THE LEASE OPTION TAX DEED STRATEGY
Look no further than the Lease Option Tax Deed if you want to make even BIGGER money with tax deeds. How would you like to get 100% for that property you got for pennies on the dollar? Ted Thomas can show you how with a lease option tax deed.
Watch the video above or read the summary below:
Today I’ll explain a strategy that can make you even more money with a lease option tax deed.
I’ve been involved in the tax lien and deed business for 25 years. I’m going to give you some real insight today.
We’re going to talk about the lease option tax deed and how you can profit from it.
This is going to be kind of exciting for you because, when I say lease option tax deed, that opens up a whole new world of money-making opportunities. You are definitely in the right place.
If you want to buy tax defaulted property at auction, you’re trying to be a bargain hunter. That’s what this business is. You’re a bargain hunter trying to get a property for 10, 20, 30 cents on the dollar. We’re going to talk about that.
I’m also going to talk about the big mistakes that I want you to avoid at tax auctions. It doesn’t matter whether you’re a newcomer or whether you’re experienced, people make this mistake everyday, and they lose hundreds of thousands of dollars.
WHAT IS A TAX DEED?
Let’s get back to the lease option tax deed. First of all, let’s figure out this tax deed thing, then the lease option tax deed I’ll just attach to it.
You’ll see it’s another way to make money that the average guy out there doesn’t even know about. This could be your ticket to being a millionaire, that’s for sure.
Tax deed buying is really bargain hunting, as I’ve said. How do we end up with tax deeds? We end up with tax deeds because many people don’t pay their tax.
When they don’t pay their tax, in half of the states, what they’re going to do is confiscate that property. They’re going to seize it, and the treasurer does that.
Once the treasurer has confiscated the property, then they wipe out the mortgage. They don’t tear it up They wipe it off the property, and then they put it out for auction.
When they put it out for auction, the revenue from that auction is going to pay for the county’s bills. So that’s a good thing for the county.
When you go to one of these auctions, or you’re in the tax lien and deed business, you’re helping your local county. When you’re doing tax liens, you’re even helping the home owner.
In this case, we’re going to talk about a lease option tax deed.
A TAX DEED AUCTION
You go to this auction, and when you buy at the auction, you want to buy for 10 cents, 20 cents, 30 cents on the dollar.
You can pay more than that, but let’s take a $100,000 property. If you get it for 30 cents, well you get a lot of margin between 30 cents on the dollar and 100 cents on the dollar.
The counties do maybe one auction a year in the small counties. The big counties might do more than that, but they can do as many as they want. They’re authorized to do at least one.
When they do that one, you want to be there. If nothing else, just to be an observer.
The counties that do one auction want to get that money in quickly, then they want to pay all the county’s bills with it. The counties that have a lot of properties and a lot of money, they wait and do one great big auction every year.
Here’s how the process works. First of all, the legislature tells the treasurer at the county, you must collect taxes. The treasurer sends out bills, then after they send the bill out, they collect the taxes. After that, if people don’t pay, they confiscate the property. That’s how that system works.
But what about you? You want to know how you’re going to make money. Here’s how.
There are about 3,000 counties in the United States. Half of them sell tax liens right away, and the other half sell tax deeds.
A LEASE OPTION TAX DEED IS A GOLD MINE
Let’s learn about this lease option tax deed. The property is sold to the highest bidder. Don’t go down there and spend 90 cents on 100. Don’t go and spend 90%. Try to get it at 20 or 30 cents on the dollar.
How does a lease option tax deed work? Well, this is where you make the big money.
Obviously, if you could buy a property for 30 cents on the dollar, if you followed my system, I would say, buy it for 30 cents, sell it for 50 cents, and get rid of it. Now you get your cash flowing.
Most of my clients want cash flow, but if you already have money, here’s a little gold mine for you.
This could be a big gold mine for you because if you could buy it for 30 cents on the dollar, you could sell it for 100 cents on the dollar if you offered financing.
WHY USE A LEASE OPTION TAX DEED?
Why? Because there are thousands of people. Some people tell me 25%, even 30% of all the people that want to get a mortgage don’t qualify at a bank.
Why don’t they qualify at the bank? Credit scores. If they don’t have a good credit score, the bank says “No way, we don’t want you,” right?
What if you just got a divorce? Well, nobody wants you then, right? You can’t get any money. What if you had been through a bankruptcy? Nobody wants you. None of these banks, none of the institutions want you.
What if you were the seller, and you could sell with financing? Well, that would change the whole ball game.
I have one client that works with me, now a coach. Doing just what I’m going to tell you about right now, he bought the properties and sold them with a contract.
He did 60 properties in 60 months. Think about that. He doesn’t have a worry in the world. He’s getting checks from all these properties now.
How does this lease option tax deed work? When you bought a tax deed, you got a bargain. If you bought it for 30 cents on the dollar, there’s a lot of difference between 30 cents on the dollar and 100 cents on the dollar.
WHAT IS A LEASE OPTION TAX DEED?
With a lease option tax deed, when you sell, you can sell it for 100 cents on the dollar, and just offer financing. When you offer financing, that’s nothing more than saying, “All right, I’ll lease the property to you.”
