Are you looking into tax lien investments? You are on the right track. They are one of the most amazing high return investments that offer low risk.
Like any investment, knowing what you are doing is key.
The right information can make you a lot of money. On the other hand, a lack of information can result in a disaster.
I always say:
You need to have clarity as an investor.
There is a lot of information and misinformation in the marketplace about tax lien investments.
But with so much noise, it is hard to make the right call.
The fact is…
There is a lot of scope and opportunity in these investments.
National Tax Lien Association (NTLA) research confirms every year America’s counties fail to collect $14 billion in property taxes.
All you need to have is the right information.
What Are Tax Liens?
I am just going to go over the basics first.
You already know that every piece of real estate in the United States is subject to property taxes. And every owner of real estate has to pay these property taxes each year.
Now, many owners fall on tough times or are involved in legal disputes. Whatever their reasons might be, there are times when they are unable to pay these taxes.
And if they fail to pay these taxes, their property becomes tax delinquent.
That can lead to the property being repossessed by the county or municipality. And that is known as tax foreclosure.
Now, you may be wondering…
How long can a property go tax-delinquent before it is seized by the county?
Well, it all depends on the state. Each state has its own timeframe. If the taxes have been delinquent for their defined period of time, they will seize the property.
As an example, it could vary from 2-5 years. Again, it all depends on the state. But none of them will wait forever.
However. the county still needs to fund the daily services of police, fire, hospitals, schools, roads, etc.
So, tax liens are the enforcement method used by the government for the collection of property taxes.
Tax lien sales directly benefit local governments, delinquent taxpayers, current taxpayers, and investors.
Local governments can collect the necessary cash to fund crucial services.
Delinquent property owners get time to pay outstanding taxes to keep their homes.
Current taxpaying property owners pay a decreased risk of higher taxes resulting from widespread nonpayment.
And all of this creates an opportunity for you to step in as an investor.
You basically pay the owner’s taxes by investing in tax lien certificates.
What Are Tax Lien Certificates?
So, when you buy a tax lien certificate, you are in effect paying someone else’s property taxes for them.
And tax lien certificates pay you a rate of return. They also give the property owner a redemption period. A time period to repay the taxes.
Think of it this way…
The property is acting as collateral for the tax lien certificate. If the lien is not paid back within the redemption period you as the lien holder can foreclose on the property. And become the property’s owner.
The opportunities are abundant.
In several counties and municipalities in the United States, local governments have millions of dollars outstanding in overdue property taxes.
When you pay these taxes, the government gives you the right to receive all of the outstanding tax money due. Along with the fees, high interest, and penalties.
In a sense, it’s like a mortgage.
These Tax Lien Certificates are secured by the real estate they’re attached to.
So you are not actually buying the real estate. You are just buying the government’s lien on the real estate.
Basically, to encourage taxpayers to pay their property taxes on time…
The government charges high-interest rates which are passed directly to you.
To pay you back, you receive government-guaranteed checks of 16%, 18%, up to 36% interest. And these are paid directly to you.
Think of it this way…
You are receiving a continual, high-rate income from the government.
You can buy Tax Lien Certificates secured by different properties. And in different locations in the same state, or in different states.
There are thousands of these available at different price points. It could be a low as $50 and as much as $1,000 or much more.
Tax Lien Investments: 3 Ways To Purchase
Most counties hold a tax lien sale annually.
You will have to research and find out:
- Which counties and states are right for you
- And how do they sell their certificates
So, it’s very important to know your jurisdiction.
While it varies from state to state, you can make tax lien investments in 3 different ways:
- At live auctions
- At online auction websites
- Over the counter
Let’s look at each of them briefly.
Live on-site auctions are the oldest and most common method any county uses to conduct tax sales.
What this means is you’re attending the auction in person.
You’re going down to either of the below:
- The county courthouse
- An assembly hall
- The courthouse steps
Basically, you’re bidding certificates in some type of a county approved setting.
In some states, this may be the only way to buy tax lien certificates.
Online Auction Sites
There are websites dedicated to auctioning off tax lien certificates.
You will also find important information such as tutorials, auction dates, rules, and tax sale lists.
These websites offer you the opportunity to practice and take part in trial auctions.
This allows you to participate in the auction before the auction even takes place.
The best part? It happens every single day. So, you can try bidding on tax lien certificates to get a feel of it.
Over The Counter
These are the tax lien investments that were offered at the live auction but weren’t sold.
You could physically go to the county office. Or you could go to the county auction website.
