OfflineI have been researching Tax Lien Sales/ Auctions for my area and it has opened my eyes to some nice ways to invest my money other than my worthless 401K. Now again, buyer beware! (I have been reading posts about this topic, but no too many follow-ups). Thanks to the internet we have the right tools to do some proper due diligence. This is what I have found for the Colorado State area as an example (I am new so anyone can chime in or make clarifications):
Colorado pays 9%+ in interest on tax liens won in auction.
They require a 3 year redemption period.
As the Tax Lien Holder of a particular parcel you only get your money with interest, when the taxes have been redeemed prior to 3 years.
You can "Assign" the Tax Lien Certificate (Investors should research and be clear on this process if you invested out of state.)
You can endorse delinquent back taxes for subsequent years leading up to the 3 year period to take a larger stake in the process (Again, beware of the property values!)
Wait out the 3 years and attempt to claim Treasurer's Deed (this process can cost min. $500 +)
If the certificate is redeemed prior to deed issuance, you will receive your investment, interest, and your application fee in full. However, no interest is earned on the application fee.
Here are some cons:
Most counties post a less than 1% that the tax lien is not redeemed in high value areas.
The Treasurer's Deed will not be issued until ALL subsequent property tax liens are paid in full and fees paid.
The Treasurer Deed process can take 3 years + to finalize your right to the deed.
Thoughts:
This is an investment process with a higher yield than any stock. You do not own property, but have first right to property for monies owed. If you are a patient and wise investor you could have several properties almost free and clear with the right due diligence. Also, this is by no means a get rich quick method (but I like it better than my 401K).
Anyway, I am looking for more inforamtion, advice and mentoring to start my investing methods. I have information coming from taxsaleslist.com. This guy is a family run business in the Denver area, so I have been listening and reading as much as I can. I really want to pursue this aspect of Real Estate Investing. My other interest is puchasing REO's but I am not ready to dive into the deep end of the pool.
Thanks for reading. Hope I can help out.
Vinny
Vinny are you limited to that one state? There are other states that you only have a 60 day redemption period. If you do not want to wait the 3 yrs. And you can do it all through the mail! Oh and I'm a member of taxsalelist.com As a matter of fact I have a workshop in one hour.Your more than welcome to ask me anything I'll help the best way I can!
Vinny are you limited to that one state? There are other states that you only have a 60 day redemption period. If you do not want to wait the 3 yrs. And you can do it all through the mail! Oh and I'm a member of taxsalelist.com As a matter of fact I have a workshop in one hour.Your more than welcome to ask me anything I'll help the best way I can!
Vinny are you limited to that one state? There are other states that you only have a 60 day redemption period. If you do not want to wait the 3 yrs. And you can do it all through the mail! Oh and I'm a member of taxsalelist.com As a matter of fact I have a workshop in one hour.Your more than welcome to ask me anything I'll help the best way I can!
Vinny are you limited to that one state? There are other states that you only have a 60 day redemption period. If you do not want to wait the 3 yrs. And you can do it all through the mail! Oh and I'm a member of taxsalelist.com As a matter of fact I have a workshop in one hour.Your more than welcome to ask me anything I'll help the best way I can!
Vinny are you limited to that one state? There are other states that you only have a 60 day redemption period. If you do not want to wait the 3 yrs. And you can do it all through the mail! Oh and I'm a member of taxsalelist.com As a matter of fact I have a workshop in one hour.Your more than welcome to ask me anything I'll help the best way I can!
Vinny are you limited to that one state? There are other states that you only have a 60 day redemption period. If you do not want to wait the 3 yrs. And you can do it all through the mail! Oh and I'm a member of taxsalelist.com As a matter of fact I have a workshop in one hour.Your more than welcome to ask me anything I'll help the best way I can!
Vinny are you limited to that one state? There are other states that you only have a 60 day redemption period. If you do not want to wait the 3 yrs. And you can do it all through the mail! Oh and I'm a member of taxsalelist.com As a matter of fact I have a workshop in one hour.Your more than welcome to ask me anything I'll help the best way I can!
Vinny are you limited to that one state? There are other states that you only have a 60 day redemption period. If you do not want to wait the 3 yrs. And you can do it all through the mail! Oh and I'm a member of taxsalelist.com As a matter of fact I have a workshop in one hour.Your more than welcome to ask me anything I'll help the best way I can!
Vinny are you limited to that one state? There are other states that you only have a 60 day redemption period. If you do not want to wait the 3 yrs. And you can do it all through the mail! Oh and I'm a member of taxsalelist.com As a matter of fact I have a workshop in one hour.Your more than welcome to ask me anything I'll help the best way I can!
