Posts Tagged ‘Tax Lien Certificates’
Saturday, January 16th, 2010
Each and every owner of any kind of property is required file property taxes that is applicable to the stat and local governments. The tax will be based on the value of the property that is been owned and also in which state the property has been owned. Sometimes these taxes are referred to as the Real Estate Taxes.
Sometimes there arises some severe condition where the owner of the property will not be able to pay the property taxes that are required to be paid. When this problem arises the owners of the properties become delinquent. Once if the delinquency has been recognized, then the in charge of collecting the property taxes will be upon the appropriate governing authority. Then the appropriate governing authority will collect the tax by tax auction or through tax sales.
All states in the country have their own set of separate laws that are regarded to the course of acts in collecting the delinquent taxes. Most of the times, the local government will be put in charge in this procedure of collecting the taxes. These property taxes that are collected are basically used for the betterment of the local communities. Actually there are 2 types of Government Tax sales that are used; they are Tax Lien Certificates and Tax Deed sales
The local government that is responsible will hold an auction called as Tax Sale for the Delinquent Tax properties. Normally the general bid will be the total sum of the taxes that is owned, any administrative charges and also the interest on the amount that is owed. The bidder who will bid for more at the tax lien auction will be awarded with the deed of the property. Please note that different set of rules are being followed by different states. The rules that are followed by the states will be regarding the restrictions on the possessions and also the time lapse that is required before a person is assigned with the absolute deeds.
The tax lien certificates will also be valued and auctioned at the amount of taxes that owed along with the interest and administrative charges, but this is the place where all the similarities will come to an end. In the cases Tax Lien Certificates, there will not be any transfer of the property deeds during the time of auction. Once if all these tax lien certificates are sold out, then the delinquent tax payer have to pay back the lien amount plus the interest charges that is occurred. Normally, about 16% to 18% will be paid back to the certificate owner.
In case if the delinquent tax payer fails due to pay the amount due to some reasons within the stipulated time that is fixed by the governing authority, then the tax lien certificate owner cane be awarded with the deed of the property only after the foreclosing on the lien in proper manner. So get to know prior information on tax liens, tax lien auctions, government tax liens and much more.
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.
Tags: About, Administrative Charges, Betterment, Delinquency, Delinquent Tax Properties, Delinquent Taxes, Governing Authority, Government, Government Tax Sales, Know, Liens, Local Government, Local Governments, More, Possessions, Property Taxes, Real Estate Taxes, Stat, Tax Auction, Tax Deed Sales, Tax Lien Auction, Tax Lien Certificates, Tax Liens, Time Lapse, Types Of Government
Posted in Tax Lien Sales | No Comments »
Thursday, January 14th, 2010
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 tax lien auction is the final step that will take the delinquent properties to be sold. Tax lien 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.
Tags: Auction, Delinquent Properties, Delinquent Taxpayer, Find, Governing Authority, Lien, Obligation, Property Owner, Property Tax, Property Taxes, Public Auction, Tax Auction, Tax Certificates, Tax Deed Sales, Tax Lien Auction, Tax Lien Certificates
Posted in Tax Lien Sales | No Comments »
Wednesday, January 13th, 2010
Buying tax liens can be difficult to say the least if you?re a beginner to real estate investing. Whether you are interested and buying tax lien properties for the huge returns on your investment or just investing for the great interest rates with certificates, tax liens sales are a great way to get started in real estate investing.
Before you start investing in tax liens there are a few things that you should know. Although tax liens are considered by many to be one of the safest forms of investing you must to 3 things before investing, and that is research, research and research.
The whole point of tax lien investing is to end up obtaining a return on your investment that would be greater than the estimated value of the property. With that being said it would be pointless to invest in a property that is worth less than the price of the tax lien certificate.
After you?ve found a tax lien certificate or property that you feel you are interested in and is worth your time, the next step is to find out if the property has any encumbrances that would prevent you from cashing in on your tax certificate or property.
For example, if you have a property that is sitting on an abandoned gas station and needs to have the old tanks dug out than that could prove to be a worthless investment. If you?ve done your research prior to making your investment you can prevent losing your investment by doing something as simple as researching the area that your property is located on.
Although there are some risks associated with buying tax liens, they can and still are by many to be one of the safest forms of investing. Many property tax lien certificates are government backed. So if you are not able to have to property owner pay the back taxes during the redemption period, you can be guaranteed a certain return on your investment.
Tags: 3 Things, Back Taxes, Basics, Buying, Buying Tax Lien Properties, Buying Tax Liens, Encumbrances, Gas Station, Interest Rates, Investing In Tax Liens, Lien, Old Tanks, Property Owner, Property Tax Lien, Real Estate, Redemption Period, Start Investing, Tax Certificate, Tax Certificates, Tax Lien Certificate, Tax Lien Certificates, Tax Lien Investing, Tax Lien Properties
Posted in Tax Lien Sales | No Comments »
Friday, January 8th, 2010
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.
