OfflineWhat is a Tax Lien Certificate?
A tax lien certificate is nothing more than a lien on a property for not paying taxes. Essentially, each and every year owners of real estate have a tax lien (aka financial obligation to pay taxes) placed on their real estate. If the property taxes are paid on time the tax lien is removed. If they are not paid, in due time the county government will allow investors to pay on behalf of the real estate owner. The winning bidder at the public tax lien auction receives a tax lien certificate as proof of purchase. As the owner of the tax lien certificate the investor may expect one of two possible outcomes, 1) An annualized return of 16%, 18%, up to 50% per year on what they paid to obtain the tax lien certificate or 2) Through foreclosure, become the owner of the real estate free and clear of any junior liens (aka mortgages and mechanics liens).
Once you become the owner of the tax lien certificate all you must do is sit back and wait. When the property owner finally decides to pay his tax obligation he / she must pay a visit to the county tax collectors office where he/she will repay what you paid to acquire that tax lien certificate plus interest. At this point the government will contact you, ask you to return the tax lien certificate and upon receipt of the tax lien certificate the government will generate a check in the amount you paid to acquire the tax lien certificate plus interest.
For those of you who are investing in foreclosures, this is another great investment that compliments foreclosures. For those of you that know lien priority you know that property taxes get paid first above everything else, even mortgages. Therefore, tax lien certificates are a very safe investment. So, next time you come across a foreclosure and you run a title report and find unpaid property taxes, you may want to see if you can invest in the certificate. It may be worth your time. The best part about Tax Liens is that they are available in every county in the U.S. The most popular county is Maricopa, in Arizona.
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Good knowledge!
Although you can only buy tax lien certificates in tax lien states. The other states are tax deed states, like California.
Good Post, Sissy
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The tax lien certificates are a great opportunity. You will get interest on you investment if they redeem and the property if they don't. I bought two tax liens in August 07 and on Sept. 1 of 08 got title to both properties. They needed some work on them but my cash investment in them is only about six percent of their after repair value. On the other hand, I bought one tax lien certificate in the 08 auction, the owner redeemed the next day so I only earned $0.46 in interest. Tax liens are a good opportunity provided you do your due diligence and acquire a resalable property.
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thanxs in advance. i have been trying to purchase my first home via tax lien. which i understand to ne the fastest and easier way to obtain a first home with the market the way it is. thanxs again.
Quanda
thanxs in advance. i have been trying to purchase my first home via tax lien. which i understand to ne the fastest and easier way to obtain a first home with the market the way it is. thanxs again.
Quanda
Try and check the property out if you can. (drive by) Here in Indianapolis many homes are in less than good neighborhoods and make the local paper for trash clean up or misc problems that need attention. I saw one that was about to fall down it was so bad. Just remember that if the grass needs cut or a repair to the outside needs done than the county government will do it and bill you.
There are good deals out there but do the homework and find those gems.
Doing your homework is important. There is a good reason some properties are in the tax sale, it is cheaper for the owner to let it go than to make it salable.. Even at very low acquisition costs the property wouldn't be profitable.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
I thought I read that Minnesota did not allow tax lien certificate sales. Can anyone confirm this?
Cyle Greenwell, President
Max Enterprises, Inc
612-437-7960
maxenterprisesinc@****
cylegreen
Minnesota is a DEED STATE!
Great information, thanks for posting. I was always interested in learning more about tax lien certificates and I found Dean's Think a Little Different Course was very helpful with understanding the process. I am happy to say that my wife and I did purchase some tax certificates and now after the waiting period and proper notifications and filings will be able to get a property. Good luck on all your deals. Believe and Achieve!
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I need further clarification on the whole process of tax liens. Thanks.
Sandra
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Is Las Vegas/North Las Vegas, NEVADA a tax lien state? or deed state?
Guess what Nevada is a tax liens and a tax deed State. As a matter of fact Esmeralda County Is having one 8-15-09 And City of Las Vegas is having one 7-28-09 And City of North Las Vegas is having one 7-28-09 And these are tax liens sales.
Is there somewhere you can go to get lists online and to bid online without having to pay a site such as taxlistsales.com They want like $650 a year to join or pay for every list you get, from $5 to $100 or so.
Thanks,
Brian