Today I’m answering your questions about how to buy a tax lien house at auction, and the topics I’m going to cover are:
- Savvy Investors Can Make Big Profits From Tax Liens
- An Introduction to Tax Delinquent Property
- Tax Lien States Issue Tax Lien Certificates
- How to Buy Houses at Tax Lien Auctions
- Assess the Condition of a Tax Lien Property Before Buying It
- A Case Study of Successful Tax Lien Investing
Want to learn how to buy a tax lien house? Would you like to buy mortgage-free property for pennies on the dollar? Or earn double-digit interest rates secured by real estate? Then take advantage of this FREE Gift.
Savvy Investors Can Make Big Profits From Tax Liens
I’m Ted Thomas, and savvy investors can actually purchase tax lien certificates for pennies on the dollar. Sometimes it’s less than 10 cents on the dollar, and they end up with the property. It’s all legal and ethical, and I will guide you through the process.
Also, I’ll reveal a case history of two of my students, a married couple that purchased a tax lien certificate, and the outcome of their sale turned a profit of over $169,000.
Let’s get started with the basics and review the step-by-step process of how to buy a tax lien house so that you become a savvy investor who can follow in their footsteps and cash those big checks at the bank.
Before I go into depth, I’m not an attorney or a real estate broker. I’m not giving you investment or legal advice. However, I am an investor, teacher and guide with decades of experience.
An Introduction to Tax Delinquent Property
A tax lien certificate is the result of a levy that the local county government makes on a property owner who fails to pay property taxes.
In each state, the legislature governs what goes on in the state and makes the rules and laws which we all follow. In all states, the legislature has mandated that property owners must pay property taxes.
Unfortunately, property owners have financial difficulties from time to time, and these property owners fail to pay property tax.
The local county board of supervisors or county commissioners will mandate that the treasurer levy property tax and then attempt to collect the property tax. If the taxes are unpaid, then the treasurer is authorized to seize the tax delinquent property and sell it at a tax defaulted auction.
All of the states are authorized to have tax defaulted auctions. The rules could be modified and different in each state, and they could also be further modified in each county. Knowing the rules is mandatory!
Tax Lien States Issue Tax Lien Certificates
About half of the states do not confiscate the property immediately. I call these states benevolent because they issue a tax lien certificate which allows the tax delinquent property owner to remain on the property despite being in default on property tax payments.
The county allows the property owner in default to remain in place and sells a tax lien certificate at a public auction. This is a lien against the property, and anyone can purchase a tax lien certificate if they have the money.
If the property owner is able to recover financially before the expiration of the redemption period, they can redeem the tax lien certificate by paying the back taxes plus the penalties owed. Then the county releases the lien on the property, and the tax lien certificate investor receives a 100% return on capital plus the accrued interest on the certificate and possibly some fees.
How to Buy Houses at Tax Lien Auctions
Now, let’s talk about how to buy a tax lien house at auction. Tax liens are sold at public auctions, and anyone with money may attend and buy.
Many auctions are reverse auctions. That would include Arizona and Florida. For example, Florida auctions will start the bidding at an 18% interest rate, and the lowest bidder wins the tax lien certificate auction.
Well-trained investors will choose properties which they believe will not redeem and then purchase a tax lien certificate for only pennies on the dollar. Then they’ll wait.
I have a free gift for you, a special mini course that will show you how to buy a tax lien house and reveal the secrets of tax deed investing. Get your FREE gift today.
Assess the Condition of a Tax Lien Property Before Buying It
We teach student investors to look at the property and know its physical condition by visiting it with boots on the ground. Investors need to be familiar with the property to which the lien is attached.
A poorly maintained property in a slum neighborhood is probably not a good investment because if the tax lien certificate is not redeemed, then as the certificate holder, you may end up with a property that’s not easy to sell.
Know the rules and understand what you’re buying. If you are not trained on how to buy a tax lien house and do not have a coach, you should get one.
A Case Study of Successful Tax Lien Investing
Now, I’ll reveal how one couple followed this system, purchased an Arizona tax lien certificate which was in default, and the delinquent homeowner did not come forward to redeem the tax certificate during the 3 year redemption period.
Mr. and Mrs. D&R, a married couple, used their training wisely. They purchased a tax lien certificate at a public auction, paid the delinquent taxes and continued to pay during the redemption period.
Prior to purchasing the tax lien certificate, they drove to the property and could easily see it was a 2 bedroom, 2 bathroom condominium in a relatively new project. They determined an exit strategy by finding comparables from the same building.
Their exit strategy was to sell at a value approaching $180,000.
When the tax lien certificate redemption period expired, the tax delinquent owner defaulted and made no payments. The judge in the courtroom awarded D&R the property.
They purchased the property for \$11,000 and made a profit of \$169,000.
Conclusion
We hope you enjoyed Ted’s lesson, “How to Buy a Tax Lien House at Auction”
With the proper training, you can gauge whether a tax lien certificate is more likely to go unredeemed. If the certificate is redeemed, you get all your money back plus a high rate of interest. However, if it’s not redeemed, then you get the property without a mortgage.
If you’d like to know more about tax delinquent property investing, Ted Thomas provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops, web classes, and personal coaching with certified coaches.
Learn how to reap huge rewards from tax lien and tax deed investing! Get started today by taking advantage of this Free Gift from Ted. Act now, it costs you nothing and will give you a big head start!
Ted Thomas is America’s Leading Authority on Tax Lien Certificates and Tax Deed Auctions, as well as a publisher and author of more than 30 books. His guidebooks on Real Estate have sold in four corners of the world. He has been teaching people just like you for over 30 years how to buy houses in good neighborhoods for pennies on the dollar. He teaches how to create wealth with minimum risk and easy-to-learn methods.
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