Tax Lien Property Foreclosure

Tax LienForeclosure of a tax lien property is never a good experience to deal with. It is crucial to be aware of where you stand once your property has been foreclosed by the government or lender. And once the proceedings are put in place, you are going to have a limited time catching up on your mortgage payments.

Do this prior to the lender accelerating the payments, and to the point where they would accept nothing less than full payment for the property. If you intend to keep the property, the allotted time provided for this would vary depending on the loan provider. It would usually be no more than a couple of months.

Are All Tax Liens The Same?

Tax Lien AuctionsThe answer is no. It is because liens vary in priority and types. Priority is very important. A good example of this is a first lien mortgage on a property. Moreover, a lender who is holding a senior lien in the form of a mortgage on a property has the right to repayment of its debt, before any junior lien holder.

The repayment is typically acquired through the proceeds of a mortgage foreclosure sale or tax lien auctions. In case you don’t know, foreclosure relinquishes all interests in the property that are junior to that mortgage. This is why first lien mortgage on a real estate is crucial.

Types of Common Liens

Tax Lien CertificatesUtility Lien
It is a lien filed on a property by the utility service or county for failure on the part of the homeowner to pay bills such as electricity or water.

Property Lien
When a homeowner fails to pay real estate taxes, then the county places a lien on the property. Then, the county puts up tax lien certificates in an auction and whoever wins the bidding gets the lien certificate.

Divorce Lien
A divorce lien is filed on a property as a result of an official order issued by a legal authority such as the court.

Mechanic’s Lien
It is the type of lien that is statutory and secures payment for labor, material, and services
related to improvements made on a property.

Judgment Lien
It is a type of lien created when a lawsuit is won against a defendant of a criminal case. Then, it is attached to the property in order to be received as payment after it is sold.

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.

Pre-Auction Tax Lien Investing Deals

Pre-Auction Tax Lien Investing DealsHave you heard about pre-auction tax lien investing?  It is the option given to real estate investors to purchase tax lien properties directly from the homeowner before it goes to a tax sale.  But prior to doing that, a research on tax delinquent properties must be done in order strike a deal with the homeowner.

With pre-auction investment on tax liens, you get the opportunity to get the properties at cheap prices.  Little do other investors know, some of these homeowners are letting go of their properties because of personal reasons.  They come to the difficult decision of selling rather than get nothing from the government. This is where you come in and land a deal of a lifetime.

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.

Tax Deeds Loophole Strategy

Tax Deeds Loophole StrategyIf you are keen in purchasing property for its back taxes, then consider yourself a wise real estate investor.  Investing in back taxes of a property is the most profitable task you can do.  However, as more people are going to find out about this lucrative investing method, tax sale on delinquent properties are getting crowded with competing bidders.  Furthermore, it is getting difficult to acquire good deals anymore.  So, if you want to be successful at getting tax delinquent properties, here is how you can purchase them for the back taxes, without the hassle to compete against other bidders at the sale.

There is a “loophole” strategy that allows you to exploit tax deeds or tax lien properties for profit.  You can do this before they end up in public auctions.  After the property is sold at the sale, purchase it directly from the owner.  In most places, you can legally pay of the tax bill on the property, during a specified redemption period.  As you may already know, most property owners are emotionally exhausted from dealing with their financial problems.  They are willing to just move on and let go of their properties.  It is during this time that you can make an offer on their property for a modest price.  Simply pay off the property’s tax bill and you’ve got yourself a return of investment.

Tax Deed Properties Goal

Tax Deed Properties GoalBuying tax deed properties at foreclosures is surely one of the best methods to get bargain homes and profits.  Most property owners want to avoid a foreclosure because of its financial consequences that can leave a negative credit posting.  That is why you must approach these property owners with the intention of helping them get out of a bad situation.

However, it is not your responsibility to solve the financial problems of the homeowners.  You are there to buy their properties and make profits.  Acquiring the tax deed properties at a fair price is the goal.  Get the facts and check their accuracy prior to making any formal offers.  Create a back-up plan to keep you from unanticipated issues that may arise along the way.  Always check the title before, during, and after dealing with the seller.  Set a desired budget for each property you’re interested.  Prepare the necessary requirements and do research whenever you can.

Tax Lien Certificate Inspection and Getting the Right Sources

Tax Lien Certificate Inspection and Getting the Right SourcesAny person, who can legally own a property in the United States, can buy tax lien certificates at public auctions.  However, it is crucial to thoroughly inspect and survey the area where the property is located prior to buying the lien.  Most especially if it is a tax deed wherein there is a high possibility of the title being transferred to the owner of the tax lien certificate.

Delinquent sales on tax lien certificates are becoming popular and quickly catching up in the real estate industry.  However, tax lien certificate is not advertised well enough for everyone to know and be interested in them.  Interested investors might have to search far and hard as well as digging into knowledgeable sources to find good deals.  It is a great way to tap into opportunities that can help you succeed, and one of these is being in touch with a real estate expert.  You must know that there are already many people that have acquired highly valuable pieces of property.  You can also get these properties at inexpensive prices via tax lien certificate buying.