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I am new too, but I just had to respond to this:

time IS money. You pay for LOTS of peoples time, especilly when they have something you want. TIME IS VALUABLE.

:)

dr dank, most of what you said I have read elsewhere but:

Originally posted by "drdank":

......In a lien state you are purchasing the lien only from the county. The lein is worth the amount of taxes due by the owner. The owner then has a set period to pay you back for the lein. On top of the initial amount of the taxes the past due property owner would also have to pay you a percentage. Depending upon the state you are in the percentage will be different. If the property owner doesn't pay the lein holder (you) back within the given time then the physical property goes up for aution. You may attend the auction and bid on the proprty but you do not have any priority over other bidders. When whoever wins the auction pays the county your are reinburced for your lien....... .

this doenst make any sence... what about foreclosure then? I thought that if you bought the lien then if they didnt pay it you could foreclose

Originally posted by "drdank":

..........There are also variations of bidding structure from state to state. Some states you are bidding on the actual price you will paythem for the lein, in other states you are bidding on the percent return you are getting on the lien. In the case of bidding on the percent you are starting out at the maximum percent they will give and "Bidding Down" the percent. This is where the premium comes in. For instance say a properties premium is $3000 and the percent you are bidding starts at 30% you would comete with the other bidders by decreasing your percent. Once the lowest percent has won the winner will then pay the premium and will be issued a lein worth the premium + the % of the premium..... .

this doesnt make any sence from what I have read. especilly when combined with what you said above about the property going to auction if the lien isnt paid. why would someone bid down the % if they arent going to get anything. seems like a waste of time. but if someone bid down the % to 0, and then could foreclose on the property, that would make sence.
But the state I have been looking at I dont think they do the % bid.

Originally posted by "drdank":

.........You should always check with your local government for the most accurate information concerning lien auction. You can typically find the county tax assessor's website online. That would be a good place to start looking....

thats what I have been doing, but some of what they siad doesnt make sence, or just doesnt seem complete. Thats why I am asking.

Originally posted by "drdank":

...Also do not expect to pick up a $500,000 home for $1000, there will be many other people at the auction and will drive the prices up.

I am not, I know it will probably go up (and if it doesnt whats wrong with it?). its just werid that it would even start at that.....

but anyway, this is what I really really dont understand:

**IN THIS EXAMPLE, BIDDING WILL START AT THE SALE AMOUNT--$1,000.

IF THE WINNING BID FALLS BETWEEN $1,000 AND $40,000, THE ONLY AMOUNT PAID THE DAY AFTER THE TAX SALE IS THE SALE AMOUNT--$1,000.

**IN THIS EXAMPLE, ANY BIDS IN EXCESS OF $40,000 WILL BE SUBJECT TO A BID PREMIUM—20% OF THE AMOUNT IN EXCESS OF THE $40,000 (40% OF FULL CASH VALUE AMOUNT).

BID PREMIUM EXAMPLE

**FOR THE EXAMPLE USED ABOVE, WE WILL SHOW A BID PREMIUM CALCULATION FOR A BID OF $50,000.

BID $50,000 (50% Bid Factor X $100,000 Full Cash Value)
40% OF FULL CASH VALUE $40,000

AMOUNT IN EXCESS OF
40% OF FULL CASH VALUE
HIGH BID PREMIUM $10,000
X .20

BID PREMIUM DUE $ 2,000
SALE AMOUNT $ 1,000

TOTAL AMOUNT DUE
DAY AFTER TAX SALE $ 3,000

INTEREST EARNED BY INVESTORS
18% ON SALE AMOUNTS
0% ON HIGH BID PREMIUM

I understand from this that you wouldnt want to bid more of a premium then you would get back from intrest on the sale amount unless you could get the property.

how much does foreclosure useually cost if you buy a lien and they dont redeem? is the cost mostly in the lawyer? do most lawyers require payment up front or can you pay them after?

am I right about the premium? even if you bid more you only pay 20% of it? you never have to pay the rest?

I am just terrified of hidden costs and I cant find much info on that stuff.....

I dont know for sure... most of them just say "tax sale"... I guess thats a lien auction right?

whats the diffrece betwee a sheriff sale auction and a lien auction?

Thanks! :mrgreen:

so the only catch is that you have to do more work to foreclose, or that they might redeem? wow.....

seriously? I feel like I am missing the catch somewhere.... I have found sevral like that, one that is $700 starting price for and 11 mil commercial property. another 2 mil for 600 or so... this is nuts.

I dont entirely get primium though. One site said that you bid and up to 40% of the assesment basicly doesnt count (at least thats my interpritation). so if its a 100,000 assesment and you bid 35,000 then you still only pay the sales price of $1000. that just doesnt make sence... whats the point of bidding? or does it useually just start at the 40,000 and skip 20,000, 30,000 etc? and then if you pay a % of the premium then do you have to pay the rest of the premium that you bid later? like if you bid 50,000 on the above example, it says you pay $2000 on the premium (20%), then do you have to pay the other 8,000 at some point? or is it just the $2000? I just feel like I am missing the catch and I dont want to think I only owe $2000 when I would really own another 8000 later........

ok... that makes sence....

yes, a lien auction list.

Thank you, thats what I thought, I just wanted to make sure :)

one of them has the assesment at over 5 million, the sales price is only about $300 and the HBP is a little over $2000.... does that mean that there is a property that could potentially be purchased for less then $3000 that is worth over 5 mil? (I know it will probably go up, but still....)

I found a list of liens, but I dont think I understand all of it... what exactly does HBP mean? I gussed that it is the premium since it seems to be about that much... Also does 'assesment' mean what the property is worth? and is "sale price" the amount of taxes owed? is that what they start bidding at?

Is this what you are talking about with 'paper flipping'?

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