Redemption Deed Investing (5)
Since we are talking about redemption tax deed states, I wanted to take a minute to describe Louisiana tax deed sales. Although many investors classify Louisiana as a tax lien state, I'm here to correct the rumors and make sure you know its actual rules as a redemption tax deed state. What that means is at Louisiana tax sales they do not sell tax lien certificates, they sell a tax deed. But attached to the tax deed is a redemption period. Although the investor purchases a tax deed essentially transferring ownership, the property owner still has a period of time to pay back the delinquent property taxes along with any interest or penalties that have accrued to that point in time. The redemption period in Louisiana is one of the longest at 3 years. That is a pretty long time, but every year that your money is tied up in that investment you would make 12 percent on your money. That essentially equates to 1 percent every month of the life of the investment. That is still phenomenal because it is state mandated. You might return 12 percent annually in the stock market if you are lucky, but you might lose 12 percent, too... so this is still miles ahead of the alternative. Louisiana also adds a 5 percent penalty at the time of redemption. So when if the property owner decides to pay their delinquent taxes with interest then another 5 percent is tacked on at the time of redemption and is classified as a penalty. So if they redeem at the end of the first year, then you would have made 17 percent on your investment. If the property owner does not redeem within the 3-year redemption period, then the property owner loses their right to the property and the investor is a new property owner. Louisiana tax sales are a great place to invest. It offers fair returns on your money along with a penalty that the investor receives upon redemption. No Risk Investor is the most trusted resource for tax lien and tax deed investing. Investors all over the world have joined the ranks of tax lien and deed investors using No Risk Investor's simple resources to make money in tax liens and tax deeds. No other source provides as many quality lists and tools to help investors quickly find great investments that will return 16% - 50% every year.
If you're interested in tax deed sales, then Georgia is one of the top spots in the country. But Georgia tax sales are a bit unique. Georgia's rules are more in line with Texas tax sales and Louisiana tax sales; meaning Georgia is a redemption tax deed state. They sell a tax deed that has a redemption period attached to it. That initially turns off some people, but Georgia actually provides a great opportunity. Let me share a few things about Georgia. Each tax deed that is sold in Georgia has a redemption period of 1 year and 45 days, but during that period an investor will make a 20 percent penalty on their investment. Georgia tax sales operate through a premium bid method, which means that the winning bidder is the bidder that bids the highest price tag above the minimum bid. When purchasing at Georgia tax sales you will probably bid a premium amount above the minimum bid amount. Don't worry, though, because the premium you bid also receives a 20 percent return. Another bonus is that when the property owner fails to redeem the investor can file a Notice of Foreclosure of Right of Redemption, which triggers another 10 percent penalty. The Notice can be filed 1 year and 1 day after the sale of the tax deed. Because the investor receives interest on the surplus bid (the amount bid above the minimum asking price) investors tend to bid high amounts for their tax deeds. As we have always said, make sure to run all the numbers before attending the auction and figure out a maximum bid amount that you are willing to place. Make sure your maximum bid leaves enough margin to allow you to exit and make the money you are interested in making. For example, if the property value is $55,000 and you place a winning bid of $53,000, then your margins are small and it may be difficult to make a large return. When investors bid up the premium, it also increases the likelihood that the property owner will not redeem, which gives the investor the right to own the property. The amount you bid is easy to control. Just plan ahead. Georgia tax sales are great for investing. A few main points include the following: Georgia sells redemption tax deeds (tax deed with redemption period of 1 year and 45 days) 20 percent penalty during first year of investment 10 percent penalty added when Notice of Foreclosure of Right of Redemption is filed Premium bidding method (premium is included in price of tax deed) Physical presence is necessary to purchase tax deeds No Risk Investor is the most trusted resource for tax lien and tax deed investing. Investors all over the world have joined the ranks of tax lien and deed investors using No Risk Investor's simple resources to make money in tax liens and tax deeds. No other source provides as many quality lists and tools to help investors quickly find great investments that will return 16% - 50% every year.