Tags: 6 Years, Book, Coun, Dollar Lottery, Due Diligence, Edition, Favorite Books, High Interest, How To Buy Tax Lien Certificates, Infomercials, Investing, Investment Plan, Lien, Liquidity, Lottery Ticket, Moskowitz, New Edition, One Million Dollars, Original Version, Pennies On The Dollar, Review, Right From The Beginning, Risk Avoidance, Solution, Tax Lien Certificates, Tax Liens, Update
Posted in Tax Lien Sales | No Comments »
Tuesday, December 29th, 2009
Tax lien sales have many different variations. The statutes vary by state. In many areas, the rules will also vary at the county level.
One of the most important things that you need to remember when buying tax lien certificates at a tax auction is understanding the method by which the county determines who is going to buy the tax lien certificate. In some areas, this is determined by the investor bidding down the interest rate for the lien. In many other areas the county will sell the liens on a percentage of ownership basis. In other jurisdictions, the county uses a round robin procedure to determine the winner of the auction. In this article, I will explain the differences between the methods and the advantages and disadvantages of each method.
The most common type of auction is the bid down auction. The auctioneer simply starts the bidding at the top rate for that jurisdiction and then the rate is bid down until the lien is sold. In certain areas, investors can make up for a low rate by paying subsequent taxes and through minimum rate guarantee statutes.
The advantage of the bid down method is you can easily bid on the exact lien that meets your needs. You also don’t have any possible co-ownership scenarios that can make it difficult to file foreclosure and take full possession of the property.
In other states, it is on a percentage of ownership basis. What this means is that the interest rate remains flat, but in the event of foreclosure, the investor and the property owner become co-owners of the property. The initial bid is with the investor at 100% and it goes down until the lien is sold.
This method is great for high interest rates. Iowa uses this method, which means that you are guaranteed a very nice 24% rate. The problem with this is that if you end up as a co-owner with the taxpayer, you may have an expensive legal hassle on your hands to actually take possession of the property.
In other states, the bidding is on a round robin basis. In these areas, the auctioneer offers the lien around the room until someone buys it. They are always at the maximum rate allowed by statute.
In round robin states, you get a nice guaranteed rate of return on your tax lien certificate, and don’t have to mess with the co-ownership issue. However, in round robin states, it is much more difficult to actually get the liens that meet your needs. If you decline during your turn, then you have to wait for luck of the draw to see if you get the lien that you want. If you are a big money investor, then it’s not that big of a deal because you can buy a lot of different liens. But as a smaller investor who can only afford a couple of the liens on the book, this restriction can be very limiting.
As you can tell, the bidding procedure is something that is very important in the tax lien research process. With proper planning, you can wade through the minefield and reap great rewards!
Carlos Scarpero is an experienced real estate investor who specializes in land. On his blog at
http://www.scarpero.com/real_estate, he discusses innovative and creative real estate strategies to make your real estate investing more profitable.
Tags: Auctioneer, Bidding, Bidding Methods, Buying, Certificates, Co Owner, Co Ownership, Foreclosure, Hassle, High Interest Rates, Important Things, Interest Rate, Jurisdictions, Lien, Methods, Possession, Property Owner, Rate Guarantee, Scenarios, Tax Auction, Tax Lien Certificate, Tax Lien Certificates, Tax Lien Sales, That Meets Your Needs, Understaning, What This Means
Posted in Tax Lien Sales | No Comments »
Tuesday, December 22nd, 2009
Tax lien auctions have gotten more and more competitive in recent years. Some factors that have led to this trend include: more awareness among small investors because of new courses on the market, more Wall Street money entering the market and the new trend of internet tax sales.
If you have been to the tax lien sale lately you may have noticed something interesting. The big dog investors are bidding the properties down to next to nothing. In Florida, it’s very common to see properties bid down to one quarter of one percent. Has your banker gone insane? Or do they know something that you don’t?
It’s probably a little of both, or they are probably playing the sub tax game. What’s the sub tax game? It’s very simple, really. In many states, the regulations allow tax lien investors to pay the taxes for the following years, also called subsequent taxes. In other states, the investor is actually even required to pay the sub taxes. Even more interesting, many states also have minimum penalty statues on the books that make investing there very attractive.
For example, in Florida, it is very common for the tax liens to be bid down all the way to one quarter of one percent. However, Florida also has a 5% penalty clause and an 18% normal interest rate. So, in Florida, the investor will often buy the lien at the quarter percent bid. If the lien redeems in three months, then he has made a 20% return. Worst case, the lien does not get paid for the whole year and the investor still makes 5%, which is a lot better than bank cd’s.
