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 action to do a tax foreclosures on the delinquent property. If it's worthless, you've lost your money.
Misconception #2: What is a tax lien certificate? A: It's a miraculous way to get properties for some amount like $158.33
Truth: Sometimes you can buy a tax lien certificate for $158.33 or some such small amount. However, it's likely a property that's worth only a few thousand dollars, not $50,000 or $100,000 like you may have heard. Occasionally you can buy a lien against a valuable property for extremely cheap, like only a few hundred dollars - so read on...
Misconception #3: What is a tax lien certificate? A: You will obtain a lot of properties through the tax lien certificates you buy.
Truth: Most tax lien certificates pay off. No property will be acquired by the investor.
Misconception #4: What is a tax lien certificate? A: It's an investment that can earn over 10% per year in return, and sometimes as much as 50% or more in a year.
Truth: Actually, not really a misconception. You CAN earn very nice interest rates when you buy tax lien certificates! However, you must research the liens you buy very well to make sure you don't get stuck with a worthless property.
If you want to take a semi-active role in investing your money, and want to earn above-market interest rate on your money, tax lien certificates can be excellent.
Just ask yourself the question again - "What is a tax lien certificate". If the answer you hoped for was "a way to get property unbelievably cheap", I have bad news. Many tax certificate investors go for years without obtaining one property.
If the answer you wanted to "What is a tax lien certificate" was "a way to carefully invest your money at double-digit interest rates", then learn your local rules and go for it!
Did you want to get property for $200 and resell for thousands in profit?
The good news is, you still can! All you have to do is work with the owners of properties that are about to be lost to tax sale. Then you really CAN buy unwanted properties for $200 - because the owner doesn't want them.
What is a tax lien certificate? It's an opportunity to get properties cheaply with no competition. If you know the insider secrets.
Discover these insider secrets from me, a 10-year tax sale veteran - with my "Underground Tax Sale Strategies" report available free below.
Next time you hear "What is a tax sale certificate", you'll answer "it creates all of my bargain property buys - but I don't go to the sale!"