WHAT IS TAX LIEN CERTIFICATE INVESTING?
What is tax lien certificate investing? I’ll tell you everything you need to know. Find out what you can do with tax lien certificates and how you can profit from them.
Today I’m going to answer your question, “What is tax lien certificate investing?”
Tax lien certificates are a safe, secure, predictable way for anyone young or old or in between to make solid returns and get a check from the government.
You’ll find this very interesting. You’re looking into an almost secret world that is hidden right in front of your eyes.
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WHAT IS TAX LIEN CERTIFICATE INVESTING? – TAX DELINQUENT PROPERTY
In the United States, we have over 3,000 counties, and about half of these counties sell tax liens on delinquent properties.
These properties are in average neighborhoods, sometimes in large country clubs, and some are in not so hot neighborhoods. They could be office buildings, residential lots, ranches, dairy farms, or used and abused homes in less desirable neighborhoods.
They are all taxable properties, and if the property owner fails to pay property taxes, there are consequences.
WHAT IS TAX LIEN CERTIFICATE INVESTING? – PROPERTY TAXES
First, I’ll give you a little foundational material about the who, what, where, when and why of tax lien certificate investing.
Local counties need money to pay for the county employees and to build schools, pay school teachers, build and fix roads, and finance the police department and dozens of other bills.
The question is where does the county get the money to keep all those wheels of government turning? The answer is property taxes from all those homeowners and others living in the county.
This revenue is used to pay county employees. As you know, no one works for a long time without getting paid.
WHAT IS TAX LIEN CERTIFICATE INVESTING? – COLLECTING PROPERTY TAXES
The county has created a process of collecting taxes, however, in some cases, they are unable to collect.
The state legislature recognizes that property owners don’t like taxes and don’t want to pay.
So, the local county coordinates with the legislature, and they make rules. Those rules become laws to collect the much-needed property taxes and acquire the revenue that is needed.
The state legislature mandates that the county treasurer levy taxes, collect taxes, and if the property owner fails to pay taxes, the property owner has violated the law. Property owners must pay property tax.
WHAT IS TAX LIEN CERTIFICATE INVESTING? – TAX LIEN CERTIFICATES
In the tax lien states, the treasurer will issue a tax lien certificate on properties that have unpaid property taxes. What happens next is the county will conduct a public auction to sell the tax lien certificates.
They announce tax lien auctions online on the county’s website, plus they run multiple ads in the local newspaper and publish the tax delinquent properties for sale list.
The treasurer creates a tax lien in the amount of the delinquent taxes and sends many notices that the taxes are delinquent. These official notices advise in detail that the county will issue a tax lien certificate.
WHAT IS TAX LIEN CERTIFICATE INVESTING? – THE PROPERTY OWNER
The certificate will be sold at a public auction. The consequences of the auction are unknown until it takes place. However, the property owner is not pushed off or evicted from the property.
The property owner remains in place to hopefully recover from sickness or get a new job and ultimately pay their taxes. So the property owner is protected and stays in the property.
WHAT IS TAX LIEN CERTIFICATE INVESTING? – THE CERTIFICATE HOLDER
The certificate buyer receives a tax lien certificate, but what does buying a tax certificate mean?
This certificate controls the property which cannot be sold without first paying the certificate. It also cannot be re-mortgaged without paying the certificate.
All parties to this transaction are winners.
The county will get paid when the investor buys the certificate, and the investor gets paid when the property owner pays. Meanwhile, the property owner is safe and secure in their home while they recover from whatever crisis life has brought to them.
If this is interesting to you, I have a free mini course. It’s a free gift from me to you that will teach you the secrets of tax lien certificates and how to profit in tax deeds.
WHAT IS TAX LIEN CERTIFICATE INVESTING? – A HIGH-YIELDING INVESTMENT
Is investing in tax liens a good idea? Yes! Tax lien certificates are a safe, secure investment.