Then, the investor has the sub tax rule to make up the difference. He simply pays the following year’s taxes and is at the full 18% for the sub lien without any competition. Not only that, he is secured by high quality real estate. The two liens together will average well over 10%. So, the investor either gets a nice high rate of return, or he gets a nice Florida house.
Of course, that’s assuming that a hurricane doesn’t blow the house down. Heck, he is even covered there, because the tax lien investor gets first dibs on the insurance money, ahead of the homeowner and even the mortgage company. What a deal!
So, as you can see, subsequent taxes are an area of tax lien investing where you need to know the rules and learn to play the game. If you do it properly, then you can make some huge profits!
Carlos Scarpero is an experienced real estate investor who specializes in land. On his blog at
http://www.scarpero.com/real_estate, he discusses innovative and creative real estate strategies to make your real estate investing more profitable.
Tags: Bank Cd, Certificates, Hurricane, Interest Rate, Internet Tax, Investor, Lien, New Trend, Penalty Clause, Procedures, Quality Real Estate, Rate Of Return, Statues, Street Money, Subsequent, Tax Certificates, Tax Game, Tax Lien Auctions, Tax Lien Certificates, Tax Lien Sale, Tax Liens, Three Months, Wall Street, Worst Case
Posted in Tax Lien Sales | No Comments »
Thursday, December 17th, 2009
Tax lien certificates are a little known or understood investment type that can reap tremendous rewards for their owners. Essentially they combine the potentially high returns usually associated with riskier investments with the security offered by lower income financial instruments such as bonds.
Here is how they operate:
1. The investor purchases the tax lien certificate which is secured to the property it relates to – in effect the investor is paying the property tax on behalf of the property owner.
2. As an example, the tax lien may relate to real estate/land owned by someone who has not paid their property taxes. This is where you step in – by paying off the tax lien and getting a certificate in return. This certificate entitles you to (a) interest on the lein and (b) the amount of the tax.
3. Interest payable on the property is passed directly to the certificate holder. The entire billing & collection process is done by the government administration and paid to the certificate holder. The rate of interest on the lien varies but tends to be between 8% and 50% per year.
4. Research shows that over 98% of tax lien certificate holders receive payments to the value of their investment within two years – and if they do not, the tax lien certificate holder can end up owning the property for little more than the amount that was paid for the certificate.
While you may be forgiven for thinking that tax lien investments are reserved for the very rich and experienced, you would in fact be wrong. They are quite simple and can be obtained for as little as a few hundred dollars.
Some experts believe that tax liens are one of the best kept secrets within the investment world – they offer high returns on capital and it is an investment backed by the government itself. In fact, investment expert Robert Kiyosaki has mentioned the benefits of tax lien certificates in his Rich Dad Poor Dad books.
Consider these staggering advantages of investing in tax lien certificates:
Tax liens typically earn incredible rates of interest on your investment. Where else can you achieve typical rates of 15%, 25% and more per year on a low-risk investment?
The investor is never responsible for ensuring that the interest, taxes etc are collected by the non-payer. This is the duty of the government who will handle all of this on the investors behalf.
Should the non-payer fail to settle the monies owed, the investor has the legal right to foreclose on their land/real estate for an incredibly low fee. The length of time can vary between one to three years before foreclosure becomes a possibility.
Tax lien investing is fairly simple – and arguably a lot easier to understand than stocks (and certainly less risky).
As with all investments, it’s important to be well armed with knowledge and experience on your side plus an understanding of the potential problems you may face when deciding to put some of your capital into tax liens.
Below we outline some important considerations:
1. To uncover the most profitable tax lien opportunities can take somewhat more capital and research than standard ones. It involves visiting tax lien sales which can be time consuming – and before bidding on anything you should consider visiting the real estates mentioned in the tax lien sales. This can be harder than it sounds because the amount of information available is very basic.
2. Remember, that aside from buying the tax lien, you will also need to pay the taxes on the property until it is redeemed. Once you do invest in tax liens, you cannot retrieve your initial investment – instead you must wait till the lien is redeemed or the property falls into foreclosure.
Tax liens are wonderful things – high yields, the opportunity to pick up real estate for just pennies on the dollar and returns that are backed by the U.S. government. Start investigating them now before they become common knowledge.
Tags: Advanta, Backed, Best Kept Secrets, Certificate Holder, Certificate Holders, Certificates, Expert Robert, Government, Government Administration, Government Tax Lien Certificates, Investment, Investment Expert, Investment Profits, Investment Type, Investment World, Investor Purchases, Lein, Lien, Profits, Rate Of Interest, Rich Dad Poor Dad, Robert Kiyosaki, Tax Lien Certificate, Tax Lien Certificates, Tax Lien Investments, Tax Liens
Posted in Tax Lien Sales | No Comments »