Tax Lien & Tax Deed Investing Blog
Tax Lien Investing (47)
Once you have decided that you are going to purchase a tax lien, then the next thing you want to do is select a list from the county and state that you would like to work in. One of the things that make a good county to work in is compatibility with the county workers. You will know that they are a friendly county to work with once you have talked with them and they are willing to help you out with information that you request about particular tax lien properties. Information that you may want to ask about would be a total price on the investment, including the investor's fee, the certificate name transfer, and the property type backing the tax lien certificate.
Once you have established that the county will be good county to work in, then you will want to find out information on the tax lien auction including the auction time and when the over the counter list is released. The over the counter list usually comes out within two to three weeks after the auction is over. Keep your eye on the tax lien listings for the county that you have selected and be ready to purchase directly after the auction if OTC's are what you want.
When you have downloaded the tax lien list there will be some that don't have the property addresses on them. In order to find out where the location of the property is and what it is, you will need to do some "due diligence." One of the ways to find out what and where a property is located, is to pull up that county website under the assessor's webpage. If you are in Texas then it will be the appraisal district's website. If you are in Florida then it will be the property appraiser's website. Once you are on this website then you will find a place to enter the parcel or pin number and it will then bring up the information on the property that you are seeking. It may also pull up a map showing the property. You can also get information from the county workers, but using the county website tends to be easier by avoiding spending time on the telephone or potentially trying to negotiate the information from a county worker that may not want to help. Once you're ready with a list of tax lien properties to purchase, call the county to check their availability, then make the purchase.
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Tax Lien Investing
Friday, 28 January 2011 10:12
Self-Directed IRAs, Corporations, and Tax Lien Investing
Written by NRI Support
Many of you are going to use your IRA or other retirement accounts to fund your tax lien or tax deed investing efforts. This is a great way to get money to start investing. Many of those accounts are losing money anyway. Once you have established which retirement account to use, then you are going to roll it over into a self-directed retirement account. If you take money out of and put it back into an account then you will pay a penalty for this action. Therefore, we use the term "roll-over" to make the transition. You may have to pay a fee to roll over the funds, but you won't be penalized. There are many companies that will help you set up a self-directed IRA, which is the most common account for investing in tax liens and tax deeds. You want to be sure that when you set up your self-directed account, that the company will allow you to invest in tax liens and tax deeds through the account.
This is a specific type of investment and not all of the custodians for the self directed IRA will allow this type of investment. Some of the companies that allow this investment type are: Entrust, Equity Trust, Lincoln Trust, Pensco, and Sterling Trust (which allows tax deeds only). Once you have set up the self directed account, one of the things that you may want to do is set up an LLC or a corporation. Setting up the account through a corporation may give you checkbook controlled capabilities, meaning you can simply right a check, which draws directly from your retirement account. Of course, you can't write a check for anything, but you can write checks to counties for tax lien and tax deed investing. This is important also for time purposes. Having the ability to simply write a check and send it to the county saves a lot of time and ensures you're the winning bidder for tax liens and deeds. This is also a way to cut down on expenditure from your self-directed IRA due to the cost of cutting a check every time each time you want to purchase a tax certificate or a tax deed. Once you have set up your corporation then you will be able to make your self-directed IRA checkbook controlled. This will help you in being able to grow your IRA for a secure future.
No Risk Investor specializes in helping its students effectively invest in tax liens and deeds. Having helped over 6,000 new investors to date, No Risk Investor is well-regarded in the industry and the best source for information, training, and tax lien investing tools.
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Many students ask how we research and read tax lien lists and what all the numbers mean? Also many students wonder why there are tax lien lists available from a year that has already past. The one thing that you want to understand is that it takes a year for a tax lien to be delinquent. So if you are looking at a list from 2009 or 2010 and it is now 2011 and you are wondering why the list isn't a current list, then let us explain the process a little bit more. First of all, if you are in the year 2011 then you will be working from a list of 2010 or 2009 depending on the state. Arizona is a state that waits for the taxes to be delinquent for two years before they sell a tax lien at an auction. Therefore, if you have a tax lien from the year 2009 it will be sold at an auction in 2011.