Since you directly invest, you don’t compete with bidders. Bidding can increase the price or lower the interest rate return. So, that’s a huge advantage.
Now before you go out to make tax lien investments, you should know a few terms.
Face value: This is the amount of the original tax lien on the day it was offered on the tax sale. The interest rate return is earned on the face amount.
Redemption value: This is the current amount of the tax lien after it accrues interest. This value increases monthly as new interest is earned.
I will give you an example.
Let’s say you buy an over the counter tax lien that is 1 year old. When the lien was originally offered it was $100. Let’s assume it earns an 18% interest rate return. So after one year, the redemptive value of this lien would be $118. And this is the amount that you would pay to buy this over the counter.
The Types Of Bidding Systems
I will keep it very simple.
Each county has a different bidding system for tax lien investments.
Let’s look at an overview of these systems:
- Bid down the interest rate
- Premium bidding
- Bid down the ownership
- Rotational bidding
- Random selection
Bid Down The Interest Rate
This is the most common method that is used with tax lien investments. This is how many different states work. You’re going to be bidding down the interest rate.
Let’s say if it starts at 18% and somebody bids it down to 17.5% and then you bid it down to 17.25%.
Basically, this goes on until it gets to the lowest bidder. Let’s say the lowest bid is 16%. That tax lien certificate would be awarded to that lowest bidder. The one who bid the lowest interest rate return.
Remember, when you buy over the counter, you get the highest interest rate return. So, in that case, there is no bidding.
Here you bid up the price of the tax lien. In some states like Colorado and New Jersey, you will find this.
Let’s say the tax lien is $100, to begin with. In the premium bidding system, you would bid to buy this tax lien for $101 or $102 and so on.
If you’re willing to bid up the highest on the property you will be awarded the tax lien certificate. When you’re doing premium bidding it’s important to know exactly how high you’re willing to go.
Because that affects your overall return.
Let’s say if you bid too high and you hold that tax certificate for a year…
You may not earn the interest rate you were looking at. Or you may not earn any interest at all.
This method can be very effective. But you have to do proper research. Do your due diligence on exactly how much you’re willing to bid on your tax lien investments.
Bid Down The Ownership
This is not a common system. It’s a rare type of bidding system that is not favorable among investors.
Here you can be offered the chance to bid the ownership down when purchasing tax lien certificates at auction. And as bidding gets lower, you will get less percentage of the property. Hence, the profits.
This makes it the most unsuitable of all the bidding methods.
This type of bidding proceeds in an orderly manner.
When The first property is announced and if you are the 1st bidder…
You get the chance to take the lien. If you decline, the 2nd bidder gets the chance to take it.
This will go on until someone takes the lien (or until it is determined that no one wants it).
Then the process will move on to the next property. Here, the 2nd bidder will get the first opportunity to take the lien (even if he/she took the first lien).
The bidding proceeds the same way through each of the properties being offered.
There are some counties that prefer the random selection method when selling tax lien investments.
It is the cleanest method to offer investors the chance at the properties available for sale.
In this process, every bidder is given a particular number and then a computer draws a number for every property that will be in the auction.
Think of it this way…
You and all investors’ names are put in a hat. Whoever’s name is drawn out gets the first tax lien on the list.
The first bidder has the opportunity to accept or deny the price of the taxes due. If the bidder denies, the next number will then be chosen and the process continues.
The advantage here is that you get the highest interest rate return for that tax lien. Because there is no bidding of the prices involved.
However, you don’t get to take your pick. But usually, you will find a lot of tax lien certificates on offer and very few investors at the auction. This way you could find multiple tax lien investments to make.
The Myths About Tax Lien Investments
There are a lot of misconceptions about tax lien certificates.
When people think of investing in certificates, they think there are a lot of risks involved.
It’s just that there is a lack of knowledge about these investments.
You’ve probably heard the following: “If there’s no risk – there’s no reward.”
That’s not the case. Lack of information is the problem.
Look at what happened to Blackberry stock in 2008 and you’ll know exactly what I mean…
Thousands had their portfolios decimated as Blackberry plunged from $138 dollars all the way down to a measly $7.50.
Yet at the time, no one would have thought twice about their investments.
Talk about risk.
Let me clear these myths about Tax Lien Investments:
- You don’t need a lot of capital (start with just a few hundred dollars).
