Q&A: A tax lien certificate purchaser is threatening to foreclose, what can I do?

Tue, 28 Dec 2010 19:41:06 +0000

Question by IMUS B: A tax lien certificate purchaser is threatening to foreclose, what can I do?
I purchased a property 7 years ago and have never been late on my mortgage, insurance or my city taxes. I have no other liens and this is not an IRS or federal issue at all. An investor bought a tax lien certificate from my county from taxes that I didn’t realize I owed. I moved out of state shortly after purchasing the property and never received anything from the county in 7 years. Now I am getting a letter from the investor’s attorney that I owe approx 6 times what my normal tax bill amount is (after adding interest and fees). The property is actually in a real bad neighborhood and needs a ton of work and I have not been able to sell it now and I’ve been trying for 6 years. I still owe about ,000 but if they were to foreclose and auction it I doubt they would get more than a couple thousand for it.

My question is 1st of all, can they foreclose on it and if they do, can I buy it back for let’s say ,000 plus pay off the tax lien, and save myself over ,000 plus interest in the long run? If they go along with this scenario would it be legal?
It has been over 2 years since the tax lien certificatge was sold and I can no longer pay the county because my delinquent taxes were paid off by the 3rd party investor. I don’t owe the county anymore and I’m current except for that one year (2002).

Best answer:

Answer by quizzard123
Normally, you have one year from the date of the tax sale to rescue your property. To do that, you pay the tax authority (city, county, whatever it is) the accumulated tax, interest, and penalties.

Once that year is past, the holder of the tax line owns the house permanently, and you have no more rights.

Know better? Leave your own answer in the comments!

Update to Tax Lien Investing Book Review: “New Edition of The 16% Solution”

Fri, 08 Jan 2010 10:30:35 +0000

Just after I wrote a review of three of my favorite books about tax lien investing, I got a call asking me if I?d like to review a brand new edition of one of them. A second edition of The 16% Solution, by Joel S. Moskowitz, is now in bookstores and I?ve just finished reading it. It?s been a while (more than 6 years) since I read the original version of this book ? which was somewhat outdated then, so I wasn?t sure just how different the second edition would be from the first. I was pleasantly surprised! With all of the hype and recent infomercials lately touting tax lien investing as a way to get rich quick, this book is very refreshing. Right from the beginning Mr. Moskowitz sets the reader straight, giving honest and straightforward information. I was really impressed with the forward to this second edition where he likened the chances of someone getting a property for pennies on the dollar from a tax lien to someone winning one million dollars from a one-dollar lottery ticket. Yeah it happens every now and then, but it?s not likely. And then he tells you what you can expect from tax lien investing ? ?super-high interest combined with safety.?This book is divided into four sections. In the first section Mr. Moskowitz explains what tax liens are, why they are such a safe investment, and why now, more than ever before you need to include them in your investment plan. At the end of the section he has a chart that shows how tax lien certificates compare to other investments in terms of income and growth potential, risk avoidance, safety, and liquidity. Section 2 talks about how to buy tax lien certificates; how to choose a state and county to invest in and how to choose the properties to buy tax liens on. It also covers bidding at the auction and buying over-the-counter and assignment liens. There is even a chapter on how to get local officials to help you do your due diligence (This doesn?t always work in every county, but it?s certainly worth a try).Section 3 of The 16% Solution talks about how you get paid on a tax lien certificate and how to foreclose on the property. Mr. Moskowitz explains how a tax lien certificate is redeemed, how to foreclose on a tax lien, and what to do with the property once you foreclose on it. Section 4 talks about avoiding and managing risks. Mr. Moskowitz explains just what the risks of tax lien investing are and how to avoid them. That?s something that most tax lien investing ?gurus? never tell you until you give them thousands of dollars for coaching. I recommend that anyone interested in tax lien investing read this book for this section alone. Buy this book and save your thousands for investing in tax liens!Also included in the book are a couple of appendixes with helpful information. In Appendix I there is a chart of state laws for all of the tax lien states. Georgia is included even though it?s technically a redeemable deed state. This chart is a good tool, but remember, just because a state has laws that allow it to have tax lien sales doesn?t mean that they actually have any. There are at least a couple of states on this list that either have only a couple of counties or municipalities that have tax lien sales, or have hardly any properties available in their sales.Appendix II has some more detailed information for 14 of the tax lien states (these are the states that have an interest rate of 16% or higher). Some of these states are covered more thoroughly than others. My guess is that the states that are covered well are the ones that Mr. Moskowitz personally invests in. The states that are covered thoroughly are: Arizona, Colorado, Florida, Georgia, and Iowa. Detailed information on the other states is lacking. If you are investing in one of the above-mentioned states or planning to invest in one of these states I recommend that you purchase this book. Also if you are planning to invest in tax liens on commercial or industrial properties there are helpful forms for avoiding environmental problems in Appendix III.This book is great for beginner investors in tax liens, it does not have information about tax deed investing, but it does have detailed information for 4 of the more popular tax lien states, and one redeemable deed state, plus general information for the other tax lien states. It also discusses investing online and purchasing leftover liens. You can purchase this book at a discount on Amazon at http://budurl.com/vdns.

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 the Tax Lien Investing Basics 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. Go to www.taxlienlady.com for more information about tax lien investing.

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Q&A: A tax lien certificate purchaser is threatening to foreclose, what can I do?

Update to Tax Lien Investing Book Review: “New Edition of The 16% Solution”