Today, I’ll be discussing tax lien properties lists, and the topics I’m going to cover are:
- The Overlooked Market of Tax Delinquent Property
- Tax Lien Certificates Pay High Rates of Interest
- Counties Auction Tax Delinquent Property
- Tax Lien Investors Should Do Their Due Diligence
- What Are You Buying When You Purchase a Tax Lien Certificate?
- Re-auctions on Tax Lien Properties in Florida
- Learn More About Tax Lien Investing
I’m Ted Thomas, and for the past 30 years, I’ve been involved in tax lien properties and tax lien properties lists. Across the United States you will find millions of property tax liens. The lists are published on the county website, and they’re announced in the local newspaper.
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The Overlooked Market of Tax Delinquent Property
Today I’ll tell you more about tax lien property lists and the who, what, where, when, and why of property tax lien certificates.
For investors tax liens are an alternative investment. Thousands of investors participate in the auctions, and the market is overlooked because most real estate brokers and agents rarely promote or discuss tax lien certificate properties or the tax lien properties lists.
My educated guess is agents and brokers do not receive commissions for referring people to the county to purchase tax lien certificates, so of course, the majority of people aren’t aware of the tax lien properties lists.
Tax Lien Certificates Pay High Rates of Interest
What’s going on here? The United States is divided into over 3,000 counties. Approximately half of those counties will auction tax lien certificates.
Tax lien certificates pay generous, almost outrageous interest rates. For example, Arizona pays up to 16%. Florida pays up to 18%. Iowa pays up to 24%, and Illinois pays up to 36%.
Those that know how to do this business have a competitive advantage over their colleagues who are uneducated and maybe putting their money in bank CDs at very low interest rates.
Counties Auction Tax Delinquent Property
The background on tax lien property is as follows: Each state is governed by a legislature that sits in the state capital. The legislature makes laws that require property owners to pay property tax.
Property tax revenue is very important to the local county because it’s the main source of income to pay county employees, the sheriff’s department, fire department, schools, and schoolteachers.
The legislature passes the rules down to the board of supervisors or commissioners who manage the county, and the legislature has mandated that the county demand and collect taxes.
The county treasurer will levy and then attempt to collect property taxes. If the treasurer is unable to collect property taxes, the treasurer is authorized to seize the property, sell it at a public auction and use the revenue from the sale to recoup the delinquent taxes.
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Tax Lien Investors Should Do Their Due Diligence
In about half of the counties, the treasurer will not seize the property, and this causes confusion. These counties by law issue a tax lien certificate, which allows the property owner time to pay the property tax.
A tax lien properties list would be on the county website, and an auctioneer from the county treasurer’s office will sell tax lien certificates to the public online and offline.
Thousands of investors invest directly with the county when they purchase tax lien certificates.
The purchaser of a tax lien certificate is required to perform their own due diligence prior to bidding. The buyer must understand what they are purchasing.
For example, have they looked at the property and know its condition? Do they understand other encumbrances that might be attached to the property?
The tax lien once it is filed by the county is a formal attachment, a lien or encumbrance on the real estate. The property is no longer saleable until the tax lien is cleared, in other words, paid. Banks will not refinance the property until the tax lien is paid in full.
What Are You Buying When You Purchase a Tax Lien Certificate?
It’s important that the tax lien certificate purchaser understands they are not purchasing a property; they are purchasing a lien on the property. They are buying the county’s encumbrance on the property.
The investor at a tax lien certificate auction is not purchasing real estate! The purchaser does not gain possession of the real estate immediately. Until the certificate has matured, the defaulted property owner will stay on the property, and this could be as long as two years.
If the tax lien certificate matures and the property owner fails to come forward and redeem (pay the tax lien plus interest), then in most states, the property owner will lose the property to the tax lien certificate purchaser.
Re-auctions on Tax Lien Properties in Florida
Florida law requires a second auction, called a tax deed auction, where the property will be sold to the highest bidder. The original buyer of the tax lien certificate will either receive payment after that auction, or if there is no bidder, they will receive a deed to the property.
For clarity, the original investor is not paid in Florida when the tax lien certificate matures. The original investor must request the county re-auction the property at a tax deed auction.
If the property sells at the tax deed auction, the original bidder will be paid 100% of capital plus the interest. In Florida, if the property is unsold at the second auction, the original bidder will gain ownership of the property.
Learn More About Tax Lien Investing
This is a point where many student investors become confused and discouraged. Successful coaches and mentors are almost a miracle. This is why I say your best investment money is in education.
Why? Because you don’t know what you don’t know. In my own experience, when I started asking successful people for guidance and they shared their answers, I took time and made notes. If you’re not talking to a coach, you’re missing the boat.
We hope you enjoyed Ted’s lesson, “A Tax Lien Properties List Is a Goldmine”
Counties auction tax lien certificates, which pay interest rates as high as 36%, and they’re secured by real estate, making tax liens a low-risk, high-yield investment. However, before you can buy one, you need to acquire a tax lien properties list.
You can find a tax lien properties list on the county’s website, and the lists are also published in the local newspaper.
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.