Make Money With Tax Liens

Today I’m answering your questions about how to make money with tax liens, and the topics I’ll be covering are:

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Why County Tax Sales Occur

Local governments, county and municipal, have been auctioning tax lien certificates for 200 years, and savvy investors understand how lucrative this alternative investment can be.

Why do counties sell tax lien certificates? The simple answer is that property owners have failed to pay property taxes, and this act of selling a certificate motivates them to pay. However, a more important reason follows.

The money received from auctioning a tax lien certificate is used by the treasurer to pay county bills, for example, maintaining infrastructure, like roads and hospitals, and paying the salaries of school teachers, firefighters, and sheriff’s deputies.

What Is a Tax Lien and How Can You Buy One?

The legislatures in all 50 states have mandated that the local county board of supervisors or commissioners place a lien on property for overdue or past delinquent taxes.

Depending on the state, if the property owner remains in default, the treasurer is authorized to either confiscate the property or issue a tax lien certificate.

Many ask the question, what is a tax lien certificate? It’s a lien put in place that reveals a debt is overdue to the local county. It’s very similar to having a mortgage or an IOU against the property. Many counties end up with thousands of tax lien certificates available.

The tax lien certificate must be paid in full before the property owner can sell or refinance the real estate.

The local county has been authorized to auction the certificates, and the state determines the interest rates. For example, Arizona certificates will pay up to 16%, Florida up to 18%, Iowa 24%, and Illinois 36%.

When the treasurer sells the tax lien certificate, usually it’s at a reverse auction. In other words, the certificate is sold to the lowest bidder with investors bidding on the interest rate.

tax lien certificates pay high interest rates

What Is the Redemption Period of a Tax Lien Certificate?

The tax lien certificate may be redeemed by the property owner at any time by simply paying the certificate and the interest that the certificate has generated during the default period.

The redemption period is different from state to state. For example, Florida’s redemption period is 2 years, and in Arizona, it’s 3 years.

If the tax lien certificate is unpaid at the close of the redemption period, the certificate holder may foreclose on the property. Foreclosing requires due process of law, which is usually accomplished by using an attorney, although that’s not required.

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Tax Lien Certificates Are Lucrative Passive Investments

How do you make money with tax liens? What happens when you buy a tax lien certificate? The answer is you own a passive investment. Passive means no work; tax lien buying is a “sit on your rusty dusty” investment.

The receipt for paying the tax lien certificate gives the investor rights to the property, but NOT the right to enter the property or bother the property owner in any way.

The county has issued a tax lien certificate, and the certificate passes to the new owner, which is the investor. This requires no work for the investor who now owns a right to take the property in the event that the tax delinquent property owner fails to pay property taxes at the close of the redemption period.

The point I am making is that tax lien certificates are passive; the certificate holder just holds the certificate until the expiration of the redemption period.

The rules are different in each state and each county. This requires research and study.

If you don’t get paid on a tax lien certificate, some states, like South Carolina, will automatically issue you a deed to the property .

In other states, like Florida, you’ll be required to petition the county to request the property be sold at a tax-defaulted auction. This is a second auction.

What Are Over the Counter Tax Liens?

From time to time, tax liens will not sell at the auction.

The county will attempt to resell. However, if they’re unable to sell it, the tax lien certificate will be placed on an over the counter list.

What is an over the counter list? It’s simply a list that the county maintains at the county seat, where investors may purchase across the counter. No bidding is necessary to purchase over the counter tax liens.

What Are the Risks of Tax Lien Investing?

Making money with tax lien certificates is generally considered a predictable, certain, and safe investment.

The investor’s money is transferred directly to the county and is protected by the property tax code. If the property owner pays, which the majority of them do, you will receive your money in return plus a high interest rate.

However, what happens when a certificate is not redeemed? How do you make money with tax liens if the defaulted property owner doesn’t pay? Let’s see.

Making Money From Tax Liens

an example of how to make money with tax liens

A Phoenix couple purchased a tax lien certificate and paid $11,000, which included back taxes and ultimately foreclosure fees. $11,000 was their total investment.

They researched the property prior to bidding and found it was a 2-bed, 2 bath condo located in a nice area, and it was valued at $180,000.

The property was not redeemed by the owner by the expiration of the redemption period.

The Phoenix couple used an attorney, completed the foreclosure, and resold the property for a $169,000 profit.

Conclusion

We hope you enjoyed Ted’s lesson, “Make Money With Tax Liens”

You can make money with tax liens in different ways, purchase them at auction or over the counter. Tax lien certificates pay interest rates of up to 36%. This makes them an excellent investment to consider if you’re looking to keep ahead of inflation.

What happens if a tax lien certificate is not paid? You get the property, and you get it without a mortgage for pennies on the dollar because you purchased it simply by paying the back property taxes.

If you’re looking for a decent return on your savings or nest egg there aren’t many traditional ways to do that in the current economy. However, you can make money with tax liens. You just need a system that’s consistent, safe, and has the potential to make huge returns.

You can make money with tax liens without taking a huge amount of risk, without requiring thousands of dollars of investment capital, and without demanding hours and hours of research and hard work.

If you’re looking for a passive investment that’s low risk and high yield, look no further than tax lien certificates.

If you’d like to learn how to reap huge rewards from 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.

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 teaches how to make money with tax liens and tax deeds

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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The Ted Thomas Difference:
  • Ted is recognized as America’s Tax Lien Certificate & Tax Deed Authority and has been helping people with investing in tat defaulted properties for over 30 years.
  • Ted has built a team of certified coaches that have 70 combined years of auction experience and are available to his students by phone to guide and mentor you to avoid getting overwhelmed or worse, losing money
  • Ted has ironclad PROOF that what he is teaching you does work. With hundreds of successful students providing testimonials and a 4.9 Google rating which is unheard of in this industry.
  • Ted and his staff don’t hide behind a website; they can be reached during office hours at 321-449-9940.

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