The first question you might have is “what is a tax lien?” Basically tax liens are personal debts on real estate in which the property owner is responsible for the payment no matter what. So that gives the buyer some security on the investment (to a certain degree) which is great and makes tax lien investing an attractive investment to consider.

So how do you actually purchase a tax lien then? Well the first and most well known choice is to simply attend an auction to bid but it’s not the only way (but perhaps the best.) You can also look for “left-over” liens which can usually be found through the mail but this has become more difficult due to the growing popularity of tax lien investing.

So if you want to purchase a tax lien the best way to do so would be to go to an auction in person. There are also online auctions that are held but your best bet would be to go in person. One other thing to consider is the fact that the liens are backed up with a “Government Guarantee” which makes people think that they will get their investment back no matter what happens.

In all reality if you purchase a piece of property that is worthless be prepared to lose your investment and hang on to the property. The guarantee pretty much says this, you will always have the property if worse comes to worse. I hope this short little guide on how to get started in tax lien investing has helped you, good luck!

The best thing about tax lien investing is that it does offer some sort of security. Land is always a good investment because of this and is great for those who are not huge risk takers. When you purchase a tax lien you will always have the land in the end if worse comes to worse. Just keep that in mind and you will realize that it’s literally one of the smartest investments you can make.

When property owners fail to pay their taxes the property is seized and their loss becomes an opportunity for you and me. Now to actually purchase a tax lien certificate you will need to attend an auction. But if you’re smart you will do your research before just jumping into a bid. You should get the lot number from the auction before hand and check out the land. Make sure that the land is in good shape and is located in an area that guarantees resale.

Tax lien auctions are not that hard to understand. Many communities usually hold them 1-2 times a year so just do your research. To become a qualified bidder for the auction you need to prove that you actually have cash in your hand and are ready to purchase. Unlike the standard auctions where high bids win the auction it’s the low bids that end up winning. What I mean by this is simply that the bidder who bids for the lowest interest rate is the one who will walk away with the tax lien. Good luck!

Tax lien auctions are really not much different than the standard auction that most of us love and hate. Each state and county has different rules when it comes to tax lien auctions but the standard structure remains the same. But you seriously might want to consider checking out your state and county to make sure what special terms they have for the auction before going to one.

The auctions are usually held at the county courthouse and most require immediate payment after the auction is completed. It’s very important to research what you are bidding on days before the actual auction starts. You want to know what you are going to be purchasing so be sure to do your research here.

The person who bids on the lowest interest rate will come out as the winner, so the auction is reversed so to speak compared to the standard auction your most likely use to. In some states though the bidding process is not even present and the properties are just listed with the counties. If this is the case then the first person to show up and front the tax money to purchase the land is the winner.

Most states today go by the actual bidding process with the auctions and even give the original property owners a little time to come up with the tax money. But like I said before, it’s very important to check out how your state and county “play the game” to get the full advantage over your competition.

The benefits of tax lien investing are not hard to see if you know what you are doing. The great thing about tax liens is that they can offer a very high government backed yield on a nearly passive investment. Not only that but sometimes you can end up with the bonus of actually owning the property themselves which could profit by hundreds to thousands of a percent.

But how much can you really make with tax liens? The range varies but the bottom line is you can make a lot of money just off one investment. Another thing that is so attractive about tax liens is the fact that it’s a fairly low risk and low maintenance investment compared to many others out there.

Perhaps one of the most attractive benefits of tax lien investing is that you can start off small and work your way up to bigger investments over time. Tax liens can be as low as only a few hundred dollars which is good news for beginners who are looking to get their feet wet in the business.

Something else to note is that tax lien investing is considered to be a pretty secure investment by many. The reason this is true is simply because the liens are backed up with real property. The end result and how to get a return on your investment all boils down to how successful the auction turns out in the end. The public will actually bid on your auction and this will be where your payoff comes for you.

