Learn How To Buy Real Estate Tax Liens for returns of 16%, 18%, 24%, and even up to 36%. Buying property tax liens is safe, and they’re secured by real estate. This is an excellent passive investment, and it’s benevolent, a win-win.
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Today I’ll answer your question, how to buy real estate tax liens.
My name is Ted Thomas. For the past 30 years, I’ve been involved in tax lien certificates and tax defaulted property. I started out as an investor, and then I slowly became a teacher, a mentor and a guide.
I’ve been teaching and mentoring people for a number of years on how to buy property with delinquent taxes, and I have certified coaches that help me do that.
You can learn this business in a very short period of time. Anyone can do it.
This is a very profitable business when you know how to do it.
THE RULES OF BUYING PROPERTY TAX LIENS
So who makes the rules? Well, the local state legislature makes the rules. and they’ve been established well over 200 years.
First of all, the legislature of the state makes the rule; they pass it down to the county, and the county does everything from there on. It’s the county treasurer who conducts these auctions, and they have a lot of power.
Once you learn how to do this, you’re going to find it’s a very easy business, and you can do it for the rest of your life.
I have a gift for you. Get the FREE Safe Haven course (valued at $197) and get your learning on the fast track today.
ABOUT PROPERTY TAX
So this lesson is all about how to buy real estate tax liens, and this business has been around for over 200 years.
It’s administered and mandated by the local counties. What’s happening is many people are not paying their tax. What tax are we talking about? We’re talking about a property tax.
Everything in the county is taxable except the churches and the schools. That means if you had a home, a farm, a ranch, or agricultural property, it wouldn’t matter what it was, it’s always going to be taxable.
BUYING REAL ESTATE TAX LIENS IS A BUSINESS OF ABUNDANCE
There are over a hundred million taxable properties in the United States. About two and a half percent of those properties will end up in some sort of delinquency.
So two and a half percent of a hundred million is 2.5 million tax lien properties for sale.
2,500,000 properties are going to go into default. That’s a business that has a lot of abundance. So once you learn how to do it, you’re going to be able to make yourself a lot of money.
HOW TO BUY PROPERTY TAX LIEN CERTIFICATES
What am I talking about today? I’m talking about how to buy real estate tax liens, or tax lien certificates.
When you go into default and don’t pay, they’re going to send many notices to you that you’re in default, and they’re going to tell you the consequences of not paying taxes.
If a property is in default, they’re going to issue a tax lien certificate. Those certificates are available at auctions. There are live auctions, and there are online auctions.
Half of the states, the tax lien states, will sell tax lien certificates.
Now, why is the government selling those tax lien certificates? Well, the government needs money. They don’t want any more property.
What do they need money for? Well, they want to pay the police, the firefighters. There are a lot of county bills to pay, including taking care of the schools and hiring and paying for the school teachers.
So the county will issue a tax lien certificate.
How did they get to do that? The legislature passed rules, and the rules are pretty severe if you don’t pay taxes.
TAX LIENS VS TAX DEEDS
When it comes to taxation, if the owner doesn’t pay the tax, the treasure is authorized to levy the tax and also authorized to collect the tax.
If they can’t collect the tax, they’re going to either issue a tax lien certificate, or they’re going to confiscate the property. It’s going to be one of the two.
They do that after issuing many notices of default that explain the consequences to the property owner.
The consequences are:
- A tax lien certificate in the tax lien states, or
- Confiscating the property in a tax deed state
In a tax deed state they’re going to seize the property. When they seize the property, they kicked the owner out. They evict them, and they’re going to sell that tax lien property at a tax auction.
TAX DEFAULTED PROPERTY AUCTIONS
If the county seizes the property, then shortly after that seizure, they will put the property up for auction.
They’ll make a list of those which you can find online, and you can also find them on the county website.
What do they want for that property? Well, they sure don’t want top dollar. They want to get rid of it. So they’re going to auction the property at somewhere very close to the property taxes that were unpaid.
In other words, the delinquent property taxes are what they want. They want to collect those delinquent taxes, so they will sell for a number very close to that.
These tax auctions are public auctions. They will be done in either a public building, or in many cases, right on the courthouse steps. They announce those in the newspaper. They also announce those on the site.
Anybody can go to this auction. Anybody can qualify to buy.
Can you buy a house by paying the back taxes? Yes, you can. All you need is money to pay those back taxes, and then you’ll end up with either a tax lien certificate or a tax deed.
The money that comes into the county when they sell the tax lien certificate is used to pay the county employees, the police, fire department, to keep the doors open at the hospital and even to run the schools.
All that money comes from property taxes. It’s the law of the land. Everybody must pay their share of property taxes or they forfeit the property.
A TAX LIEN PROPERTIES LIST
So we’re talking about how to buy real estate tax liens.
It’s easy to do a property tax lien search for a list.
You could pick up the phone, or you could go to, for example, the Miami-Dade website, and they would have a list of all the tax lien certificates. More than likely they will put that list in the newspaper.
A place like Miami-Dade could have 65,000 tax defaulted properties. That means people did not pay the tax.
At a place like Cook County, Chicago, I’ve seen lists and been at auctions where there were over 100,000 properties in default. They issued a tax lien on 100,000 certificates. All were available.
In some of the smaller cities, where people really do pay the taxes quite well, places like Maricopa County or Phoenix, Arizona, they’d have about 30,000 certificates.
My point in telling you all of this is that this is a business of abundance. There will always be too many certificates, and there will always be too many properties and tax delinquent homes for sale.
TAX LIEN STATES
Today we’re answering the question how to buy real estate tax liens. Approximately half of the states will be called tax lien states. In those states, when the property owner does not pay the tax, they will sell a tax lien certificate.
