Tax foreclosures are a passive income strategy with minimal paperwork and low cash outlay which makes it perfect for Beginning, Intermediate, & Experienced i nvestors.
Tax foreclosures are auctioned off for all amounts. Plus the investor does not pay for maintenance, insurance or the mortgage on the property. And there are no qualifying, financing, or credit statements.
There's less competition.
Due to a lack of knowledge most real estate investors are terrified of this strategy and do not understand the benefits of the high yielding opportunity. But to the few who know the secrets, tax lien properties present a semi-passive means in which to establish short term benefits with long term goals.
Tax foreclosures are a low risk strategy and your investment is protected by the law and backed by the government. It's a solid investment strategy that's been around for 200 years, even longer than the stock market. The strategy was originally created by our government (Love the USA) to help local municipalities.
Plus, the government does most of the work , like the accounting, notifying, and collecting the money. Basically, you just sit back and wait for your check from the county government to arrive.
When everyone hears foreclosures they immediately think of a mortgage foreclosure. And basically it's the same principle but different rules and laws because this is a foreclosure due to past due property taxes not paid in full.
Recently there has been an increase in property owners who cannot pay their real estate taxes. When this happens a tax lien certificate is issued and the county sells off the certificate at auction. The property tax sales auctions are held at different times and large counties have weekly auctions.
It's not only residential family properties that end up as tax foreclosures, you can also bid on cell towers, warehouses, docks, easements, and right of ways. Corporations sometimes forget to pay their property taxes and this can be quite lucrative for the investor who is able to recognize the opportunity.
All the information about property tax sales is public knowledge.
Shop & bid online get all the info at the County Tax Assessor's Office. However, some counties, very few have not updated and still demand that you are present to bid. Skip those counties, there's easier fruit to pick.
Do your due diligence, research and evaluate the property.
Always double check the information for IRS liens, bankruptcy, environmental and other issues before you bid. If you live out of the county use Google earth to view the property and surrounding neighborhoods. Also, pay close attention to the sales bidding and redemption rules, they vary form county to county.
With a tax lien certificate (TLC), you are NOT actually buying the real estate, you are buying the first position lien on the property. The real estate becomes the security for the certificate which transfers the government's right to receive the tax money owed over to you - including fees, interest, and penalties.
When the tax lien certificate debt is paid, the investor gets their money back plus interest. Depending on the state, fixed interest rates can range from as low as 15% per year to as high as 32%.
97% of all Tax Lien Certificates are paid off within two years.
And the other 3% of the time ... The investor still makes out because if the owner does not pay back the money owed on the tax certificate, then the investor gets the entire property, free and clear. All the investor has to do is file some paperwork.
Our faves are tax deed sales (TD) because it's then that the government will sell the actual property to the highest bidder regardless, of any mortgages, liens, or anything else owed on the property.
Almost all existing liens are automatically wiped out giving the investor the property for the price of the past due taxes. There are some exceptions, check your state. IRS liens and student loan judgments are two types of loans that can never be washed away.
The drawback: all sales have a right of redemption period, check with the county you're investing in for the specific length of time.
Tax foreclosures are a predictable and secure real estate investment strategy that will generate passive cash flow and build your investment business.
Tax Foreclosures To Systems & Solutions