Today I’m answering your question about buying tax lien homes for sale, and I’m going to tell you about:
- Buying Property for Back Taxes With Tax Lien Investing
- Getting Tax Lien Properties for Pennies on the Dollar
- Profiting From Buying and Selling Tax Lien Property
- How Counties Recover Delinquent Property Taxes
- The Redemption Period for Tax Lien Certificates
- With Tax Lien Investing Risks Are Low
- Acquiring Real Estate From Unredeemed Tax Lien Certificates
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Buying Property for Back Taxes With Tax Lien Investing
I’m Ted Thomas, and for more than 30 years I’ve been involved as an investor and entrepreneur in tax lien certificates and tax defaulted properties.
Imagine for a moment purchasing a real estate property, a single family home or condominium or even a small commercial building for 5 cents to 10 cents on the dollar. Of course you’d find that hard to believe, but it’s happening even in the strong real estate markets.
Today’s lesson is about tax lien homes for sale. Local counties across the United States have tax lien certificates, and I’ll reveal how they’re sold to anyone who attends the auction, which could be online or offline, and pays the back taxes.
I’ll also include some interesting examples based on my previous experience, so you can get an idea of how I’ve been able to help others.
Getting Tax Lien Properties for Pennies on the Dollar
Tax lien homes are in default on property taxes, and the local county government gives those homeowners notices of default due to non-payment of taxes. Most property owners will pay the defaulted property taxes plus penalties, but not all.
For example, in South Carolina, my student investors pay the defaulted back taxes on homes that have values of $200,000, then the homeowner fails to pay the delinquent taxes or come forward and redeem the tax lien certificate which the county has sold to one of my student investors.
If the owner fails to pay the property taxes, and you, as the investor, DO pay the property taxes, you will receive a tax lien certificate. This gives you rights in that property.
If the owner that defaulted does not come forward and redeem, in other words pay the property taxes, there will be consequences.
The consequence is the county will foreclose on the property, and then deliver a deed to the property to the investor who purchased the tax lien certificate.
Of course, this sounds too good to be true, especially if you only pay a few thousand dollars in taxes and the property was worth $200,000.
Profiting From Buying and Selling Tax Lien Property
If you could buy slightly used and abused tax lien homes for sale for 10 cents or 20 cents on the dollar, then put signs on the front lawn and small ads online and sell the property quickly for 50 or 60 cents on the dollar, do you think you could consistently profit?
I’ll tell you about one of my recent students in Phoenix, Arizona who paid the defaulted taxes and received a tax lien certificate. This was a huge windfall of money because the property owner never came forward to redeem.
Prior to purchasing the tax lien certificate, the student investor inspected the property, took pictures, and checked comparables in the area where other property values in the neighborhood were $180,000.
I have a free gift for you that will show you how to profit with tax lien certificates and reveal the secrets of tax deed investing. Be sure to get your FREE gift today.
How Counties Recover Delinquent Property Taxes
Let’s talk more about tax lien homes for sale. To give you a little background, across the United States we have over 3,000 counties.
The local county needs revenue from property taxes to maintain the infrastructure and pay school teachers, police, firefighters and county employees. If the county were not able to collect property taxes, the bills would go unpaid.
All 50 states are governed by a state legislature that enacts laws to help the local county governments, and the law is that all property owners must pay property taxes.
If the taxes are uncollectible, the county treasurer is authorized to seize the property and then sell it at a public auction to the highest bidder. Generally, the starting bid at the public auction is the delinquent back taxes.
The Redemption Period for Tax Lien Certificates
Approximately half of the counties will auction off tax lien certificates at public auctions, and these auctions are announced on the county websites and in the local newspaper.
These counties are benevolent. They don’t kick the people out of the property. However, they do issue a tax lien certificate. The certificates are sold to the public, and the county pays outrageous interest rates on tax lien certificates.
The county government gives the property owners a long period of time to recover and ultimately bring their taxes current. Many counties will give the delinquent owner one year, two years, or maybe even three years.
With Tax Lien Investing Risks Are Low
Most investors want predictable, certain, and secure investments. In most instances, tax lien certificates meet that requirement. The investor invests with the county and ultimately receives money from the county when the taxpayer redeems by paying the tax lien certificate.
As a new investor, I know you’re worried that you won’t get paid. However, this investment has been available for 200 years, and it works.
If the property owner will not pay, the county government will protect your interest by allowing you, the investor, to take the property via a legal foreclosure. You will end up owning the property for pennies on the dollar, basically the back taxes plus attorney fees.
I’ll say that again. If you don’t get paid on a tax lien certificate, the county has authorized in advance for you to take the property, and you will do so with no mortgage or deed of trust loan.
Acquiring Real Estate From Unredeemed Tax Lien Certificates
Here’s how you can make big profits from tax lien homes for sale. If you paid back taxes of $5,000 for a property valued at $50,000 and the property owner did not pay the taxes, then after a legal process:
- The judge would reward you with the property.
- The county would delete the mortgage or deed of trust loan.
My students Drew and Recia purchased a tax lien certificate and paid the attorney. The total investment was $11,000. The property was valued at $180,000. They sold the property, and after paying commissions to Zillow, they earned $169,000.
We hope you enjoyed Ted’s lesson, “Tax Lien Homes for Sale”
You can get tax lien homes for sale at local county auctions where the bidding begins near the amount of the delinquent back taxes. When you purchase a tax lien certificate, you get paid an interest rate of up to 36% or you get the property without a mortgage.
If you’d like to know more about tax delinquent real estate 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.
You can learn how to reap the huge rewards from tax lien and tax defaulted property 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.