For good reason Texas has been one of the most attractive places for tax lien and tax deed investing. But Texas is unique in that it is neither a tax lien nor a tax deed state. The rules are different in Texas. Texas is a redemption deed state, which means it's a hybrid of a tax lien state and a tax deed state. When you attend the auction you purchase a deed (redemption deed), but the property owner is still allowed a redemption period like in a tax lien state. But the primary difference is the return offered in Texas. Just like those blessed Texans say, "Everything's bigger in Texas," Texas offers an incredibly high return if the property owner redeems; to the tune of 25% every year. If the property owner doesn't redeem during the stated redemption period, then you take full ownership of the property without having the take the tax lien to deed like in a tax lien state. The other advantage of investing in Texas is that auctions are held monthly on the first Tuesday of every month. In order to bid on a property, though, one must be present or have someone represent them physically at the auction. Texas counties also outsource their property tax sales through law firms. To find information for sales it is often necessary to visit the law firm. Shown below are the three firms that handle these sales. Perdue Brandon Fielder Collins & Mott LLP, Attorneys at Law www.pbfcm.com Linebarger Goggan Blair & Sampson, LLP, Attorneys at Law www.publicans.com McCreary, Veselka, Bragg & Allen, P.C., Attorneys at Law www.mvbalaw.com As mentioned before, property owners have an opportunity to redeem themselves for a certain period of time after the purchase of the tax foreclosure properties. This period is determined by whether the property owner had homestead insurance on the property. The difference is if there is homestead insurance on the property, then they have two years. If no insurance is held, then the period is only six months. At the time of purchase, through, the investor receives all rights of ownership including the right to use and take possession. But the property owner can still redeem so be weary about putting additional money into the property. No Risk Investor is the ultimate resource and tool for tax liens, tax deeds, and real estate investors all over the world. No Risk Investor takes incredible pride in its ability to help students take action, get into properties, and begin the journey to financial freedom. No Risk Investor provides county lists, property lists, online auction lists, comprehensive training and education, an auction calendar, an online auction center, an investor community and much more for its members.
After the government has taken control of Tax Lien Foreclosure Properties, the next step is for them to seek to sell it as a tax lien foreclosure property at public auction. Tax Lien Foreclosure properties are sold off as a means of raising the money necessary to unburden the government agency of their loss due to the unpaid property taxes. Once the tax lien foreclosure properties are sold to the person with the highest bid, the money raised at a tax lien auction goes straight to the appropriate government authority. Each bank, or tax official, has its own way of handling the sale of a Tax Lien Foreclosure Property. It varies from official to official. The sale of Tax Lien Foreclosure Properties are generally held at a courthouse or on the property that is being auctioned off. So there isn't a set way that the sale of delinquent property is sold. The one constant is that the person that the lien is being held against cannot buy his or her property back. That is the law. Not even family members can bid on the tax lien property. Again, the law strictly enforces this. Tax lien foreclosure properties can be very lucrative investment opportunities for homebuyers and real estate investors. Since Tax Lien Foreclosure Properties absolutely must be sold in order to produce any value for the government, most tax lien foreclosure properties are allowed to be undersold, simply so that they will produce at least part of the necessary revenue. In fact, it's often possible to find Tax Lien Foreclosure Properties going at anywhere from 30 to 60% below what they would normally sell for on the open market. Therefore Tax Lien Foreclosure Properties are a very hot commodity among savvy investors. Tax Lien Foreclosure Properties are one of the best ways to find great deals on properties of incredible quality. There are all sorts of other properties for sale due to liens that have been unpaid as well, which can go for similarly low prices. There are bank lien homes, homes that are on sale as a result of a defaulted mortgage, and even properties being sold due to an unpaid property or homes tax lien. No Risk Investor is the ultimate resource and tool for tax lien, deed, and real estate investors all over the world. No Risk Investor takes incredible pride in its ability to help students take action, get into properties, and begin the journey to financial freedom. No Risk Investor provides county lists, property lists, online auction lists, comprehensive training and education, an auction calendar, and online auction center, an investor community and much more for its members.
Wednesday, 25 November 2009 00:00 Written by Eddie Stewart