Let's take Florida for an example. If you have a tax lien from the year 2010 then it won't be sold until the first week of June in 2011. So the most current listings in Florida are currently from the year 2009. The next listings coming up will be in June of 2011 and the over the counter listings won't be until a couple of weeks later or the end of June 2011.
Next, when considering a list and you look at a parcel number and it doesn't have an address with it, then you will want to go to that county's assessor's website, the county's property appraiser's website, or the county's appraisal district, depending on what state you are in, to do further research on the property. Oftentimes, the list will only show basic appraisal, owner, and lien/deed information, but may or may not list all property information. Most of the time, this information is easily accessible through the county websites. Once you go to that county's website for the property appraisal then you will be able to plug the parcel number in and get the information you're looking for. This information will include the property address and usually it will break down the difference of land value and improvement value, helping you to make a good decision on your tax lien purchasing.
As for the lists on our website, we typically just leave the lists from past years on the site. Don't be offended.
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One of the things that have to take place when purchasing a tax lien is making sure that you have everything in order that is required by the county. If you are purchasing at an online tax lien auction, then you will already have these things in place.
First you want to make sure that you have a bidder registration number. Many of the counties have what is called a bidder registration form. You can obtain this from the website or call the county and have them fax one to you. This will give you a bidder number. If you do not fill out a bidder registration form, then you would need to send a letter along with your investment checks to the tax collector of that county or the collection department. Make sure that all of your contact information is on the letter. Even the tax liens that are purchased over the counter or after the auction will be assigned a bidder number to them. You will be known as that bidder when purchasing any tax liens, during an auction, or after the auction.
One more thing that is necessary when you purchase any tax liens, is a W9 form. This can be found on the irs.gov website under forms. This is assurance for the county that you will be responsible for the taxes on the interest that you earn. When you get a check from the county for the interest that you have earned then you will report the interest on your taxes. For people from other countries that want to purchase in the United States, they will need to obtain an ITIN number or an EIN number to fill out the W9 form with. This will allow them the opportunity to purchase tax liens from another country.
Once these steps are in place then you will be secure in your purchases. You may only receive a certificate by email regarding your recent purchase depending on what county you are working with, so if you would like a paper receipt then make sure that you request it from the county. One more thing to remember is that when you send out checks to the county, make sure that you send separate checks for each parcel being purchased. This will stop your money from being tied up in case one of the parcels that you want has already been purchased.
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Wednesday, 29 December 2010 15:11
Some Basic Steps for Over-the-Counter Tax lien Investing
Written by NRI Support
Many times I talk to students who say, "Do you have a step by step process that I can follow for tax lien investing?" In the website you will find that it is all there; however, there are some things that you have to learn first to understand the actual format that needs to be followed. So since we have established that there is a learning curve for all new investors, it will be faster for some than others. When I first started investing I still didn't understand just how to go about it. So, here are a few basic steps for you to follow.
Once you have decided what you want to do, tax liens or tax deeds, or both then you will have a direction to follow. I always look at the auction calendar to see when the next tax sale auctions are coming up. I do this because it will let me know, if I want to do over the counter investing, when and where to do it. Once a county has their tax sale or auction, and it is a tax lien auction, then you can be sure that anything that did not sell, providing that they offer assignment purchasing or over the counter purchasing, will be offered for sale shortly thereafter. For instance, if Arizona has their sale in the first week of February then the over the counter properties will begin being sold approximately two to three weeks after the sale.
Remember the saying that the early bird gets the worm? This process of over the counter tax lien investing is similar to the saying in that if you get the list before others then you have the first pick of the properties that are available. As the year goes by it becomes less and less likely to find good deals and towards the end of the year the pickings can be fewer and fewer.