- Can be done from anywhere in the world
- You don’t need to have a good credit record
- You don’t need to borrow money
- And you do not (and definitely shouldn’t) be taking on a lot of risks
But you have to do your due diligence before you jump in. Learn from an investor or a financial advisor.
Use their experience to make the right investment and earn significant returns.A teacher that is an expert in every subject is ‘experience’. The same goes for investments. No one teaches to invest like experience. Click To Tweet
With that said, I will share with you my experience of using tax lien investments to make a lot of money.
Tax lien investments can be high-performing income-producing assets. But they require a degree of effort, expertise, and experience.
To reap the benefits, you have to know exactly what to do.
The Benefits Of Tax Lien Investments
As an investor, I don’t like leaving things to chance. I invest only after knowing all the angles.
Over the years, I have developed in-depth knowledge about tax lien investments. I have used this knowledge to build a lot of wealth.
What I found about tax lien certificates:
- They are very easy to buy.
- They are recession-proof.
- The law protects the money.
- The high-interest returns you get are mandated by state law.
- They don’t rise and fall like the stock market. You get returns regardless of market fluctuation.
- They are not well known.
Most importantly, it doesn’t matter if you have a lot of capital, to begin with. It’s the most democratic of investments.
What do I mean? Well, tax lien investments give all types of investors the chance to make a fortune.
In fact, I call them one of the best high-return and low-risk investments. These are the investments which the rich use to get richer.
I have even called them “The Wealth Builders of the 21st Century”.
Now you may be wondering if they are so lucrative…
Why Are Tax Lien Investments Little Known?
The answer is quite simple.
Stockbrokers, financial planners, and bankers can’t make commissions on them.
Most bankers take the money you give them and use these same strategies to reap the high yield returns.
And what do you get? A lousy 1% return.
In essence, they’re basically using your money and these exact investments…
To make themselves a fortune.
That’s why they pray tax lien investments are not revealed to anyone. And most of all how to take full advantage of them.
But, these investments are nothing new. They are just not common knowledge.
They have been a proven investment strategy for years. These principles have existed for hundreds of years.
All wealthy people have been using these secrets for decades.
And if you know how to properly do it…
You’ll probably never want to keep your excess money in your bank again.
Recently, I decided to share this information with an audience. Because it’s high time people got to know about tax lien investments.
I wanted to show people how it’s done. In essence, I wanted to share all the secrets of this investment. An investment, which the institutions themselves use, to make money.
Most importantly, teach you how to use these tax lien investments to your maximum advantage.
I have decided to reveal it all in a one-time event.
Learn It All From Me
Once you know about how to properly make tax lien investments. And learn to take full advantage of them…
You’ll wonder why no one else is doing the same.
You’ll wonder why anyone would even bother with the roller-coaster ride of forex trading or the stock market.
What it would mean to you if you could invest in tax lien certificates without the typical risks?
Certainly, it would give you a predictable and sustainable way to grow your net worth. And you will ultimately be able to build for yourself the lifestyle you want.
These are investments with virtually no-risk. You just need to know how to make them work for you. And I am going to teach you how to do it.
In this event, we will uncover:
- The best-kept investment secrets of the wealthy.
- How to thoroughly review an investment before putting one single dollar into it.
- What tax lien investments are all about.
- What your exit strategies are.
- And what you need to do to make these investments work.
Not only will you learn these secrets, but I will also give you the chance to…
Look Before You Leap
For “safety-first” investors, it is important to “try it out”.
And this event will offer you the chance to investigate this investment further. Have a “dry run” so to speak.
Once you have learned all the secrets of tax lien investments…
You’ll be able to strategically grow your net worth.
So, reserve these dates on your calendar as your financial life is going to change…
February 23rd – 24th, 2020 at the MGM Grand Hotel in Las Vegas.
Unfortunately, this event has strictly limited seating. And because of how intimate this setting is, I’m quite reluctant to do this again.
Reserve your spot before it’s all sold out.
If you don’t want to attend, can you keep this a secret?
Do not share this with your banker, financial planner, or stockbroker. Most financial institutions would rather die than have you attend this event.
They know once you learn how to better invest your savings, you won’t need them or their services anymore.
So, whether you decide to come or not, just do me a favor and keep it to yourself.
Update: The event is now sold out. For those that got in early and booked tickets in advance – it’s going to be an amazing event.
But don’t worry if you missed out or couldn’t make the trip to Vegas. You can get access to the live stream I asked my production team to set up. This way you’ll still be able to take advantage of it from the comfort of your home. You’ll also get a permanent recording so you can always go back and review.