Tax Lien Certificates Bid Down the Interest Method

Tax Lien Certificates Bid Down the Interest MethodBid down the interest is one of the methods used in public auctions to sell tax lien certificates. Interested investors are asked to specify the lowest rate of interest that they’re willing to accept. This is in exchange for the holder of the lien certificate’s rights to the property at stake.

The specified rate of return set by the state would serve as the maximum. The winner is the bidder who specifies the lowest rate. The tax lien certificate is then awarded to the winner.

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Invest in Tax Lien Properties with Knowledge Beforehand

Invest in Tax Lien Properties with Knowledge BeforehandSome investors may have mastered the concept of investing in tax lien properties. They already have ideas and strategies on how to bid for tax liens. Nevertheless, for those who don’t have any clue yet in real estate, this topic may appear unfamiliar. And as far as application of the process is concerned, it can be difficult for them to do the actual process.

It is crucial to be informed on the aspects of tax lien prior to investing because money is involved. To be a smart investor, one must be aware on each penny spent, otherwise lose financially. That is why research and analysis, coupled with due diligence, is a must in order to achieve profits and return of investment.

Invest in Properly Inspected Tax Lien Properties

Invest in Properly Inspected Tax Lien PropertiesOne of the keys to a successful investment in tax lien properties is conducting a proper home inspection before investing. Banks in most cases owns foreclosed properties and would ask for a home inspection report. However, just in case it does not, you must acquire a home inspection report for your money’s worth and benefit.

Up-to-date home inspections are crucial as it informs you of any defects and present modifications to the property. The home inspection also helps you convey future prospects of the property. Aside from getting the services of a home inspector, you need to visit the property together with your real estate agent. Do this in order to avoid wasting your money in a property with bad capital appreciation rates.

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.