Free Webinar: How To Safely Invest In Tax Lien Certificates

Wednesday, August 10 at 9pm eastern, Joanne Musa of TaxLienLady.com will host a free webinar on “How To Invest Safely In Tax Lien Certificates.”

This webinar is geared for newbie investors who want to learn how to invest in profitable tax liens. This training is for you if:

  • You want to use tax lien investing as a safe alternative to stock market investing
  • You want to use tax lien investing as a safe alternative to stock market investing
  • You are tired of losing money in your retirement account to the stock market
  • You’re looking for an alternative to investing in real estate

Find out the truth about tax lien investing and separate the hype from the reality of what you can expect with tax liens. Here’s some of what Ms. Musa will be covering in this training:

  • What are the myths that you may believe about tax liens
  • 5 Mistakes that new investors make and how to avoid them
  • 5 Steps you must take to buy profitable tax liens
  • How you can get step-by-step instruction for investing in tax liens.

A replay of the webinar will be provided to everyone who registers for the live call. You can get more information or register at www.TaxLienLady.com/WebinarTraining.Православни икони

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What’s Better, Tax Liens or Tax Deeds?

Recently someone left this comment in reply to one of my articles about tax lien investing, “Thank you for opening my eyes to the tax lien business, but don’t you agree that the real money is in the purchase of tax deeds?”

The truth is that there may be more money in tax buying and flipping tax deed properties, but I still like tax lien investing better, especially for the new investor. There are a lot of reasons that I prefer buying tax liens to tax deeds. If you are a real estate investor and you like rehabbing and selling properties than tax deed investing may be more profitable for you than investing in tax liens. But here are a few reasons why I prefer tax liens, and why you may want to start out with tax liens rather than tax deeds.

First of all tax liens are usually cheaper than than tax deeds. You can start out with very little money. For example in a typical tax lien sale you may be able to purchase 2 or 3 liens for under $1000, but to buy a tax deed on a decent property that is not just vacant land you will have to spend?a few thousand dollars. If you have at least $20,000 to spend, than in some states you may be able to purchase a decent deed. But not every investor wants to start out with that much money, or even has that much to start with.

I’ve purchased many of my liens for less than $500 and I’ve been able to add to my investment by paying the subsequent tax payments. I had one lien that I purchased for around $475.00 and then I was able to pay the subsequent for the next 6 years before finally forcing the lien to foreclose (by sending a foreclosure notice to the mortgage company). I made 18% on most of my investment. Where else can you put less than $500 in an account each year and make that much interest?

The second big reason that I like tax liens better than tax deeds is that I don’t have to worry about owning the property and rehabbing and selling houses. I don’t have to negotiate with anyone. The tax collector does all the work. They collect the redemption money, notify me when the lien is going to redeem, and I just send in my tax lien certificate and get my check. Once in a while when the lien doesn’t redeem after the redemption period is over I may have to send out a pre-foreclosure letter just to let the owner and any lien-holders on the property that I’m going to start foreclosure proceedings if the lien is not redeemed. But I have not actually foreclosed on a property yet, because as long as?you do your due diligence and buy good liens, they will always redeem at some point.

What do you think. Which do you like better tax liens or tax deeds and why? Leave your comment below.икони

Posted in Tax Deed Investing, tax deeds, Tax Lien Investing | 5 Comments

Your Monday Motivation

Your True Identity

We are not only wives, husbands, mothers or fathers, managers, teachers, parents, students or teenagers. These are the roles or life-stages that we fulfil in the process of living. What we are at the core of our being, our identity, goes beyond roles and job functions.

Being project managers, admin assistants, or teachers describes what we do when we are at work, at school or at home. Being husbands, wives, friends, parents or children describes our relationships to other people. But at a deeper level we need to understand what we are all the time 24/7. This will also determine what we do, because doing is a result of being.

You are a Winner, an Achiever, a worker, a creator, a lover, a servant, an image bearer of your Creator, and more.

These are not roles, these are what we were created to be, so that we may fulfil our purpose and potential in this lifetime.

You have an incredible identity!

Affirmations:
I am an Achiever
I am a Winner
I am a Worker

Want to receive these encouraging and inspiring emails?
Register for a 14-day FR’EE Trial of the Daily PEP-Talk at http://www.BeMotivatedToday.com/71058. Watch a short video and download an e-book on releasing your potential and a report on a unique way to help you create a passive income that actually works. Visit http://www.BeMotivatedToday.com/71058.

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Purchasing Tax Liens – Everything You Need To Know

Alright, so I can’t cover everything there is to know about purchasing tax liens in this article but I can give you what you need to know to get started.

What is a Tax Lien Anyway?

First let’s start with understanding just what a tax lien is. When property taxes are delinquent, the government can either sell your property right out from under you – that’s a tax deed, or they can sell the delinquent taxes to an investor, giving you extra time to pay them, and giving the investor the interest and penalties that you would normally pay to the taxing district.

Why Would You Want A Tax Lien?

