Tax Lien

Tax Liens & Mortgage Notes
12yFollow

Tax Lien

Eric Sturdivant
Wake Forest, NC · Member since 2013 · 2 posts · 5 votes

Hello I starting a new passion in life in real estate and I was told that starting tax lien properties is a great way to create cash flow. I wanted to know what would be the first step for going in this direction

5Reply
131 views

Most Popular Reply

David Jones
Fairhaven, MA · Member since 2014 · 15 posts · 24 votes
12y

I would get all the infomation from your local county if they offer tax lien sales, or there are 7 states that offer online tax lien sales. They are Arizona, Colorado, Florida, Illinois, Maryland, Nebraska, and New Jersey. They can be found at http://www.realauction.com/county-tax-lien/

Go to the "training site" in the state you want and look through the bidding rules as well as everything under the "training" tab. Make sure you view the "general information" and the "certificate process".

You don't need to know everything there is to know about investing but you do need to know everything about what your investing in.

Things to watch out for:

  • Minimum deposites
  • Dates for all cut -offs for money and bids
  • The starting interest rate on the certificates
  • Types of auctions (bid down, premiums, ect)
  • Do you have the righ of ownership if when the redemption period is over
  • Redemption periods

*note* If you don't know the property you are bidding on, don't bid on it. Do your research.

Good luck,

David

19Reply
See this reply in the discussion

39 Replies

Jump to latestLatest
  • Kenisha ForbesPro Member
    Professional · Ellenwood, GA · Member since 2016 · 64 posts · 18 votes
    10y

    @Tom Yung Hi Tom, What do you mean the left over lien are mostly not worth the investment. I thought the Tax Lien holder was not responsible for the left over liens. Also how do you lose money. I thought you would get your investment back, plus 20%? 

    1Reply
  • Tom Yung
    Investor · Winnipeg, Manitoba · Member since 2013 · 303 posts · 321 votes
    10y

    @Kenisha Forbes

    There are so many investors in every sale now. The chance for any good property that did not get picked up in every sale are unusual. It does not mean it will not happen, but very rare.

    2Reply
  • Kenisha ForbesPro Member
    Professional · Ellenwood, GA · Member since 2016 · 64 posts · 18 votes
    10y
    Tom Yung Okay, I get it. Thanks.
    0Reply
  • Damon R.
    Herndon, VA · Member since 2016 · 11 posts · 3 votes
    10y

    Hello @Eric Sturdivant I'm new to the community and REI in general and look to start in Tax liens. I know I 'm extremely late to this post but I just started a similar one recently, and it seams that a lot of my questions have been answered in depth already…..(I'm also new at the forum thing so I guess I should have trolled more posts…lol ) Anyway, thanks to everyone for their input. I assume that you have already started on your journey and perhaps benefited from your colleagues advice. I invite you and others to share your thoughts, experiences and wisdom on my post as well if you like. Thanks & happy investing. Cheers

    0Reply
  • Kenisha ForbesPro Member
    Professional · Ellenwood, GA · Member since 2016 · 64 posts · 18 votes
    10y

    @Tom Yung I'm back with more questions. :-) What is your strategy when you invest in Tax Liens? Are you hoping the owner will not redeem so that you can foreclose on the property and take ownership or are you just looking for cash flow? Also, after the year or 15 months is up what happens then? Is the responsibility for the property transferred back to the owner and the county or are you as the lien holder still responsible for it?

    1Reply
  • Tom Yung
    Investor · Winnipeg, Manitoba · Member since 2013 · 303 posts · 321 votes
    10y

    @Kenisha Forbes

    Every property has a different investment strategy & potential. It depends on value, location & your budget.

    Some of the liens, you can predict whether the owner will redeem or not. You can search the history of the owner & proeperty and have a general prediction of the future outcome.

    After one year & 1day of the sale, you can file for foreclosing of the lien. The day you win the lien at tax sale, you are legally the owner without the right of occupying in GA. tax deed purchaser is not authorized to receive rents or make improvements to any structure on the property or grade any lot prior to this time.