]]> http://articles.taxlieninvestingguide.com/2009/07/16/the-benefits-of-tax-lien-investing/%/feed Tax Lien ArticlesIf you do not know much about the benefits of tax lien investing then this short article will help you underIf you do not know much about the benefits of tax lien investing then this short article will help you understand better. Tax liens are somewhat new to many people out there and create a lot of confusion simply when the name is brought up. The benefits of tax lien investing are not hard to see if you know what you are doing. The great thing about tax liens is that they can offer a very high government backed yield on a nearly passive investment. Not only that but sometimes you can end up with the bonus of actually owning the property themselves which could profit by hundreds to thousands of a percent. But how much can you really make with tax liens? The range varies but the bottom line is you can make a lot of money just off one investment. Another thing that is so attractive about tax liens is the fact that it’s a fairly low risk and low maintenance investment compared to many others out there. Perhaps one of the most attractive benefits of tax lien investing is that you can start off small and work your way up to bigger investments over time. Tax liens can be as low as only a few hundred dollars which is good news for beginners who are looking to get their feet wet in the business. Something else to note is that tax lien investing is considered to be a pretty secure investment by many. The reason this is true is simply because the liens are backed up with real property. The end result and how to get a return on your investment all boils down to how successful the auction turns out in the end. The public will actually bid on your auction and this will be where your payoff comes for you. http://articles.taxlieninvestingguide.com/2009/07/14/what-is-a-tax-lien/% http://articles.taxlieninvestingguide.com/2009/07/14/what-is-a-tax-lien/%#comments Tue, 14 Jul 2009 01:50:31 +0000 Tax Lien Articles http://articles.taxlieninvestingguide.com/?p=43 What exactly is a tax lien you may be asking? Well that’s a good question; if you’re new to Real estate the term can be quite confusing at first. Let’s go ahead and take some time to find out exactly what a tax lien is. Once you learn what a tax lien is and why it can make you a lot of money then you can move on to the more advanced strategies.

Basically a tax lien is just an investment like anything else. The benefit here is that the tax lien is a pretty secure investment. No matter what you do in the end you will end up with just the property at the worst. If you purchase a tax lien and the property turns out to be “worthless” you will still have the property and can eventually do something productive with it if you play your cards right.

Liens are basically divided into two groups. There are legal and federal liens, both of these can be enforced by federal law. To create a valid lien it’s important to make sure that the party really does have ownership. Basically in the end it all boils down to a couple of key points. I could bore you all day long with little technical details, so here’s the one thing you need to know.

“A tax lien is basically when a property owner fails to pay his/her taxes on his/her land. This now becomes a chance for you to profit if you do your homework. Yes you can make a profit, a big profit!”

So now that you know what a tax lien is it’s time to see how you can get started. Don’t rush into this though, you need to seriously research and study how to become a successful tax lien investor first.

When we say investment, we typically think of automobiles, yachts, and lands. While this is proven as a good investment, what we don’t realize is that good investments have another aspect that can be found mostly on contracts, deeds, and other legal certificates. Most of us might not be aware of investing in tax liens, but this can be very profitable if we can only master this stuff.

Liens are charges that serve as a security interest to assure payment of a debt or any other obligations that arise from lawful operations. They are used as a sort of collateral for both real and personal properties. The property owner, or lienor in legal terms, grants the lien, while the person who takes advantage from the lien is the lienee.

You might wonder on how it can give you profit, but if you as you gain experience and become more exposed to this business, you can certainly get a hold of it. First thing to do if you are investing in tax liens is to have a list of available liens from your local government. This can be no problem because unpaid property taxes are usually aplenty in every local government. Next is to determine the tax ID, or the folio, or the parcel number of your target property. This is needed in determining of the lien is already taken and other pertinent information n the property such as its location, owner, and assessed value. The last step is to ensure that your expenses in acquiring the lien will be less than its worth. This is very important because their difference is basically your profit. If the property worth is $5000 and acquiring its lien will cost you $10000, you will lose half of your investment and thus, you should always ensure your success by doing further research on the lien that you are planning to buy.

Investing in tax liens may seem very difficult at first. You need to acquire knowledge first before venturing in this business. Try to attend lien auctions if possible to see how things are going and researching for legalities related to this is not a bad idea.

http://www.taxlieninvestingguide.com/pmb.html

I know it sounds kinda weird, but you have GOT to see this! I couldn’t believe my eyes, but this young kid is… THE REAL DEAL. No joke. In this free video you’ll see, Patrick and his real estate investor buddy, Trevor, take you both down “memory lane” revealing to you 4 of their Real Estate investments they funded 100% with private money.

http://www.taxlieninvestingguide.com/pmb.html

What you’ll find is the sudden realization that, “You can do it too.” In fact, Trevor, bought his first property at only 21 with $600 to HIS NAME. Patrick, bought his first property at 21 too, with none other than pure persistence. This video is truly inspiring for ANYONE wanting to make a fortune in the real estate market. Seeing is Believing…

http://www.taxlieninvestingguide.com/pmb.html

Almost forgot, when you get there, you’ll want to enter your email address. There’s a whole members area with this guys Private Lender Powerpoint Presentation and some other cool training videos for you.

http://www.taxlieninvestingguide.com/pmb.html

1. Hang Back, Jump In – Newcomers to tax lien bidding are well advised to spend the first while watching and listening. You’ll be able to acquaint yourself with the procedure used by the county you’re in, and align yourself with the tempo of the competing bidders. Typically, there isn’t a second to lose in the fast-paced world of tax lien bidding. Hesitation in placing your bid can lose the lien for you. So sit out for a bit and observe. Then, matching the pace of your competitors, start bidding in a loud, clear voice.