That owner will have been given many notices of default, notices telling them the consequences, notices warning they’re going to issue a tax lien certificate.
Tax lien states are very benevolent states. They don’t throw people out on the street, so the people will be in the property and on the property. You do not get the property immediately in a tax lien state.
As I say, they’re benevolent. They didn’t throw the people out.
So why were they there? Well, it’s a world of the weird. I don’t know why they get in that situation.
Maybe they had a sick child. Maybe they were sick themselves, or maybe they lost their job or there was some kind of accident, but they didn’t pay their taxes.
The county is interested in only one thing, and that’s a collection of property taxes, but they’re very benevolent.
TAX LIEN CERTIFICATE INTEREST RATES
Is buying tax liens a good investment? Absolutely!
They will sell the certificate, and an investor like you and I can buy the certificate and earn outrageous interest rates, 16%, 18%, 24%, up to 36% interest on a tax lien certificate, depending upon the state where you buy it.
How do you win the tax lien certificate? The bidding process is always different in each state, so you need to understand that.
Some have a bid down process. For some, part of the property size can be the determining factor. It can always be different.
All this takes place in a public arena. All the auctions take place where you can see it all happening. When they sell the property, you will not get a property, you’ll get a tax lien certificate.
That certificate will have a time limit on it. If the people don’t pay, you will end up with the property.
We’re talking about how to buy and when to buy tax lien certificates. You buy them at the auction online, or you buy them offline. Either way, you’ll own the certificate until they pay.
95% or 97% will pay their tax certificate within two years.
A MORTGAGE-FREE PROPERTY
If they don’t pay you, then you will get that property without a mortgage.
Let me say that again. You will get the property without a mortgage, and that’s one heck of a way to own a property because you only paid the back taxes.
I said the rates were outrageous, and that’s exactly what I meant.
When the tax certificate is sold, it will have an amount that you bid and you won based on that.
What are the best states to buy tax lien certificates? If it were in Illinois, you might be earning all the way up to 36% on your money. In Florida, it could be 18%. Arizona could be 16%. You’re getting the idea.
So tax lien states are benevolent. They don’t throw people out. That means if they don’t throw them out, you don’t get possession of that property until the time limit elapses.
The county will report that 95% to 97% of those certificates are going to pay you back all your money plus that outrageous interest rate.
If you make that outrageous interest rate, that means you’re going to be making a lot of money on these tax lien certificates. If you invest $10,000, $20,000, $50,000, you’re always going to make that high interest rate.
So today I’ve been talking about how to buy real estate tax liens. In other articles, I’ll tell you about how to buy tax defaulted property or tax deeds.
WHO CAN BUY A TAX LIEN CERTIFICATE?
Who can buy a tax lien certificate?
Well, if you’re a little old lady, you can buy one. If you’re a 16-year old, you can buy one.
It doesn’t matter. All they want is your money.
Anybody can go to a tax lien auction and purchase a certificate, though you’re going to need money to do it. That’s who can buy it.
HOW MANY TAX LIENS CAN YOU ACQUIRE?
How many tax liens can you acquire? I’ve had clients acquire 700 to 800 tax lien certificates.
You can get as many as you want. You can just keep adding them up, and you’ll keep getting checks as a result.
As I promised you earlier, I have a FREE gift for you. It’s called Safe Haven, and it’s going to tell you all those secrets about how to buy real estate tax liens and tax defaulted property or tax deeds.
With tax deeds, you get the property. Those discounts are usually 60%, 70%, 80%, and in both of those incidences, you buy properties without, I’m going to say that again, without a mortgage.
COMMON MISTAKES TO AVOID
What are the risks of buying tax liens? Two quick things I want you to be careful of. Don’t make these mistakes at auction.
Number one, don’t buy a property you haven’t looked at. Why? What if there was a hurricane? What if there was a windstorm? What if it had caught on fire? What if it was next to a chicken farm?
You don’t want to buy any property you haven’t looked at.
The second big mistake that happens at auction happens because everybody’s excited, so they start bidding when they don’t have an exit strategy.
If you don’t know what you’re going to be sell it for, I’m going to tell you don’t bid. Otherwise, you could keep bidding, and you might go right past the value of the property.
So don’t bid on a property unless you’ve looked at it and unless you have an exit strategy. I’m Ted Thomas.
HOW TO BUY REAL ESTATE TAX LIENS: CONCLUSION
We hope you learned a lot from Ted’s lesson, “How to Buy Real Estate Tax Liens.”
Tax lien certificates are one of the safest investments, yet they pay extremely high interest rates, up to 36%. They’re secured by real estate, so if you don’t get paid, you get the property. And you get it mortgage-free.
Tax lien certificates are sold in about half of the states, and they’re also benevolent. They don’t evict the property owner. They give them a chance to pay the back taxes, and over 95% of them will pay.
Tax lien certificates are an excellent passive investment, and the checks you receive come from the government.
There are millions of tax lien certificates available, so this is a business of abundance, but you must know what you’re doing to avoid making common mistakes.
There’s no one more qualified to teach you how to buy property with delinquent taxes than Ted Thomas, America’s leading authority on tax lien certificates and tax defaulted property investing.
Ted has been teaching for over 25 years and is famous for showing his students how to earn 6-figure incomes within a year of finishing his training.
Ted is the only one who offers full support with home study courses, live workshops and web classes, Q&A webinar sessions, and personal coaching.
If you want to learn more about how to buy real estate tax liens, you can start your education today and do it for FREE with the Safe Haven Investor System course (valued at $197).
Safe Haven is 2 hours of streaming videos and a 100-page illustrated manual that teaches you how to buy real estate tax liens and tax deeds. So get a head start, and get your FREE Safe Haven course today.