In this podcast episode you will learn what to do to protect your investment in a tax lien or tax deed. This is a special podcast episode because it is an excerpt from Lesson 7 of my Build Your Profitable Tax Lien Portfolio class. In this 8 week webinar coaching course I take you through the seven steps that you need to follow in order to build your own profitable tax lien portfolio. The next live course starts September 4th.
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The Tax Lien Lady
What happens at the tax sale depends on what state you attend a sale in, and on whether it is a tax lien sale or a tax deed sale. Tax lien sales can be very different from state to state or even from county to county within a state. Tax deed sales are pretty much the same around the country. At tax deed sales the properties are read off by the auctioneer in the order that they are listed and the price of the property is bid up. The exception to this is in counties that have online deed sales, like some counties in California and Florida. In order to bid at an online auction, you have to register online and put up a deposit. The properties are usually listed in batches and a time frame is given for each batch. You put bids in on the properties that you want to bid on, but you don’t know who else is bidding and what the other bids are. You may not even know if you are the successful bidder on a property until after the sale.
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Once you know when the tax sale is coming up in your area, you need to get the list of properties that are in the sale. I use naco.org to find tax sale property lists online for tax lien and tax deed sales. This only works for counties that have this information online. For counties or states that do not have this information online, you can either call the tax collector and ask how to get the tax sale list or you can buy the tax sale list from a tax sale list provider. To find out which counties have tax sale information and tax sale lists online, you can consult my State Guide.
To go to the county’s web site, first go to naco.org and click on the link to find a county. This will bring you to a page with a map of the United States. Click on the state that you are interested in and you’ll be taken to that state’s web page with a list of all of the counties in the state. Find the county that you are interested in and click on that link. You will be taken to the NACO page for that county. Click on the link to the county on the top of the page and you will go to the county’s web site. Note that this will only work if the county has a web site.
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How do you find out about tax sales that are coming up in your state? There are three ways that I know of to find out about tax sales for free or almost for free.You can look in the newspaper, call the tax collector, or go to a web site that sells tax sale lists.
The first way to find out about tax sales coming up in your area is to read the legal notices in the local newspaper. Most counties have to post an announcement about the tax sale, as well as the list of properties that are being offered for sale, in the local paper anywhere from two to four weeks before the sale. This method is not entirely free because you have to buy the paper. You also have to know when the sale is held so that you know when to start looking for it.
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Where is the best place to invest in tax lien certificates or tax deeds? Most people are concerned about which lien states have the highest interest rates and which deed states start bidding at back taxes. I believe that the best place to start investing is in your own backyard. I think that it’s best to invest in an area that you know, because you’ll know what the property values are and you’ll know what to look out for. Each state has different problems that you have to be aware of, especially if you’re purchasing raw land.
In Pennsylvania where I invest in tax deeds, for example, I have to worry about whether a property will perk or not. If I buy a lot in a deed sale that doesn’t perk I won’t be able to get a septic design approved and won’t be able to build on the property. Its resale value will be a fraction of the price that I could get for it if it had an approved septic design. In another state you might have other concerns. In dry states, like Arizona for example, you may have to be concerned about water rights.