1. Time to Go, Stay Put – It stands to reason that at a day long auction, many of the bidders will leave for a lunch break and some will leave before the auction is over. It is precisely those times that add opportunity for you if you are one of those who stays. There’s less competition as there are fewer people in attendance. Take advantage of this strategy to make more money!

1. Size Does Matter – Many times you may find large financial institutions among your competitors. If you have a chance to bid against them, one word of advice – don’t. With millions of dollars at their disposal, you will not make much profit if you manage to win a bid. They don’t need to make a large margin, but making as much profit as possible should be one of your goals.

There are more bidding strategies, and I would really suggest that you read Tax Lien Riches from www.taxlieninvestingguide.com to learn the rest of them, but these are important ones that can assist you a great deal with your tax lien bidding.

One other final piece of advice that I can offer is, stick to the smaller counties. This is especially good during your learning curve. Often, there are fewer attendees, and not enough liens to attract the big banking institutions.

I wish you the very best of luck as you continue to travel a profitable road. I hope that these 3 Success Strategies for Bidding on Tax Liens will help you on that journey.

Forewarned is Forearmed – the 3 Pitfalls to Avoid When Tax Lien Bidding

The following is a partial list meant to help those who are new to the bidding process. While you may not want to actually miss a tax lien auction because of these points, at least learn all you can so you are walking into the situation with a solid knowledge base. Not knowing what you’re getting into may mean little profit, and the waste of a trip to the auction.

1. Competition from the big boys. We’re talking large financial institutions such as banks that have enormous bankrolls at their disposal. It depends on which bidding system the county you’re bidding in uses of course, but those guys don’t need to earn as much money as you do, and could drive the profit margin way down. There is a chance that if you’re competing with a bank on a bid and you win you, you don’t really win. You may not make enough money to have made it worth it, which means you’ve wasted your time and your money.

2. Low rate of return. Again, it depends on which bidding system the county uses. If, for example, they use a method that involves selling the lien to the lowest interest bidder, than you may come away making very little. Similar to above, you need to keep a sharp eye peeled to make your smartest investments.

3. Bidding on a lower property percentage. There are a few counties that still practise the Bid Down Ownership system. With this method, the person who bids to accept the lowest amount of ownership on a lien property wins. So to speak, anyway. You will end up only owning a portion of the property. When it comes time to foreclose, the logistics usually prove to be a nightmare. Not only that, it can take forever for it to get all sorted out, and for you to get any money. This is one pitfall that you may want to avoid above all.

Most of the time, pitfalls are not so bad if you have a lot of information and a little experience under your belt. Once you have a good understanding of how the bidding systems work, you can make an educated assessment on whether or not an auction is worth attending. After awhile, you’ll be able to quickly size up the best opportunities and take advantage of this highly lucrative type of investing.

In order to learn everything you need to know, check out Tax Lien Riches, by Andrew Kestler. He explains everything in plain English, and spills all the important details that explain on a deeper level the 3 Pitfalls to Avoid When Tax Lien Investing.

The main problem with cheap tax liens is that they are usually associated with properties which have little or no resale market. A worthless lot, or one that is hard to sell is going to change that cheap tax lien from an asset to a liability. This is not the type of investment you want.

Another downside is the fact that the types of properties mentioned above seldom get redeemed. Usually, the owner of a property will pay their lien off within the specified period of time and take back ownership. In the case of a worthless piece of land, the owner often doesn’t bother. You can get stuck with it.

How do you know if a property is worthless? First of all, do your homework well. Research the property enough to know what you’ll be getting into if you buy it. For example, is the listing just a tiny lot that can’t be used for anything? Perhaps it’s nothing more than an access route for other properties, or has hazard wastes and like. These are things you need to know to avoid ending up with them.

Typically, the more valuable properties have more expensive liens. That makes sense of course, but shouldn’t stop you from practising due diligence. Check those properties out, too. Your best bets are to look at liens over $500 or $600 with single family homes on the land. They tend to have a lower incidence of the problems mentioned previously.

Armed with the knowledge of your research, you should be able to bid on a lien with a fair bit of confidence. I would suggest that you also read Andrew Kestler’s book, Tax Lien Riches before attending the auction to prepare yourself for the bidding process, as well. It is available at www.taxlieninvestingguide.com.

Don’t be scared off Cheap Tax Lien Investing, just be cautious. You will occasionally come across a good property for cheap, but that will be the exception not the rule. Do your homework, read Andrew’s book, and you’ll not only do well, you’ll make a lot of money, too.