Is Tax Lien for Beginners?

Tax sales are dominated by real estate experts who have years of experience and hundreds of thousands of dollars to invest. So, tax lien is not for beginners. Is this true? This may not be the case.

Tax lien sales make a way for you to acquire dirt cheap properties even though you are a beginner. You can pick up properties near your area at a tiny fraction of its value. That is if you know where to find these properties.

Furthermore, if you observe during the auction, there’s going to be a bidding war. Let the other bidders fight over the liens. When the redemption period is close, go the county and look up which liens remain unpaid. You can then make an offer of buying those over the counter.

Tax Lien Certificates Quick Summary

Tax lien certificates investing present an alternative way of putting your hard-earned money into something profitable, aside from the stable job you have. Here’s a quick summary why a lien is put on a property and how the whole process works:

a. Homeowner does not pay his property taxes on time.
b. The county then sends a late payment notice.
c. County informs the homeowner that a tax lien may be placed on his property.
d. Homeowner fails to pay property taxes in due time.
e. The county places the lien on the property.
f. The property’s lien is put up for auction to the public.
g. The winning bidder gets the tax lien certificate. This serves as proof that the investor earns a guaranteed interest rate and return of investment.
h. Homeowner pays the back taxes owed plus penalties.
i. The county mails a check to the investor containing the initial investment plus interest earned on his investment.

State Dependency on Tax Lien

Every day in the United States, tax liens are placed on properties, on whose owners have failed to pay property taxes to the government. The amount of taxes would depend on the tax debt owed by the owner. This is also the same with the period of time given to the homeowners to redeem their properties before the set deadline.

Once a tax lien is placed on a property, any interested investor can pay its back taxes after winning it in the tax auction. He or She can earn the interest at good rates from the money invested. The interest rate would also depend on the amount of property taxes paid by the homeowner.