Friday, May 31st, 2013 by adminNow is the best time to invest in government issued Tax Lien and Tax Deed Certificates; an investment strategy utilized by a small group of investors to generate wealth for over 100 years.
What is Tax Lien Investing?
Counties in the USA depend on income from property taxes to pay for roads, firefighters salaries etc. When a homeowner does not pay their property taxes for a significant period of time, the county will auction of the property and offer investors enormous incentives to cover the delinquent tax payer’s property bill.
Enormous investor incentives?
YES! In fact, in one my favourite states to purchase tax liens in only two things can happen almost every time you invest. You either get a high interest return on your investment of 25% in 6 months or less or you acquire property for a fraction of their value.
When you purchase a Tax Lien in this state, you get ownership of the property right away and can begin collecting rent.
The former property owner has a redemption period of 180 days to pay you back what you paid for the property at the auction + a 25 % interest penalty to get the deed to their property back. This 180 day window is called “the redemption period”.
Confused? Stay with me.
Think of the redemption period as like a time clock. When you purchase the property at the auction and register the deed the 180 day redemption clock begins to tick immediately. The former property owner (I say former because for all intents and purposes the property is now yours) has 180 days to deliver a cheque, made payable to you, for the price you paid for the deed at the auction + a 25% interest penalty. If they fail to deliver payment to you before the 180 day redemption clock runs out of time then the property becomes 100% yours!
If the delinquent property owner delivers the payment to you, the investor, in full and with the penalty payment anytime before the redemption period has expired, they can reclaim the deed from you. In this case, the investor has made a 25% return on their money in a very short time frame of six months (180 days) or less. Not bad!
This is a two pronged investment strategy: either you get a high interest return on your investment within 180 days or you obtain 100% ownership of the property and are free to sell it or hold on to it as you see fit.
Our students have purchased properties at Tax Lien auctions for as little as 10 cents on the dollar including a house for $4000!
Contact us at: info@taxlientraining.com to learn more!