Podcast Episode #19: Interview with Jack Bosch

This podcast is an excerpt of an interview that I did with Jack Bosch. Jack is an expert at buying tax delinquent properties for pennies on the dollar, and he does it without going to the tax sale. Find out more about Jack, his background and how he got started in this short audio. Stay tuned for the next audio to learn more about Jack’s Land for Pennies System.

To download this audio to your computer just right click on the blue link below and choose “save target as.”
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Happy and Prosperous Investing,

 Joanne

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Real Estate Investing for Passive Income

Tax lien investing is a great way to invest for your future at a higher rate of interest than you can get in most safe investments. The problem with tax lien investing if your looking for a consistent income is that you don’t know when you’re going to get paid. You don’t get paid on a tax lien until the property owner decides to redeem the lien, or, if they don’t redeem the lien, when you foreclose. And foreclosure could be a long drawn out process.

If you’ve been listening to my teleseminars this past year, you know that I’ve also been looking for ways to invest in real estate for consistent returns and passive income. I’ve been looking into foreclosures, pre-foreclosures, and short sales as ways to acquire properties in order to rent them out for passive income. The problem with these strategies is that they require a lot of cash. But what if you could purchase homes from people who needed to sell their property before the bank foreclosed on them and before everybody else was knocking on their door? And what if you could purchase their home without having to come with a lot of money. What if you could help them increase their credit score by purchasing their home “subject to” their current mortgage? And what if you could do all of this with little to no closing costs?

A couple of weeks ago my husband and I attended a comprehensive 2 day training to learn how to buy and sell and hold real estate for maximum profits. We learned about strategies that make it possible to find homes in pre-foreclosure before everyone else knows about them, and purchase these homes subject to the current mortgage, with little money, if any, needed for a down payment. Listen to this podcast to find out more…

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Tax Lien Investing FAQs

Recently I sent an e-mail out to my subscribers asking them some questions. I wanted to find out what it is that most people want to know about tax lien investing. I got a lot of good questions.  I won’t be able to answer them all here, but I want to try to answer some tax lien investing FAQs for you in this article.

I especially like to answer questions that start out with the words “How do I” or “How can I…” This type of question shows me that someone is really interested and is ready to take action. So here are the answers to some of these tax lien investing FAQs…

Q: How can I buy tax liens or tax deeds without going to the auction?

A: In most states you have to attend the auction in order to bid, or have a representative there to bid on your behalf. But there are 2 ways that you can purchase a tax lien or deed without physically going to the sale. A few states do have online auctions, but not all counties in these states conduct their auctions online. Usually just the larger counties do. Many counties in Florida, California, and Arizona have online tax sales. And I know that some counties in Colorado and Illinois have online tax sales as well. Another way that investors have bought tax lien and tax deeds without going to the sale is to bid on left-over liens, this can usually be done through the mail. The only problem is that as tax lien and tax deed investing become more popular, there are less and less good properties left-over after the tax sale.

Q: I don’t live in the US; can I still invest in Tax Liens or Tax Deeds?

A: Yes, in most states you can invest in tax liens and tax deeds even if you are not a US citizen and do not live in the US. There are a couple of states that you have to be a resident of the state to invest, but these are not the most popular tax lien states and they don’t have online sales. All you have to do in order to purchase a tax lien is to fill out a tax form called a W-8BEN form. In order to complete this form you will also need to apply for an Individual Tax Identification Number (ITIN) if you are bidding in your own name. If you are bidding using a business name, you must apply for an Employer Identification Number (EIN). This is only for tax liens. You do not have to do this to participate in a tax deed sale.

Q: So how much money do you need to get started with tax lien investing?

A: The beauty of tax lien investing as opposed to tax deed investing and other types of real estate investing, you can start with a very small investment. The first very profitable tax lien that I purchased started with an initial investment of only a couple of hundred dollars, on a small sewer lien. Then I was able to pay the subsequent sewer taxes the next couple of years and instead of trying to foreclose I just kept paying the subsequent taxes. After a couple of years, the homeowner moved out of state and stopped paying the taxes on the property, so then I got to pay even bigger payments $5000 over the next couple of years. The lien finally redeemed and I collected 18% per annum on most of my investment plus penalties.

