Are you looking into investing in tax liens and wondering how much do tax lien certificates cost? Then you’re in the right place. Ted Thomas can get you on the path to success!
Learn how much you can make by investing in tax liens even if you don’t have a lot of money!
Get ready!! We are going to discuss the safe, secure and predictable tax lien certificate investment.
Everyone wants investments that are predictable, certain and secure.
I’m Ted Thomas, and I’m going to share with you how to make money with small investments that grow to large retirement funds.
Today I’ll be answering the question, “How much do tax lien certificates cost?”
First, I’ll give you foundational information so you know what you’re buying when you purchase a tax lien certificate.
I have a gift for you, so be sure to take advantage of it. Learn how to find and profit from tax liens and tax deeds with this FREE streaming video Mini Course.
HOW MUCH DO TAX LIEN CERTIFICATES COST? – PROPERTY TAXES
The process of tax liens and tax deeds was invented at the state legislature which cooperated with the local county governments.
The reason for the tax lien or tax deed is that many property owners fail to pay property taxes. Many forget or try to avoid the taxes. Let’s face it. People don’t like to pay taxes.
In some instances, property owners move, and they forget to make a change of address. Sometimes the inevitable occurs and people pass on, then there’s no one there to make the tax payment.
Property owners are required by law to pay property taxes.
HOW MUCH DO TAX LIEN CERTIFICATES COST? – PROPERTY OWNERSHIP
The government of the United States is a republic, and the republic allows freedom of ownership.
Once you own a property, you can sell it, rent it, or subdivide it. Maybe you’d like to grow crops on the land or graze cattle. It doesn’t matter. You have freedom to do as you choose.
However, property taxes must be paid or the property owner forfeits the property to the local government. It’s the law of the United States.
HOW MUCH DO TAX LIEN CERTIFICATES COST? – TAX LIEN CERTIFICATES
Approximately half of the states, when taxes are unpaid, will sell tax lien certificates on properties that are delinquent on property taxes.
That simply means the county will allow the property owner to stay on the property even though they are in default, and the county will issue a tax lien certificate which anyone can purchase to pay the taxes on that property.
The county treasurer was authorized by the state legislature to levy property taxes, collect taxes, and if the tax is not collected, the treasurer is authorized to confiscate the property and resell it at a public auction.
The treasurer has been given this power, this authority, by the state legislature.
Once the default takes place, the only way to stop the default is to pay the taxes.
HOW MUCH DO TAX LIEN CERTIFICATES COST? – TAX LIEN INTEREST RATES
Tax lien certificates pay outrageous interest rates, in some cases, up to 36%.
The treasurer will announce the tax lien certificates for sale and publish a tax lien properties list in the local newspaper and also on the county website.
Anyone with money can purchase a certificate.
Tax certificates pay different amounts in different states. In Arizona it’s 16%, Florida 18%, Iowa 24%, and Illinois 36%.
Want to learn how you can make big profits from bargain real estate? Would you like to buy homes for pennies on the dollar? Or earn double-digit interest rates? Then you don’t want to miss this FREE mini class.
HOW MUCH DO TAX LIEN CERTIFICATES COST? – REVERSE AUCTIONS
The interest rates I just stated are the maximum. In many states, the certificates are bid down to lesser interest rates, and the rules in each auction are posted.
For example, a $2,000 tax lien certificate in Florida could earn a maximum rate of 18%. However, there may be more than one bidder.
At the reverse auction, the second bidder would bid a down bid of 17 ½%. The next bid would also go down to 17%. In a highly competitive auction, it could go down to ¼%.
Savvy investors make plans pre-auction and know exactly what rate they will bid.
For example, if you require a 10% return, you would not go below 10%, if someone bid 9%, then they would get the certificate. There are many strategies.
HOW MUCH DO TAX LIEN CERTIFICATES COST? – CALCULATING THE COST
So how much do tax lien certificates cost?
Property taxes are generally 1% or 2% of value. For example, a $100,000 home will have property taxes between $1,000 and $2,000 annually.
Another example is a rural piece of land. Let’s say it’s 1 acre, and it’s valued at $3,000. A 1% tax would be only $30.
The point is a tax lien certificate could be purchased for pennies, however, when it’s redeemed and paid for, you would only earn $30 or $40.
HOW MUCH DO TAX LIEN CERTIFICATES COST? – GETTING A PROPERTY
If a tax lien certificate is not redeemed, that simply means the property owner has forfeited the property to the county. In the real world, the county does not want property. The county wants tax money, revenue to pay their bills.
The county will award the property to the tax lien certificate holder. Note that this is an oversimplification. There is a process involved.
HOW MUCH DO TAX LIEN CERTIFICATES COST? – A MORTGAGE-FREE PROPERTY
The treasurer has the authority and the power to clear any mortgage or other lien from the property and award the property to the tax lien certificate purchaser.
On the surface, this appears to be amazing. However, it’s the law.
HOW MUCH DO TAX LIEN CERTIFICATES COST? – AN EXAMPLE
I’ve had students purchase tax lien certificates with small investments, $11,000 for example, which was the amount of the taxes on a $180,000 condominium.
The homeowner failed to pay the delinquent taxes. In other words, they failed to redeem.
The students held a tax certificate which they purchased for $11,000, and the county awarded them the property with no mortgage!
This sounds unbelievable. However, the rules and the law are clear.
TAKEAWAY
We hope you enjoyed Ted’s lesson, “How Much Do Tax Lien Certificates Cost?”
About half of the states sell tax lien certificates, and tax lien certificates interest rates by state vary. The interest paid on a tax lien certificate could be 16%, 18%, 24%, even up to 36%, depending on the state.
Note that these interest rates are the maximum. Many states sell tax lien certificates at reverse auctions where the interest rate is bid down.
Tax lien certificates are sold at close to the amount of the back property taxes owed. To get an idea of how much a certificate could cost, property taxes are around 1% or 2% of a property’s assessed value.
When you purchase a tax lien certificate, you either get all your money back plus the high rate of interest, or you get the property without a mortgage.
How much do tax lien certificates cost? You could get one for $50 or $50,000. There are millions of tax lien certificates available in amounts to suit every budget. Anyone can do this, and you don’t need a lot of money to get started.
Are tax lien certificates risky? While all investments have some degree of risk, this a highly profitable passive investment that’s secured by real estate and among the safest investments in America.
If you’d like to know more about investing in tax delinquent property, there’s no one more qualified to teach you than Ted Thomas, America’s leading authority on tax lien certificates and tax defaulted property investing.
Ted Thomas is the only one who provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops & web classes, and personal coaching.
If you’d like to get started today, you can begin now at no cost by taking advantage of Ted’s FREE Master Class. It’s only about 1 hour of streaming video and will open your eyes to the incredible opportunities available in tax lien and tax deed investing.
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