Helpful Notes on Tax Lien Certificates

Helpful Notes on Tax Lien CertificatesWhen investing for tax lien certificates, do not forget that some counties and jurisdictions in the United States require large deposits from investors at the start of the auction. It is regardless of the tax lien certificate amount that you are looking to purchase. Moreover, payments of these liens are usually in cash and due on the spot. Failure to pay the full amount can potentially result in barring you from future tax lien sales.

Do take note that lien certificates are almost worthless, until the designated time frame provided for the original property owner to pay up his tax debt. Furthermore, lien certificates cannot be traded for cash. So, keep it or until the fees are settled by the property owner.

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What is a Lien and Property Foreclosure?

Tax Lien AuctionsA lien is a notice attached to your property which informs the public in attention that a creditor has claim. Liens are filed and recorded in the county office or with the state secretary.

Just to make it clear, a lien existing on your property has a bad effect on the title, which prevents you from selling it. You must pay off the lien in order to avoid foreclosure and clear the title of the property. Then, have a release filed in the county office records which puts the general public in attention of the debt discharge. However, if you fail to pay up, you’ll potentially lose your property to tax lien auctions. The tax lien certificate holder to your house can choose to foreclose the property and get his return of investment.

Florida Tax Lien Investing Pros and Cons

Tax Lien InvestingInterested in Florida tax sales? Tax lien investing in Florida yield pros and cons for would be investors. As long as you bid on properties that fit the bill, and do due diligence, there’s no need to worry about acquiring the property, if you’re only after the return of investment.

Be confident that your lien would be paid when someone bids on the property at the sale. However, you need to pay an application fee and redeem any outstanding liens as well as pay subsequent taxes, which vary from county to county. The good thing though is that everything you pay from this point forward would earn 18% interest until the property is sold or redeemed.

Tax Lien Investing Steady Income

steadyTax lien investing is one of the best methods to establish a steady stream of income in the real estate market.  However, it would take research to learn the ropes but would be well worth the effort afterwards.  This is the reason why investors are diving in for the opportunity that guarantees profits through interest rates.

With tax lien investing, you can easily gain as much as twenty percent on your initial investment with little risk.  This differs for every state of course.  Plus, there’s an opportunity to flip the property later on for more profits.  These and more, makes investing in tax lien a very attractable investment in the U.S. nowadays.

Real Income in Tax Lien

realincomeInvesting your hard earned money in tax lien is one of the best methods to build a constant flow of good income in your real estate plans.  It would take a lot of research though to learn the ropes however, your efforts are rewarded well enough.  You can easily earn up to twenty percent on your investment with almost little to zero risk whatsoever.

Basically, counties in the United States raise money by taxing the property of a homeowner.  If the homeowner fails to pay his taxes, the tax amount becomes a lien against the property.  The great thing about this is that the lien supersedes any other judgments against the property.  This also includes the mortgage.  This simply means that if the homeowner does not pay property tax, then you as the holder of the lien acquire the title to the property.  Ahead of the bank that holds its mortgage.  With this, the bank itself would pay the lien off just to protect their investment, even with any interest.

In the first place, why do the counties sell these liens?  It is because they need the money from taxes, in order to pay for schools, police, hospitals, and other public services.  Each and every county is authorized to collect the taxes due by statute, which remains unpaid by selling at public auctions.  It is either a tax lien or tax deed.  So, invest in tax liens because the income is real and can provide a lasting flow of cash in your pocket.

Overages at a Tax Deed Sale

Overages at a Tax Deed SaleWhen there are more bids for a property at a tax deed sale than is owed in back taxes, the funds or overage amount is originally due back to the owner of the property.  Unfortunately for these owners, many have ignored communication with the government.  They miss the notice of the overages and just move on and leaving them behind.  The outcome is that the overages are permanently lost to the government.

There is a legal loophole that exempts these funds from having finder’s fee caps.  You can locate the homeowners and charge 50% in finder’s by helping them get the unclaimed funds.  With this method, you can earn a five-figure income just be connecting the homeowners with their overages.  The profits are possible especially with the number of foreclosures rising up every year.

Tax Deeds Homework and Research

Tax Deeds Homework and ResearchIf it is your first time to get into the lucrative investment of tax deeds, then try to visit as many websites on tax sale information as you can.  Also, check out every book on the subject that you can get your hands into.  There are many great resources that you can take full advantage of with the free information they can give.

The key to a successful tax deeds investment is to conduct your homework on the properties you’re interested.  Then, talk to someone who has vast experience in purchasing tax deed properties.  Having an experienced real estate investor’s tips, strategies, insights, and knowledge would also help you reach that investing goal further.

Hard Times Lead to Tax Liens and Tax Deed Sales

Hard Times Lead to Tax Liens and Tax Deed SalesThe economy is in trouble which as a result turned many financial balance sheets to a downward spiral.  Tax deed sales, tax lien auctions, bankruptcies, and foreclosures are getting common than ever before.  Why are homeowners going down these paths?  Here are some explanations:

Bankruptcy is a legal action by the government where a delinquent taxpayer is going to eliminate his tax debts.  This usually happens after a job loss, divorce, or medical payment problem.

Tax deed sales are quite different in the case that it is not the bank that’s the holder of the bad debt but the government instead.  The amount due is a percentage of the assessed value of the property and is paid annually.  Payments do not only include taxes but insurance as well.  If the homeowner fails to pay his tax debt, the government steps in to seize the property after the redemption period.  The property is then put up for sale and sold to the highest bidder.

Tax lien sale is similar to tax deed.  Homeowners who fail to pay their tax debt also lose their property to the government.  The winning bidder at the auction gets the deed to the property free and clear.

Tax Lien Foreclosure Property Information

Tax Lien Foreclosure Property InformationMany people think of buying foreclosure properties as an old house that needs to be fixed up overall.  Try to understand that foreclosure means the homeowner cannot make the mortgage payments, resulting to the lender taking the property.  That is why the government puts a tax lien on the property.  You can purchase the foreclosed properties at an auction.  However, it is strongly advised to wait until the bank places the foreclosure back on the real estate market.

There are percentages of the interests to be earned set for every state.  The interest determines the average return of investment on the tax lien certificates.  Tax deeds with a right of redemption also have its rates of return listed.  You can find this information in many websites including your local county office.

Tax Lien Dues and Payment

Tax Lien Dues and PaymentIn many places in the United States of America, a homeowner owes the government a yearly tax on their property.  If the homeowner does not pay this in the specified deadline, the Internal Revenue Service or IRS has the authority to issue a tax lien on that property.

If the homeowner fails to pay the required taxes after the redemption period, the government would seize the property and sell it to the public.  The prices of the property included in the tax lien sale would almost be dirt cheap in these circumstances.  This allows a wise investor to come in and buy low, then sell high later on.