Investing In Tax Foreclosed Properties

by James Ficarro

Tax Properties

Every property that is owned is assessed property taxes that must be paid every year. Property taxes are paid to local and state governments based on the appraisal value of the real estate. All states, the District of Columbia, Puerto Rico and the American Virgin Islands and Canada have property taxes.

When a property owner doesn't pay their taxes, they are usually penalized and warned. If the owner still doesn't pay the taxes, the property is either seized, gets a lien placed against it, or both. After due process, the property is sold at a tax auction.

Tax auctions provide one of the most extraordinary investment opportunities that exist to date. If properly educated, an investor can by real-estate for a small fraction of what it is worth. They can rent, sell, or use the property for themselves.

In most states, the government taxing agency allows investors to pay a delinquent owner's taxes. The investor receives a tax lien certificate. If the owner wants to keep the property, they have a limited time to pay off the lien, including interest, fees, and any additional taxes that had been paid after "possession". If the owner fails to pay off the lien, the property is deeded to the investor.

In some states, the government taxing agency will not allow investors to pay the taxes, so the property is seized and goes to the agency. The property is then auctioned off, usually for back taxes, penalties, and interest. The successful bidder typically gets 1st lien, so the dead is free and clear.

In other states, the delinquent property is sold at auction for the amount of taxes, penalties, and fees, but the original owner has a time period to buy the property back. The buy-back price includes interest (often very high), penalties, fees, etc. The taxing agencies make the deal as sweet as possible to encourage investors to bid on the properties and solve the delinquent tax problem.
About the Author

James Ficarro provides an excellent resource for finding and buying tax foreclosed properties and liens in every county in the United States. http://www.tax-property-sales.com

What is a Tax Lien and How Can You Profit From It? Frequently Asked Questions About Tax Liens

by Courtney Park

1. What is a Tax Lien Certificate?

A tax lien is the name of the claim that a taxing authority, such as the local or federal government, makes when an individual has not paid taxes for a lengthy amount of time. Tax Liens are most often applied to homes. Essentially, the government ceases control of the property, pending payment on taxes.

The taxing authority, will then sell a certificate for an asset, such as a piece of real estate or boat, if the owner of the property has been negligent in paying his or her taxes. Anyone can purchase a certificate by attending a tax lien sale auction in the county in which the unpaid taxes are owed.

2. How can I make money from my tax lien certificate?

You may be surprised to know that Tax Lien Certificates are far more profitable than Certificates of Deposit and just as safe. Tax Liens are also safer than the stock market and offer an equal rate of return.

If you invest in a tax lien certificate, you can earn a very high interest as much as 25% on the unpaid taxes from the owner of the property, which will be owed directly to you instead of the government.

Since the interest earned currently on a CD or a regular savings is only about 3-4%, it really pays to check out the tax lien strategy to get a higher payback.

Essentially, you are acting like a bank and gaining interest even though you never made the loan because you owe the certificate. Once all of the interest and taxes are paid, then the property owner can reclaim the property by gaining control of the tax lien certificate from you.

However, if the owner never claims the property or pays the taxes, then you will gain ownership of the property deed. Either way, you'll be in a position to make money from the tax lien on the property by gaining either interest or the property itself.

3. Can I purchase a tax lien in a town in which I do not reside?

Yes. You can purchase a tax lien in any town, even if you are not a resident of the particular town. The only trick is that you have to actually travel to the town in order to attend the tax lien sale auction.

4. What is a tax lien sale auction?

A tax lien sale auction is the method by which tax lien certificates are sold. Like any auction, bidders will bid for the property or tax lien properties that they are most interested in purchasing. You can bid for as many properties at one time as you desire.

5. Where do I find out where the tax lien auctions are?

Information on tax lien sale auctions are matters of public record. You can contact the local government in the town in which you choose to purchase a tax lien, or you can subscribe to a service online that provides that data to you. Visit http://www.liensource.net/ for more information on subscriptions to information.

6. How often do tax lien sales occur?

That varies. There are generally 1-3 tax lien sales a month per locality. Check with the local government for more information and to obtain a tax lien sale calendar.

7. How much capital do I need to begin?

The amount of money you need to invest into your tax lien purchase business depends entirely on the particular properties you're interested in purchasing. Properties range from small homes to mansions.


About the Author

© Copyright Courtney Park, All Rights Reserved.
About the Author: Courtney is owner of http://www.home-business-web.com For more information on home-based business ideas, and jobs for stay-at-home moms, check out http://www.home-business-web.com/part-time-business-ideas.html and http://www.home-business-web.com/jobs-for-moms.html