    3Reply
  • Eli Pluzynski
    Investor · Hollywood, FL · Member since 2016 · 3 posts · 2 votes
    10y

    I am new to this forum. I just read through the thread and I am curious as to what risks needed to be taken into account besides the property being worthless. I know that city liens can be a concern as they may not be recorded at the time of sale, but what are other common pitfalls. Also what do most people use to discover other encumbrances on the property before the sale.

    Thanks

    Eli

    1Reply
  • Robert EllisBusiness Member
    Developer · Miami, FL · Member since 2014 · 3k+ posts · 1k+ votes
    8y
    Originally posted by @Jerry K.:

    @Eric Sturdivant NC is a tax deed state so you won't have tax lien sales. You can find the state statutes for the tax deed sales here:

    http://law.justia.com/codes/north-carolina/2005/chapter_105/gs_105-374.html

    In general - All tax sales are by competitive bid. There is a 10 day upset period after the sale. During that period anyone can trigger a resale by bidding the greater of 5% or $750. Sales are about 4 times a year. Counties can sometimes have additional sales for surplus properties that nobody has purchased in the past but be careful, there is probably a reason they weren't purchased.

    Information for Wake County Tax Deed auctions: http://www.wakegov.com/tax/realestate/foreclosures/pages/default.aspx

    Information for Franklin County Tax Deed auctions: http://www.co.franklin.wa.us/treasurer/foreclosure_sales.html

    It's best to start close to you. If you really want to start in Tax Liens instead of deeds, then pick a state and an area that you know well or visit often. You need to know the area so you don't buy liens on "junk" properties.

     Have you found the franklin county site to be useful?

    [email protected]786-494-6766
    Section 8 Launch52 Reviews
    WebsiteView Page
    0Reply
  • Domonick S.
    Rental Property Investor · Los Angeles, CA · Member since 2016 · 30 posts · 3 votes
    8y

    Anyone in here with recent experience with tax liens in Texas? Especially interested in the Dallas-Fort Worth, Plano, and Killeen areas.

    0Reply
  • Darron Stewart
    Investor · Hattiesburg, MS · Member since 2014 · 280 posts · 98 votes
    8y

    I have MS and AL experience, I’m interested in finding out more about TX too.

    0Reply
  • Jeff Richardson
    Lender · Irving, TX · Member since 2012 · 175 posts · 76 votes
    8y

    I believe Arnie Abrams is the expert on this subject in Texas.

    0Reply
  • Domonick S.
    Rental Property Investor · Los Angeles, CA · Member since 2016 · 30 posts · 3 votes
    8y

    Thanks @Jeff Richardson

    0Reply
  • Gary Faraon
    Rental Property Investor · Kingsland, GA · Member since 2016 · 32 posts · 7 votes
    6y

    @Tom Yung

    Greetings Tom thanks for the share. What is the next step after the barred from right of redemption? What other steps needed before walking to the house with a locksmith to change locks.

    0Reply
  • Shane Stryker
    Mount Pleasant, SC · Member since 2016 · 3 posts · 0 votes
    3y
    Quote from @Eric Sturdivant:

    Hello I starting a new passion in life in real estate and I was told that starting tax lien properties is a great way to create cash flow. I wanted to know what would be the first step for going in this direction

    Of course it depends on the State you live in. There are tax lien states that do annual auctions for the tax liens. In these states you

    may get a list up to 30 day prior to the auction day so that you can analyze the different types of properties. This list will truncate
    weekly up to the last day the owners (or friends and banks) can pay. You will get an updated list on auction day. I highly suggest going to
    one first. You can register if you want but attend one. You will notice that the auction is many times over the actual back taxes due.
    Seems to be an average of 10x. I have seen auctions go up with 85% of the value of the property BTW. There is also seats for the whales that
    include banks and large cash holders. Best properties go to a % of the value and rest are just a simple multiple of taxes due.

    After the auction, there is a grace period. Maybe 12 months. The current  owner can pay back the full amount due to the city/county/state plus
    additional fees plus a % due to the winning tax lien auction owner. IF  this is not paid in the 12 months.....yup. Ownership transfers from
    property owner to the tax lien winner.


    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free