Some people call it a rent-to-own.
Do a lease and give them an option to buy it, if they have good credit, and they keep paying you on time. It’s nothing more than an installment sale.
You’ve been buying refrigerators that way. You bought your first car that way. You pay off your bills that way. Installment contracts have been around for decades.
That’s all the bank does is make an installment contract, but all they want is good people at the bank. Some of us aren’t good if we’ve been through a divorce.
Now that doesn’t mean we’re not good forever. It just means for a few months we have bad credit, or maybe someone ran up the credit card bills and didn’t pay them.
People that don’t have good credit need help. That’s about 25% of the market. So you could buy the property at a low price at a tax deed auction, but you could still sell it at the high price, if you wanted to, and get payments on the full amount.
You could get payments on 100% of the money. Happens all day. People have been doing cars this way. They’ve been doing houses this way. It’s just normal. That’s an installment sale. Some people call it a lease option.
HOW DOES A LEASE OPTION TAX DEED WORK?
What’s the option got to do with it? If you did a rent-to-own, it would be the same kind of thing. The option says, I will buy this house in so many months if I want to, or, I’ll buy it in five years if I want to.
You could have whatever you want in the option. It gives you the option to say yes I want to, or no I don’t want to. It’s not anything that holds you back.
It’s a wonderful way for the seller to make big payments, and it’s a wonderful way for the buyer to get in business.
Otherwise, if you’ve got bad credit, what are you going to do if you have a house, if you’ve got two kids with you, or three kids, and you want a house, and you can afford some down, and you can afford some payments.
Well, this is a perfect way to do business. Lease option tax deed is a very, very viable business. If you’ve got good income, you don’t have any problem.
If you don’t have good income, this is going to be a struggle for you. There are a lot of people that have good income that can’t buy a house.
Why? Because they were divorced. Because they’re a small business owner. Whatever it was, they couldn’t do it.
The installment sale with an option to buy works perfectly. As soon as I say installment sale and an option to buy it, you completely understand it, I’m sure. This solves a problem for a lot of people.
A LEASE OPTION TAX DEED EXAMPLE
Let me give you an example. A couple came to me. I taught them how to do it. They bought a property at a tax auction for $8,000, and it was worth much more than that.
It was worth about $40,000 or $50,000, but they bought it for $8,000. They cleaned it up; they tidied it up, and spent about $4,000. Now they had $12,000 total out of their pocket, and what did they do?
The couple sold it on what we just talked about, a lease option tax deed. They told the people, “You can buy the property on a contract from me, and you can own the property starting right now.”
They gave them installments. So the people were more than happy to move into that property because now they could move in at a low price. In other words, a monthly payment and just a little bit down.
The couple I taught how to do this invested $12,000, and over the period they’ll collect $52,000. Let me say that again. They invested $12,000. They sold it, and they will collect $52,000 over the next 10 years.
That’s $40,000 in profit. Just think about that. They put $12,000 in, and they’re going to get $4,000 every year for the next 10 years.
Think about what’s going to happen. They’re making like a 40% return. They’re making big money right away, and you could be doing the same thing.
There are hundreds of these properties available.
LEASE OPTION TAX DEED CONTRACT OF SALE
You can buy these contracts of sale at the stationary store, if you want. You can get them from a local realtor, or you can get an attorney to do it. There are plenty of them.
Most people say, “Just go to a title company, they’ll be more than happy to provide you with a contract of sale.”
You can just go to the title company and say, “I’m going to sell my own property, and I’m going to sell it with a contract.”
They’ll be happy to do that and say, “Well, do you want a payment contract, installment sale, rent-to-own, lease option?” whatever it is.
The title companies have those, and they’ll be a little less than an attorney. I’m not negative about the attorneys, but it drags out.
The title company can do all the work for you. It’s no problem at all.
HOW LONG SHOULD THE LEASE OPTION TAX DEED CONTRACT BE?
How long should the contract be? Well, the shorter the better. You don’t want to do a 30-year contract. Look at me, 30 years I won’t even be here.
I do 10-year contracts all day long. I have contracts where I sell the property, doing it quickly because people want it. And I get payments for as long as I want.
If they want to take it over, then I can just let someone else do all the collections for me. You don’t even have to do the collections. Believe me, people will pay you because they can’t go anywhere else and get a loan.
There’s more than one strategy to make money from tax defaulted property. You could buy low and sell low, or you could use a lease option tax deed.
How would you like to buy a property at 20 or 30 cents on the dollar, and instead of selling it for 50 cents on the dollar, sell it for 100 cents on the dollar? That’s where the lease option tax deed comes in handy.
A lot of people who would love to buy the property you’re selling, just can’t get a loan for one reason or another. A lease option, also called a rent-to-own, makes it possible for them to buy, and for you to increase your profit margin.
If you’ve learned a lot from this, and you want to learn more, I’d like to give you a gift. It’s a home study course valued at $197, that I’ll give to you at no cost.
The course is a quick start program that will teach you the secrets of tax lien certificates and show you how to make the big profits in tax defaulted property, also called tax deeds.
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