Q: How often do you acquire the property with tax liens?

A: In the state of NJ where I’ve done most of my investing, very, very seldom do you get to foreclose on the property. If you are interested in owning property than tax deed investing or redeemable tax deed investing is the way to go. Only about 1% of tax liens will not redeem and of those properties, once you start the foreclosure process about 80% will redeem sometime during the foreclosure process.

Q: Are there risks involved in this type of investing? What are they?

A: Yes, there are risks involved and that’s what the gurus leave out, they make it sound so easy. They like to use the term “Government Guaranteed” to make people think that they can’t go wrong with tax lien investing, that the government guarantees that they’ll get paid on a tax lien. That’s really not true, what they mean by “government Guaranteed” is that there are laws that protect the investor but you not guaranteed to get paid. The guarantee is the property. Tax Liens are guaranteed by the property that you have a lien on, so if you buy a tax lien on a worthless piece of property, then you made a poor investment and it is possible that you could lose your money. Yes, there is risk involved, but that risk is minimized by doing your due diligence on the property before you purchase the lien, just like you would do due diligence on property before giving someone a loan against it. If you do your due diligence properly than tax lien investing is a very safe investment because it’s secured by something tangible, not just a piece of paper.

One of the things that I do in my courses, is teach people how to do due diligence for tax sale properties so that they can totally reduce the risk involved with tax lien investing.

Q: Can you invest in tax liens and tax deeds in your IRA?

A: We all want to keep more of those profits for ourselves and not give half of it away to Uncle Sam. The good news is that you can use money in your IRA or Roth IRA to invest in tax lien certificates or tax deeds, but only if it’s a true self-directed IRA. With a self-directed IRA, your profits can grow tax-differed, and with a Roth IRA, your profits can be totally tax-free. In my courses I have 2 audios from different experts from 2 different self-directed IRA companies that explain how to do this.

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Investing Tax Free

Did you know that you could use money from a self-directed IRA account for investing tax free in tax lien certificates or tax deeds? I’ve interviewed retirement account specialists from several different self-directed IRA companies, and I’ve learned that investing tax free in tax lien certificates and tax deeds is possible with a self-directed IRA.

If you use money from a regular self-directed IRA account to invest in tax lien certificates or tax deeds, than your money grows tax free until you withdraw from your account after retirement. But, if you use money from a Roth self-directed IRA, and you do not take any withdrawals until retirement age, you do not pay any taxes on your profits! So if you are using tax lien or tax deed investing as a way to save for your retirement, you need to look into this. Continue reading

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Podcast Episode #14: More Profitable – Tax Lien Certificates or Tax Deeds?

Which is the more profitable investment – Tax Lien Certificates or Tax Deeds? Find out as The Tax Lien Lady reveals which is best in different areas of the country.

 

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Tax Lien Investing Basics Course

Find out how you can started in tax lien or tax deed investing with the new Tax Lien Investing Basics System. Tax Lien Investing Basics will help you build the foundation for your own profitable portfolio of tax lien certificates or tax deeds. Find out more about Tax Lien Investing Basics at www.TaxLienInvestingBasics.com.

 

 

Tax Liens Vs. Tax Deeds: Which is the Best Investment?

 

By Joanne Muse, The Tax Lien Lady

Frequently I’m asked the question what is more profitable, investing in tax lien certificates or tax deeds. Whether tax lien investing or tax deed investing is better for you depends on the state that you live in and what your goals are. If you are looking to pick up property under market value than you are better off with tax deeds than with tax liens. If you do your homework and purchase tax liens on good properties, the chances of foreclosure are slim. And in some states, even if the lien is not redeemed, you may not be able to get the property.

In the State of Florida for example, if your lien does not redeem during the redemption period, the property goes into a tax deed sale in order to satisfy your lien. If you did your due diligence and purchased a lien on a decent property, in order to get the property, you will have to bid against other investors at the deed sale. So if you want to invest in Florida, and you are interested in obtaining property, then deed investing is the way to go, not lien investing. If, however, you are not interested in owning property, but just want to get a higher return on your money than you could in the bank, then tax liens are the way to go. In Florida, as long as you do your due diligence, you won?t have to worry about the possibility of owning the property.


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