You’re probably saying to yourself, “Wait a minute, Mr. Thomas, why would I buy a certificate from someone who hasn’t paid their taxes? People who don’t pay taxes are classified as deadbeats.” Not exactly.
Can you make money investing in tax liens? If you purchase a tax lien certificate, you will be entitled to an outrageous interest rate return. The returns could be 16%, 18%, 24%, or even 36%.
WHAT IS TAX LIEN CERTIFICATE INVESTING? – A LOW-RISK INVESTMENT
Your payment will come from the government, but you’re worried that you’re not going to get paid? No problem. How can I say no problem? Because this is a win-win situation.
The delinquent property owner has suffered some type of problem. The county does not want a tax delinquent property, and the county is benevolent. They’re waiting for someone to get healthy or re-employed.
Life happens. However, no one wants to lose their property.
WHAT IS TAX LIEN CERTIFICATE INVESTING? – AN INVESTMENT SECURED BY REAL ESTATE
“But, Ted, if the property owner won’t pay the county, what makes you think they will pay me?”
The government is on your side. The tax lien certificate issued by the county gives you assurance that you’ll get paid. How do they do this?
The county advised the delinquent property owner that if they don’t redeem the certificate, the holder of the tax lien certificate will become the new owner.
“You forfeit your property when you don’t pay taxes,” is the message to the delinquent property owner.
WHAT IS TAX LIEN CERTIFICATE INVESTING? – ACQUIRING A MORTGAGE-FREE PROPERTY
Imagine becoming the owner of a property after you only paid a few years of back taxes.
Now for the big bonus. If the property goes to auction, and the property owner does not pay the taxes plus interest, the auction will wipe out the mortgage. In other words, it’s cleared off the property title.
Now, your tax lien investing becomes very lucrative. You get the property mortgage-free for just a few years back taxes. You can acquire properties for pennies on the dollar!
WHAT IS TAX LIEN CERTIFICATE INVESTING? – REDEMPTION PERIOD
To review, if the property owner fails to come forward and redeem a tax lien certificate, a legal process will take place, as the owner has forfeited ownership of the property to the owner of the tax lien certificate.
This ownership process could take place in a period as short as 6 months, but generally speaking, it requires 1-2 years.
WHAT IS TAX LIEN CERTIFICATE INVESTING? – A WIN-WIN-WIN SITUATION
Everyone benefits. The county is paid. The property owner doesn’t immediately lose possession, and the tax lien certificate purchaser either earns a high interest rate or ends up owning the property.
The point of this lesson is your money is safe and secure, and your return on investment is outrageous.
CONCLUSION
We hope you enjoyed Ted’s lesson, “What Is Tax Lien Certificate Investing?”
When a property owner falls too far behind on paying property taxes, in about half of the states in the USA, the county will issue a tax lien certificate at a public auction, held online, offline or both.
A savvy investor can become a certificate holder by paying the property owner’s back taxes.
Why would anyone want to do that? Because tax lien certificates pay interest rates of up to 36%, and if you don’t get paid, you get the property mortgage-free!
The vast majority of tax delinquent homeowners will pay the back taxes plus interest to redeem their property, making this an excellent passive investment. Additionally, the check will come from the county.
However, if the delinquent homeowner doesn’t pay, the tax lien certificate is secured by the property. This makes it a very safe investment.
Tax lien certificates come in a wide variety of amounts, as little as under $100 or as much as over $100,000. There’s something for everyone, and anyone can do this!
If you’d like to know more about tax lien certificates and how you can profit from them, there’s no one more qualified to teach you than Ted Thomas, America’s leading authority on tax lien certificates and tax defaulted property investing.
Ted Thomas is the only one who provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops & web classes, and personal one-on-one coaching.
Get started today at no cost with Ted’s FREE Master Class. It’s only about 1 hour of streaming video and will open your eyes to the incredible opportunities available in tax lien certificates and tax deed investing.
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