Vinny are you limited to that one state? There are other states that you only have a 60 day redemption period. If you do not want to wait the 3 yrs. And you can do it all through the mail! Oh and I'm a member of taxsalelist.com As a matter of fact I have a workshop in one hour.Your more than welcome to ask me anything I'll help the best way I can!
cumputer screwed up! Sorry!
Approximately 33 out of the 52 states are "Tax Lien Certificate" states
How it generally works is when a property owner is late on paying real property taxes, the county or municipality will issue a a tax lien on that person's property. Certain states allow the tax lien to become a first lien on the property, which is then turned around and sold at auction as a tax lien certificate. This senior lien puts everything else under it's feet which is why in some cases the mortgage company will pay you on behalf of the owner if they see you're not being payed back your investment plus whatever the states interest rate is.
After placing a successful bid, buyers of a government issued tax lien certificate will then get one of two things:
1) A state-mandated yield from the lien, which the delinquent taxpayer must pay in order to release the lien plus interest and or additional penalties.
2) Title to the property (after a certain amount of time, set by the jurisdiction) if the delinquent taxpayer fails to pay up past the due date.
Individuals have been buying up tax liens more and more because of these two benefits. A fixed percentage rate, mandated by a government agency, or the title to property at a substantial discount are incredible benefits rarely seen with other real estate transactions.
The only major risk is making sure you want the property incase you get title to it through default of payment to your original investment. Sometimes it's better to do this as a group and split the costs and responsibilities up.
Typically a Tax Lien is worth 1-3% of the value of the property, so for example a $1000 dollar certificate would hold a property value of around $100-120 thousand.
These are GOOD investments because they're backed up by real property or land.
Darrel,
No I am not limited to one state, but I wanted to make it real by looking into my home state. Also, the family running the website Taxsaleslist.com is here in Denver, Co and I have attended his workshops. They are informative and I have been researching the states that I want to buy in. I am researching internet sales and schedules. Also, I am trying to save enough to buy the state guides and materials to learn the ins and outs.
I do not have enough money saved to jump in directly. My 401K is locked up and my other assets are too small to buy or levarage. Any information would be helpful. I am looking more into tax liens than tax deeds. I am scoping the best states for ROI and redemption periods. I am currently looking at Iowa, Virginia, Colorado, and Texas. This is for long term investing with the hopes of getting a property. Again, any information or guidance would be great. I will be attending another workshop but my day job is really keeping busy and focused until things slow down again.
I would like to keep in touch thru this website and accumulate all the knowledge you have to offer or anyone else for that matter. If I could find a way to start laddering my money into this investment strategy that would be great.
Sincerely,
Vinny
In Lancaster P.A. THERE IS A TAX SALE COMING UP IN SEPT. The sale is to be advertised August 7th. The lsit of proerites that will be sold at the sale will made public on the 7th. This state has no redemption period. So you become the owner once you win the bid. I have my eyes on a prop that is really old in age and ran down, outdated in layout and all. The house has been vacant for 3 years or so. I saw the inside terrible. Its in a unigue location on a nice lot perfect for a business of some kind or a new house. The lien on it is about 3k. I was thinking to buy it get the house torn down and selling the land. People wish the house would dissapear. If I can buy it and sell the land, I believe I can make a some good money from the land. What do you think?
I got my mind made up.....
www.Kingjussinvestors.com (Take a look and leave an opinion)
Do you think the value of the land would go up once the house is torn down. I honestly believe it would, because with the house gone the loation of land would become more desirable. If so would someone be willing to invest in the deal with me. I will be getting the deal going with another investor to fund the purchase of the house and the cost of the tear down. And we split the profits from the selling of the land.
I got my mind made up.....
www.Kingjussinvestors.com (Take a look and leave an opinion)
One of the best way to acquire a property for pennies on the dollar is not to buy it at a tax deed sale, but at a tax lien sale. Why? because at a tax deed sale, you will be competing with other bidders. Many of these bidders may be willing to buy it for 50 cents on the dollar, sometines even more. If you purchased a lien at a tax lien sale, you are really buying for a rate of return. However, if the lien does not redeem, you may get the property for little more than one or two years of back property taxes.
While this situation is very rare, it does happen. In most lien states, the forclosure process does not involve a public sale of the property but only a statutory requirement to send certified letters to the owner and lien holders, and typically a notice in the legal section of the local newspaper. In most cases, a foreclosing property tax lien holder is only paying off a subsequent property tax lien holder, paying the back taxes, and reimbursing the county for its administrative fees for publication.