So the first thing you want to do is decide where you are investing. Find out when the auction is on our tax lien auction calendar and then be ready to jump on the left over list shortly after the auction to get the fresh list of properties. Some of the counties are doing their county held certificates (or over the counter certificates) online and you will be able to find this information from studying the county of interest on the website. When you use the tools available to you, you will find listings on the website of all the tax lien states in the USA. This will cut down your research time and make it easier for you to establish when and where you want to invest. Knowing when the auctions are in any state will help you to grasp a focal point of when you need to be ready to invest.
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Tax Lien Investing
Subsequent taxing occurs when a county will allow you to pay the next years taxes on a tax lien that you have already purchased from a previous year's tax sale. Let's say for example that a person has a tax lien on a state that has a three year redemption period. In order for the person who owns the tax lien to be able to foreclose on that property he must own all three years of the back taxes. When a person has to own all three years he will have to purchase the tax liens possibly from other lien holders providing that his is the first lien past the redemption period. He then will purchase the next two lien holders liens from them including their interest so that he can begin the foreclosure process.
If a person has a lien for one year, and another has a lien for the next year and another for the next, then the person with the first lien must purchase the other two liens first before he can start the foreclosure process. When a person has the opportunity to purchase subsequent taxes then this eliminates that step of purchasing the other liens from the other lien holders because he was allowed to purchase the taxes subsequently and thus becomes the lien holder for the next year and the next making it possible to jump right in to the foreclosure process without any other purchasing of liens.
This is a great opportunity when available. Always ask the county of your choice prior to purchasing if they offer subsequent taxing on tax liens. If this is something a county offers then you will be a step and a dollar ahead securing your position and place in the foreclosure process.
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Looking forward to the coming of the New Year we will be able to get new listings of tax lien certificates on our website for the great state of Arizona. It is a state that offers 16% interest and has a compounded interest on top of subsequent taxing. This is great for those of us who want to hang out and accrue interest on our investments. It has a three year redemption period and will allow you the opportunity to do subsequent taxing.
Subsequent taxing is a good thing because you can pay the taxes for the property that you have a tax lien on prior to the next year's tax lien auction. This will make sure that you are getting in position to gain all three years of taxes providing it hasn't been redeemed on. If you do not pay the subsequent taxes then the tax lien will go up for auction the next year and you will have to purchase the lien from the person who bought it with the interest in order to get all three years so that you may begin the foreclosure process. Once you have paid the subsequent taxes they will be added to the interest and then the next year will have the interest added to the compounded price of the taxes paid and the interest.
For example, if you have paid 1,000 dollars for a tax lien then your interest is 16% making a total of 1,160 for the year. So if you pay the subsequent taxes for the next year you will receive interest on 1,160 dollars and not just the 1,000 that the taxes are. This can be great for those that want to invest while waiting and watching their money grow. It is also a good way to secure your position of tax lien holder by paying the subsequent taxes. If you pay all three years of taxes then you will be ready to move on to the tax foreclosure process which I will talk about another time.
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Tax Lien Investing
This is for those of you that are interested in investing in Indiana. On December 07, 2010 there is a sale for tax lien certificates in Cass County, Indiana. It will be at the courthouse and there are many properties to invest in. The way that it works in Cass County, Indiana is that you get 10% interest on the first six months of the tax lien investment and if it hasn't been redeemed on by then you will receive 15% on your investment for the next six months. So the average between the two would be 12.5% for the whole year if you were to average it out. There is a chance that you would bid more than the opening auction price because the bid method is a premium bid and the tax lien goes to the highest bidder. Anything that you bid above and beyond the opening bidder's price will receive 6% interest on it during the year. If you end up taking the property to foreclosure, which would be possible after the redemption period of one year, then the excess proceeds would go to the previous property owner. If you do not take it to foreclosure then the excess proceeds would go to the investor with 6% interest for the investment. Learn more about excess proceeds by searching for it on this blog by entering excess proceeds in the search box above. The website to gain information about this sale and others in Indiana would be www.sri-taxsale.com. Once you're on the website you will be able to select the county and the year that you're interested in. Then you select fetch and it will bring up the list of properties going for sale. The list can also be downloaded right through this site just by going to the download center and searching for Cass.