Depending on the state, the interest collected when the lien redeems (is paid off) can be anywhere from 8% to 36% per annum. This certainly beats the interest that you get in a CD. Although the money you invest in a tax lien is not guaranteed by the FDIC, the interest rate is guaranteed by the government, and your investment is guaranteed by the property. It’s called a “tax lien” because there is a lien put on the property for the tax amount – which is really the amount of taxes owed plus penalties accrued up to the date of the tax sale.

Doing Your Due Diligence

Because the lien is guaranteed by the property, it makes sense that you should do some due diligence on the property before you purchase a lien on it. Since in most states a tax lien is in first position (it comes before a mortgage or other non-governmental liens), a title search is not necessary, and could cut into your profit if you did a title search on all the properties that you intend to bid on. But you do want to make sure that the property is worth a few times what you will pay for the tax lien. You need to check the value of the property. You should look at the tax assessment data for the property and physically look at the property to assess its value and the desirability or lack thereof of the area where the property is located.

This is the minimum due diligence that you need to do for residential properties. I don’t recommend that new investors bid on commercial properties or vacant land. But if you do decide to bid on these types of properties, you will have to do some more checking before purchasing a tax lien. You can check the state environmental web site and make sure that there are no known environmental problems with the property. I would also check with the zoning department to make sure that the property is zoned correctly for what it’s being used for, or that if it’s vacant land it can be built on.

After that, you want to make some kind of determination of its market value before bidding on a property at the tax sale. You’ll also have to know just what is being bid at the sale. Is the price of lien bid up (premium bid) or is the interest rate bid down, or is something else being bid. You’ll have to know the bidding rules and procedures and the procedures for registering to bid at the sale. Some counties require that you register way ahead of time and that you give them a deposit before you are allowed to bid.

Other Things You Need To Know

You’ll also need to know how and when you are expected pay for any successful bids, and what is conveyed to you when you are the successful bidder. Will you receive the tax lien certificate and need to record it with the county clerk? Or will you simply receive a receipt of all your tax liens and will the recording be done for you? Will you have to pay the subsequent taxes until the lien redeems, and what are the procedures when the lien redeems? What procedures will you have to follow to receive the deed if the lien doesn’t redeem and is there a time deadline for you to follow them?

Because in each state the rules and procedures for purchasing tax liens are different, I cannot give you a step-by-step procedure in this short article, but I can tell you what it is you need to know. You can fill in the details by asking the tax collector, county treasurer, or whoever is responsible for conducting the tax sale. You can also get more detailed information and answers to your questions about purchasing tax liens in the Members Area of TaxLienLady.com at www.TaxLienLadyMembers.com.

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Tax Lien Investing Basics: The Difference Between Tax Liens and Tax Deeds

So many new tax lien investors don’t know the difference between a tax lien and tax deed.

They’ve heard that tax liens are a great investment and that you can get the property with a tax lien. So they confuse tax liens and tax deeds. For those of you who think that buying a tax lien is a good way to get property, you’re wrong.

Tax Liens

Tax lien investing is not a good way to get property for back taxes. When you purchase a tax lien, you are not purchasing the property. You are simply paying the property owner’s taxes and getting the interest and the penalties that the government would normally collect. One of the reasons that tax liens are such a good investment is that if the lien is not redeemed within a given amount of time (this is the redemption period and varies with the county and state that the lien is purchased in), then the lien holder can foreclose on the property.

It is very seldom that a tax lien on a good property will not redeem. So the lien buyer almost never gets the property, unless the lien buyer specializes in buying liens on vacant land, or properties that have problems, or unless the lien buyer doesn’t do his or her homework and buys liens on junk properties. Tax lien investing, while it’s a great way to invest your money at a high return, is not a way to buy properties for a fraction of their value.

Tax Deeds

What’s different about a tax deed is that when you purchase a tax deed you are actually purchasing the deed to the property, not just a lien. When you are the successful bidder at a tax deed sale, or if you purchase a tax deed directly from the county, you are actually purchasing the property and will receive some sort of deed to that effect. Usually it is a non-warrantee deed. In most deed states (but not all of them, there are a couple of exceptions), the property is conveyed free of any liens, but there is no warrantee on the title. The title may have to be cleared before title insurance can be issued on the property, and the tax deed buyer may have to evict any inhabitants, but the property reverts to the deed buyer once the deed is recorded.

Redeemable Tax Deeds

Now I don’t want to confuse you, but there are a few states that sell redeemable deeds, and in these states the deed does not actually revert to the tax deed purchaser until the redemption period is over and the deed is not redeemed. It’s somewhat in-between a tax lien and tax deed, in that you’re actually purchasing the deed at the tax sale, but the previous owner has a period of time to redeem the property. There are usually steep penalties when redeeming these deeds that go to the investor, so redeemable deeds are a good investment for the purchaser either way. Either they come away with the property or get a great return on their money.

For more information about which states sell liens, which states sell deeds and which states sell redeemable deeds see the online home study course Tax Lien Investing Basics.

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