Build Your Net Worth With Tax Lien Certificates

I want to talk about another strategy designed to help you build wealth and this one deals with Tax lien certificates.

Well you are probably wondering what are tax lien certificates. Let me explain how this process works. Whenever a property owner is late paying real property taxes the county will issue a tax lien against the owner’s property. Now this tax lien is sold at an auction in the form of a tax lien certificate.

So if you were bidding on these lien certificates and you won the bid several things could transpire at this point.

1. There is now a lien ordered by the state and is the responsibility of the delinquent taxpayer to pay to get the lien released.

2. Or the winner of the bid would receive title to the property after so much time has passed and the tax payer has not paid.

Tax liens can pay a return as high as 50% on your money.

There are some risks involved however. The first risk is that some tax lien purchasers do not complete the necessary research to see if they are purchasing a vacant lot or a 16 suite apartment building.

When you have to actually go out and inspect the property, which is a good idea, it takes time money and other resources. Even though tax liens are available in other states the aforementioned facts limit the tax lien purchaser’s ability to purchase within a very limited area.

If you can legally own property in America then you can take part in the auctions for the tax liens.

Tax lien sales require that you have cash on hand. Certain counties require you have the cash then and there and some will give you approximately 48 hours to come up with the money.

If the original homeowner files for bankruptcy then other creditors as well as the IRS can have first position over tax lien certificates and the holders. So this also poses a risk.

However if you have the time and money and resources you can purchase tax lien certificates and make a nice profit such as 24%, 30% 36% and even as high as 50% return on your investment.

You see banks and credit unions have been able to overcome the risks because they have multiple resources available to them.

Tax lien certificates cannot by purchased so easily in some states. When I was living in Ohio I called the county tax office to find out about the procedure for purchasing tax lien certificates.  The clerk informed me that in order for me to purchase the tax lien certificates it would cost me t millions of dollars, I cannot remember the exact figure but it was millions.  Now this sounded strange so I inquired further. Why is this?  She said all the tax lien certificates are sold to one company and If I wanted to buy tax certificates I would have to outbid that company next year when the bidding process came about.  I see. 

Other states you can buy the certificates on an individual basis and not have to worry about the bundling procedure.

Before you embark upon this journey consult with a real estate attorney. You could end up losing out if you don’t do your homework.

To Your Great Success

Mel Richardson

Comments

[Real Estate System]

nice posting Whenever a property owner is late paying real property taxes the county will issue a tax lien against the owner’s property. great tips and advices and information regarding property tax

[Tax Foreclosures]

Certain risk involved in Tax lien as some tax lien purchasers do not complete the necessary research to check if they buying vacant lot .