Indiana is a great state to invest in because it has tax liens as well as tax deeds. It also has Sheriff Sales making greater investment availability. Good luck to you who are going to be a part of this sale and any of the sales in Indiana!
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Have you ever wondered how to be the nice guy and still help people by not taking their homes from them? I recently talked to a person that was concerned with taking the home from the owner by buying the tax lien on the home that someone lives in. I went on to explain that first of all you are actually giving the person that owns the home a longer chance to hang on to their home by paying their back taxes. Sure they will have to pay more by paying some interest to you but you are doing them a favor and it's actually like giving them a loan on their taxes at a fair rate of interest. This buys them time and maybe a year from now, and the homeowner may have a different situation in their financial arena and be able to redeem their property.
Let's say perhaps that the homeowner doesn't get the chance to redeem the property and two or three years go by, you have purchased all of the tax liens and now it is going to foreclosure; you can be the nice guy by letting the homeowner now pay the rent to you and possibly do a rent to own and let them buy it back. There are many ways of helping the homeowner and still coming out ahead.
This is one where everyone has a better feeling about the situation at hand when your home has gone up for tax lien. You can work with a previous homeowner also if you are purchasing a tax deed. Perhaps it is in a redeemable deed state, such as Texas, where you have paid for the home but it still has a redemption period. This is a time when you will be collecting rent from the person who is living in the home. In order to help them out you may want to continue to rent to them even though they may not be able to redeem the home. This helps them to stay in a home and have a place to live, allows you to gain a property, and, if you choose to do so, you could turn around and sell the property back to the previous owner.
This really makes you the nice guy!!!!!
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With the U.S. economy in its worst position since the great depression with promise to worsen for the next couple years, many Americans wonder where they can find relief. Despite the historically dreadful economy there is relief in tax liens and tax deeds. Right now is the time to get involved with tax lien investing because it offers a unique investment opportunity. A tax lien is a unique investment because of three main reasons:
It is state mandated - Remember when the states were allowed to govern themselves without being sued by the federal government? Those were great times. Well there are still some instances where the states are allowed to govern themselves. States govern the tax lien and/or tax deed program in their individual states. That means that the state has set up regulations for how much an investor will make on a tax lien certificate and the life of the tax lien certificate (redemption period). Arizona has set laws that the annual return is 16 percent; Florida's law is 18 percent; Texas' law is 25 percent for every 6-month period. Tax liens are incredibly unique because the investment is regulated by the state. There is security found in tax liens that cannot be found anywhere else.
Tax liens are backed by real estate - This is another huge factor that results in increased security for the investment. Not only is the tax lien or tax deed investment state regulated, but also each tax lien is backed by the same property that the tax lien was issued for. That means that if the property owner were to fail to pay delinquent taxes during the redemption period, then the investor can take ownership of the property. Tax liens are unique because they are extremely secure being backed by real estate and state regulated.
Tax lien certificates promise huge returns - The third of the three main reasons that tax sales are such a phenomenal place for investing is that tax lien certificates promise extremely high returns. Annual returns range from 8 percent on the very low side to 50 percent on the high side. But returns can grow exponentially when you take ownership of the property if the property owner fails to pay the delinquent taxes. The other advantage of tax lien properties is that the investor controls the return. The investor doesn't need to accept 8 percent if they're interested in 8 percent; they simply need to invest in a state with higher returns.
Americans face the daunting task of making money and keeping the money that they make. Tax lien and tax deed investing offers an opportunity to make money that is unrivaled. Real estate is dangerous and the stock market is hopeless. We can help you make real money and build your retirement like no one else on the planet. The thousands of investors we have taught thus far evidence that we can help anyone create financial independence.
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.
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