeds etc...This ensures that money for public services is paid and this is why local governments will create and sell tax lien certificates. The lien is secured by the real estate property it is attached to.

State, county and local governments raise money to provide benefits and services via taxation. One type of taxation, is a tax on "real property. This tax is collected by the county where the property is located. If the owner of the property fails to pay the property tax, the amount of the tax becomes a lien against the property. Unfortunately a lien against the property does not help the county and local governments pay for the services and benefits for their citizens. The county needs the money. By state statute, each county is authorized to collect the taxes due that remain unpaid by selling at public auction, either a Tax Lien Certificate or a Tax Deed.

Learning how to buy these Tax Lien Certificates and Tax Deeds is one of the best ways to achieve financial freedom. These form of investments are is not well publicized; banks and brokerage houses have no incentive to tell you about it; and real investors who are doing it consider you competition.

How do you acquire the information and skills you need to make money investing in Tax Lien Certificates and Tax Deeds? You need to start learning everything you can about investing in Tax Lien Certificates or Tax Deeds. There are over 2,500 counties in the United States, and each of them does things different. Most of the counties have information you can obtain for free. A good website to access the various counties across the U.S is www.naco.org.

If you have limited capital or are looking for a guaranteed rate of return on your investment portfolio, you may wish to focus on Tax Lien Certificates. If your mail goal is to acquire and sell properties or to build a portfolio of investment real estate, then you may wish to focus on attending Tax Deed Sales.

The first thing you may need to do is to contact the Tax Collector or Treasurer’s office in your county and try find out the answers to the following questions:

	When will next Tax Sale take place?
	Where will the next Tax Sale take place?
	How can I get a list of the Tax Liens/Properties to be auctioned?
	How can I get the Rules of the Sale?
	If a it's a lien sale, what is the interest rate? How is it calculated?
	Does the county have any unsold Tax Lien Certificates or properties from the last Tax Sale?

You should then ask how to see a copy of the list. Many counties have thousands of unsold tax lien certificates. The information you get will vary from one county to the next, and you will start to become familiar with the terminology used in your state and counties.

When you know the date, time and terms of a tax sale, get a copy of the list and start locating properties as it is important you know the conditions, value of the properties. Failure to determine the value of the property backing a Tax Lien Certificate can put you a great risk. If need to know as much as possible on a property you may acquire in the future.

Whether it is called a Tax ID #, or a Folio #, or a Parcel #, or a Real Estate #, the function is the same to identify that parcel. That number will normally be all you need to:

	Find the legal description on the sale list
	Find the property address
	Find the owner’s name
	Find the assessed value
	Find the size of the parcel and what if any structures or improvements are on the property

You should also look up similar sales to come up with a fair market value by looking at comparables within a certain mile radius. If you only have a few thousand or even only a few hundred dollars to invest, you can immediately eliminate the larger properties. Remember that although statistically more than 97% of Tax Lien Certificates redeem, you may be one of those whose certificate is not.

When you are decide which tax lien certificates to buy, what type of properties do you want to acquire? Do you want residential or commercial properties? Once you have narrowed your list to the tax lien certificates you are actually interested in, you can either go Online to the county web site or visit the County Land Records office to continue your search. Also take into consideration that there may be tax liens from previous years attached to the property.

Your goal should be to locate properties that are much more than the back taxes owed. This would guarantee one of two following things: Either the property owner will find a way to pay the taxes back to avoid losing his/her property, or you will acquire a property that can be sold at a huge profit. Keep mindset and you are guaranteed greater success.

Make sure you understand the bidding process and how it will works in your state. In some states the bidding starts at the rate set by the statute and each bidder bids a lower interest rate. For example, the opening bid on a Tax Lien Certificate could be 18%. Participants would bid 17 1/2% , 17%, etc. until the lowest interest rate someone is willing to accept is reached. That person has now purchased that Tax Lien Certificate at that rate.

It is not a complicated process once you understand it, and it makes much more sense if you attend an auction and see how it works. It is the best way to see how simply it works.

You don't need a lot of money to get started.

To Your Success,

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Andre Plessis

Andre Plessis
"The Mortgage Guru"
"A Mortgage Professional whose primary goal is to provide the expertise, guidance and skills necessary to obtain the best mortgage to meet your personal needs".
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