I took a class on state tax liens on homes. Can the average investor make good money on tax liens?

Question

The class told us all we needed was two hours a week. For a large fee the company would stear us to the best liens.Do I need this company or could I obtain good liens on the internet for free?

Answer 1

Almost all of these online website won't do you any good. They sell knowledge for huge fees that you can get on your own with a little sweat. In fact, this is an area where doing your own research introduces you to the major players, and gives you valuable resources these Internet sites can never give.

The question is what state to work in.

In some states the interest you get and restrictions on foreclosing on property are very bad for the investor, so you want to avoid those. Other places, like California, Florida and Texas, are excellent, but there are thousands of investors who flock there, expecially the big counties where there are lots of properties. In some places, like Dade County Florida, banks and financial corporations show up and buy millions of dollars of tax liens for investments.

If you can, it is best to work your own state, in your own county and the counties around you. It is best if you know the area and have a sense of property values. I've seen people buy tax liens and foreclose to get the property, only to find it was a toxic waste dump, so you have to do your research on what you are bidding on.

Most tax liens go through the counties, so you can contact your local county to find out how it works, what are the legalities and where the tax liens sale are held. Only a very few places hold their tax lien sales on line, but many counties do provide websites that announce lien sales and list the properties that are expected to be available.

Most counties hold tax lien sales either every 6 or 12 months. So if you work several counties, you could be going to tax lien sales 4-12 times a year.

Another good advice is to go to your first tax lien sale without wanting to bid, just observe. get a feel for what things sell for and what the process is. Then on the next one, register as a bidder and get your feet wet.

Good luck.

Answer 2

Sounds like a get-rich-quick-scheme. I would definately steer away from this type of dealing.

You can get some good deals on liens on the internet but always remember the old adage:BUYER BEWARE. You better make sure that the property that you are interested in, does not have IRS liens or other encumbrances that may sour the deal.

You can go to bid4assets.com to check out what they have. They have tax lien sales throughout the entire year. And the good part that this is NATIONWIDE. So yes, you can buy property that is 2,000 miles plus away from where you live.

I recommend that you invest in abandoned, code violated or condemned properties. It is more safer and has a higher profit potential.

Charlie

Answer 3

Tax liens are not a game for the inexperienced. Many times, when you purchase a tax lien, the homeowner has up to a year to redeem the property simply by paying the taxes on his/her own. After 364 days of owning a $10K tax lien, would you be happy to get your money back with no interest ?

Don't bother paying anyone to 'steer you to tax liens'. There is no way for any company to know which are better than others.

Answer 4

LIENS means that your ownership and selling the house is subject to approval by the IRS. if you sell the house to me, you will not be able to deliver the deed to me unless you pay off the government the debt and what you owe to the mortgage co. You can not take off the lien unless you enter with the IRS in to an Installment Agreement where you agree and start paying the debt. However, since you disregard previous IRS request for payments, you exhausted all chances the IRS gave you. No way but getting in to an installment agreement or finding someone first to buy your house, then make your calculation that you pay the IRS and the Mortgage Co what you owes. The title Co usually help to administer this matter.

Answer 5

From the sounds of it, you will be going to a third-party purchaser of tax liens and they are selling it to you at retail. Your best bet for tax liens is to go directly to your local tax assessor's office (or whatever jurisdiction you would like to invest in) and ask for their tax sale list.

A lot of due diligence is required, but if you know your operating area well enough, a lot of money can be made with tax lien certificates. Especially if you have the opportunity to foreclose on a property.

BTW, there are companies that do offer their list of tax liens for sale to the general public. Usually, a premium is factored into the company's initial investment. But, for now, I know of one state that directly sells their tax lien certificates to the general public, and that is Florida (see www.realauction.com). I heard that Arizona is developing a system as well but do not know when they will come online.

Hope this helps...

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