Tax Lien Auctions – The 4 Major Flavors

Tax Lien Auctions: What Are the Major Formats? Tax lien auctions are conducted differently in each state. Though it’s common to see two states with seemingly identical tax lien auctions, there are always at least minor differences. For example, South Carolina and Indiana tax lien auctions are very similar. In each case, the state auctions a tax lien and allows competitive bidding. The owner has exactly one year to pay the tax lien off (called a redemption period) in either state. Interest rates even end up being similar even though they’re paid out differently. However, there are likely different rules [...]

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What Is A Tax Lien Certificate: Misconceptions Debunked

What Is A Tax Lien Certificate? “What is a tax lien certificate” is a question that late night infomercials try to answer in a misleading way. Let’s look at some of the top misconceptions that arise during these attempts to answer, “What is A Tax Lien Certificate”… Misconception #1: What is a tax lien certificate? A: It’s an above-market return on your money, guaranteed by the government! Truth: Tax lien certificates are guaranteed by nobody. IF the owner pays the certificate off, the government will definitely pass those payoff funds onto you. But if not, you will have to take [...]

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Tax Deed Auctions

Tax Deed Auctions: Can You Really Get a Steal? It can be exciting when tax deed auctions hit the paper each year in my area (or each WEEK in some other areas). Why? You routinely see tax deed auctions where the starting bid on properties is incredibly low! Sometimes less than $1000 for a rentable house, and as little as $4000 for a house that may be worth $100,000 or more. And yes, $100,000 properties do go all the way through the tax sale process and end up at tax deed auctions. That’s a crime, because we shouldn’t have let [...]

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Tax Deed Certificates

Before we talk too much about tax deed certificates, I should tell you that they actually don’t exist! Tax deed certificates could refer to either “tax certificates” or “tax deeds” but probably not a combination of the two. To help in understanding the difference, we’ll look at both possibilities when referring to tax deed certificates. I’ll break down the phrase ‘tax deed certificates’. Tax Deed Certificates – What it Could Mean Tax Deed Certificates – ‘Tax Deed’ is the proper way to describe a deed granted to a tax sale buyer, which gives the tax sale buyer title to the [...]

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Researching Deals Before Contacting Owners

Most real estate and “found money” professionals invest way too much time doing advance prospecting (otherwise known as researching deals) before reaching out to potential clients. Here’s a hard reality about our business: You will only successfully contact (much less do deals with), a relatively small percentage of people on your prospect list. Therefore, you’ll waste a ton of time and money doing advance research on deals that never end up getting off the ground, if you try to answer unknowns in advance. The Harsh Truth In the end, you will likely never even get on the phone with a [...]

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Tax Overages: Why Would An Owner Still Sell Cheap?

Tax overages were at the center of a great student question I received today. First, let’s review tax overages briefly. Tax overages occur when a property goes to a tax sale auction, and the county receives more for the property than what was owed. Here’s a simplified example, for a property that’s worth about $20,000: –$5,000 in taxes owed, bidding starts at $5,000 –Bidding ends at $18,000 –County takes the $5,000 owed, and still has $13,000 left over This $13,000, and other excess amounts collected at the sale, are tax overages, or surplus funds, excess funds, or just “overages”. The [...]

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Tax Foreclosure Property – New Alternative to Auctions

Thinking about going after some tax foreclosure properties? If you’re planning on attending a tax lien or tax deed auction, be prepared for these roadblocks to success: Tax Foreclosure (Lien) Sales -You will have to research hundreds or thousands of liens to buy just a few -You can only inspect potential tax foreclosures from the outside -You will need all cash at the sale -Because of competition at the sale you will not get all the liens you wanted. Or you’ll have to bid above the minimum -You will need to hire an attorney to do legal noticing -You will [...]

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Mortgages on Tax Sale Property

Subscriber Question – Mortgages on Tax Sale Property Rick everything you said sounds wonderful, my only issue is mortgages on tax sale property. Getting a deed for little to nothing is great, but how do I know if it is free and clear. I’m concerned about mortgages on tax sale property. I would hate to purchase a property for $200 and still have to pay liens and maybe a mortgage. DeedGrabber’s Answer: My ebook (available here) explains that in detail. But here’s the answer: First, realize that liens and mortgages on tax sale property ARE NOT wiped out when we [...]

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Quick Sale Price – True Market Value for Fixers

A quick sale price is the only way to go when selling your DeedGrabber properties. In my last post, “Determining Property Selling Price”, I showed you why you mustn’t price a property based on what’s owed on it, but rather, what the market will bear. Here’s how to actually compute that. The “Five-Minute” Quick Sale Price Appraisal The way to find market price (and thus quick sale price) is to follow these steps: 1. Input the property zip code into Realtor.com and see what the lowest-priced properties are in that market right now. 2. Plan on selling for even less [...]

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Determining Property Selling Price

Determining Property Selling Price For Quick Sale – Without Leaving Money on the Table Students sometimes ask me how to “compute” a property’s selling price when it’s time to sell. I’m not sure if they mean “how to determine it”, or “how to mathematically compute it” – big difference. Determining property selling price based on what your expenses will be, is a surefire plan for disaster. You need to sit down and see how much the tax liability and other costs will be, before you ever buy the property. That consists of: 1. Redemption amount (call county to get) 2. [...]

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