Understanding what is a tax lien certificate

Ted Thomas has been in the tax lien business for over 30 years. If you’re a new investor, you might ask yourself WHAT IS A TAX LIEN CERTIFICATE and how it works. This blog post will explain why a tax lien certificate is worth your time and money.

A tax certificate represents a priority lien on a property; it is not a title to the property. Buying a tax certificate does not entitle the certificate buyer to go into the residential or commercial property related to the certificate, nor to get in touch with or pester the proprietor in any manner. Tax certificates are financial investments and NOT a deed to a home or a land.

Understanding What is a Tax Lien Certificate

This type of investment has been around for over 200 years. However, many people don’t know about the opportunity and all that it entails, so Ted is here to tell you!

There are 100 million properties across the United States. Sometimes, the local government finds that people cannot afford to pay their property taxes or refuse to do so.

When people can not afford to pay their property taxes, it affects the county’s ability to pay city employees, the local fire department, etc. The county will notify property owners of default when property taxes are not paid and they are then given a tax lien certificate.

You might be wondering why someone would want to buy a tax lien certificate and pay those taxes off? The answer is quite simple; it is worth your investment. Once a tax lien certificate is created, the information goes public on the county website for people to purchase.

Why A Tax Lien Certificate Should Be Your Next Big Investment Opportunity

Why purchase a tax lien certificate? Why pay someone else’s taxes? The answer is simple; you’re able to make your money back and then some with interest. 

For example, we will use Florida as our primary focal point for tax liens. In Florida or any state, you will be given the money back that you used to pay for the tax lien certificate of a property you bought.

You will get the money back on the tax lien certificate and get an additional 18% in interest. 

This percentage varies from state to state, but in the end, it’s all the same; you are getting the money back and making an additional 18-25%, which is more than just turning a profit. 

If the government does not pay you back for the money you spent on the tax lien certificate, that property becomes yours with no mortgage payment.

Learn More About Tax Lien Certificates

In conclusion, tax lien certificates, are tools sold by neighborhood county and also metropolitan governments as an approach to recouping delinquent property tax because of the homeowner’s failure to pay their financial debt. 

The issuance of tax certificates to investors is commonly done in a public auction setting where the effective bid is determined by the cheapest rate of interest proclaimed or the highest possible bid for money.

Looking for a more extensive definition of What Is a Tax Lien Certificate? See this article from Ted Thomas where you will also find a fantastic free offer.

Please browse our website for more information about this investment opportunity and take advantage of our library of educational videos to start investing today! 

What Is A Tax Lien Certificate
What Is A Tax Lien Certificate

Read the Video Transcript:
What Is a Tax Lien Certificate?

Randy: Well, thank you for joining us. I am sitting here with Ted Thomas who is the tax lien certificate and tax auction authority, or so I’ve been told, and Ted, that’s a heck of a question. The question I have now is what is a tax lien certificate? We’d love to hear.

Ted: Oh, okay. Well, a lot of people don’t know about this investment. It’s been around for 200 years. I didn’t invent it. It’s been around for 200 years. Now here’s the situation. United States has a hundred million properties, okay? Now of the hundred million, they’re all different states, in all different counties, and if people don’t pay their property tax, now I’m not talking about income tax, or state tax, or excise tax, or car tax, it’s a property tax.

Ted (cont’d): If you don’t pay your property tax, the local government has a problem, because how’s the government going to pay the county employees, the fire department, and the police department? So the county now needs to collect the money.

Ted (cont’d): So what they do if you don’t have any money, they do one thing that’s very, very simple, they’re going to say you haven’t paid your taxes. So what they’d do is they would simply put you in notice of default, they’d give you notice of default of your house, and guess what? Then they would issue a tax lien certificate. Looks just like this.

Randy: That’s a tax lien certificate. So what exactly is a tax lien certificate? What do you do with it then? How does that help the problem?

Ted: Okay so, the government issued that, so what they’re going to do is they want to sell it because they need money for taxes. So when the government doesn’t have money for taxes, they say, “Hey folks, someone come in and pay the taxes.”

Ted (cont’d): So I call up Randy, and I say, “Randy, why don’t you go pay my taxes? If you pay it, they’re going to give you a certificate. If you own this certificate, you can earn up to 18% in Florida, up to 36% in Illinois, or 16%-

Randy: Okay wait, let make sure I get this straight. So, your house, you can’t pay your taxes, so I have the opportunity. so Florida’s going to sell me your, a tax certificate. So basically, I’m paying your taxes for you, so Florida’s got the money to do what they have to do. And then when you pay back your tax, you’re really paying me back, plus interest of 18%.

Ted: And there are thousands of these. I mean, in the state of Florida in the month of May they will have 1 million property tax certificates. 1 million. They put it in the newspaper. They put them in a newspaper just like this. Look, thousands of them. Thousands of tax certificates anybody can buy. So the point is, it’s an alternative investment.

Randy: Okay, all right. And you’re able to help folks. You’re able to help folks though do this, and navigate it, and understand it then better, and this is really kind of something never heard of this before Ted, I’ve got to tell you, really.

Ted: Here’s the deal. Half of the counties in the United States, more than 1500 counties, they can’t collect the property tax. So what they do is they issue a certificate, okay?

Ted (cont’d): How would you know it was issued? You wouldn’t know it. So they put it in the newspaper. So anybody can go and get the newspaper, and it’s a list of all these certificates. And you can buy any one of them you want. It’s amazing, all right? That’s a list of those certificates.

Randy: And again, this is essentially, this is just another type of investment somebody can make. So, it’s kind of interesting. I was unaware of this, and I know you mentioned, this has been going on since like 200 years. This is not a new situation. So-

Ted: 200 years. So think of the great big United States. Half of the states sell tax lien certificates. The other half of the states, like you’re in Ohio. So in Ohio they sell what they call a tax deed certificate. And what that means is, if the people didn’t pay their tax, the local government’s going to come on.

Ted (cont’d): Let’s say you’re in Franklin county or in Cuyahoga county, whatever county you’re in, they’re just going to come along, and they’re going to confiscate your property because you didn’t pay the tax. So if you don’t pay the tax, you’re going to get your hand slapped.

Ted (cont’d): You’re either going to pay it, you’re either going to get a tax certificate issued, or the government is going to take your property. It’s one or the other. It’s the law of the land that’s been around for 200 years. This is not brand new.

Randy: Well listen, this is pretty interesting. Well, you know what? It’s not brand new, but I think it’s a lot brand new to a lot of people like me. I’ve never heard about it, and there are folks watching. So hey, if somebody’s interested in learning more about this Ted, what should their next step be if they’re watching going, “I want to find out more?”

Ted: The easiest thing is just go to tedthomas.com, and there’s tons of information there. But if they stay tuned with us, we’ll even tell them how they can get lists of these properties, because there are so many of them nationwide. There are going to be 2, maybe even 3 million properties going to tax default this year.

Randy: Wow, well it sounds like there could be a lot of opportunity in there. Head to Ted’s website, and while you’re there, we’re going to talk some more. We’re going to do some more videos here, and you’re going to get a chance to watch a few more videos, and get some more insight on what this whole tax lien certificate thing is about, and I’m interested to hear more. I hope you are too. Join us there.

Want to learn how to make money in real estate investing using tax lien certificates? Would you like to buy mortgage-free homes for pennies on the dollar? Or earn double-digit interest rates secured by real estate? Then you don’t want to miss this FREE Master Class offer.

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Ted Thomas

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.

The Ted Thomas Difference:

  • Ted is recognized as America’s Tax Lien Certificate & Tax Deed Authority and has been helping people with investing in tax 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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