Tax Lien Investing, Tax Sale Information, Tax Lien Fund

Tax Lien Investing in 2009

2009-02-13T22:10:00.001-08:00

Over the last few years several remarkable things have happened in order to create a sort of “perfect storm” for tax lien investing. First, one must understand how tax liens work. Property owners must pay taxes on their properties. If they owner does not pay their taxes, a lien is placed on the property for the amount of taxes owed. The jurisdiction where this property is located needs the funds from these taxes in order to pay for things like police department, schools, roads, etc. So, the city’s will sell the lien to investors. The city sets a mandated interest rate that must be paid by the property owner on top of the back taxes owed, in order to pay off the lien.

Now, why is the current market great for tax lien investing? For many reasons:

1. I am sure everyone has heard about the “subprime mortgage crisis” in the news. One of the great things about subprime loans is that they often did not include escrow accounts (accounts that automatically paid taxes and insurance). Without escrow accounts it is an added responsibility of the home owner to pay taxes each year. As more people fall behind on their mortgage payments, more people also fall behind on their taxes… If they are not making their mortgage payments, they are not paying their property taxes, which leads to more tax liens being sold.

2. Over the last few years EVERYONE was a “real estate investor.” Meaning, they refinanced their home and bought an “investment” property. Now that the values of these “investment properties” are less than what many of them paid, a lot of the owners are walking away from the properties, leaving the taxes unpaid.

3. The banks that made those compelling “subprime” loans, are now so inundated with foreclosures, that they dont have the manpower to closely monitor all of the property accounts, and are letting many of the properties taxes go unpaid, leaving many of them to go to tax sales.

4. Oh the beauty of securitzation! This amazing vehicle allowed the banks to make the risky loans, pool them together, and sell them off in peices with different ratings on different tranches of the bonds. Now that the loans are split into peices and sold off to seperate investors, banks are having a hard time proving who really owns the mortgage note. This is a fantastic opportunity for tax lien investors because when the banks get notice that one of their properties were sold at a tax lien sale, they cannot prove that they own the note and pay off the lien. Another benefit is that banks are not sure who is responsible for paying off the tax liens, and are transfering it from one department to another, leaving the liens unpaid.

As a tax lien investor for the last 5 years, I have noticed the amount of liens that are going to sales have substantially increased since mid-2006. This is leaving our citys, who already have a depleated tax base because of falling home values, without payment on an increasing number of tax liens.

Hinds seeks $10M in tax sale

2008-08-28T20:33:00.000-07:00

County notifies property owners of delinquent taxes three times by mail, and the tax information is published.
Hinds County hopes to collect up to $10 million in delinquent taxes from more than 11,000 parcels during its tax sale today.
Those who didn't pay their taxes by 5 p.m. Friday could have their property sold during the auction. The list of delinquents includes homeowners, businesses and organizations.
The tax sale list includes properties owned by Jackson Mayor Frank Melton, who owes $6,501.58 on his home at 2 Carter's Grove. The mayor said Friday he had put a check in the mail. However, the deadline to pay property taxes by check was Aug. 8. The Hinds County Tax Collector's Office now will accept only cash, money orders or cashier's checks, Hinds County Tax Collector Eddie Fair has said.
The county notifies property owners of their delinquent taxes three times by mail, and the tax sale information is published.
The majority of tax debts on the list are under $1,000, and some are under $100.
A property owner has two years from the date of the sale to redeem the property before a tax deed may be issued to the new buyer. The property owner is charged 1.5 percent monthly for overdue taxes.
Last year, Hinds had about 10,000 parcels in its tax sale, Fair said. Sometimes the same people are late paying their taxes, he said.
One of the largest 2008 tax debts belongs to the Audubon Jackson LLC, which owns an apartment complex and other property on Robinson Road in Jackson. The New York-based company owes a total of $144,997.97. The owners paid its taxes late last year, according to county records.
An organization, the Mississippi Housing Partnership, formerly the Jackson Metro Housing Partnership, has delinquent taxes on several properties in Jackson.
"We would love to pay on time, but we are a small nonprofit, and it's tough economic times. It's indicative of the economic times," said Tim Collins, executive director of the partnership.
The Housing Partnership makes loans to low- and moderate-income families. It also is involved in housing rehabilitation, property management and neighborhood development efforts.
The Housing Partnership has paid taxes on four houses it owns, but as of Friday, had not paid taxes totaling $5,451 on 10 other houses.
Fair said this year is on track to be similar to prior years and that Hinds historically has had a lengthy sale list.
He expects the county to take in $10 million, maybe more. The money won't be a windfall for the county, however, because the annual budget is set in anticipation of collecting those taxes, county Budget and Finance Director Lillie Woods said.
Deputy Chancery Clerk Greta Lovell, who is in the accounting department, said tax money collected will help the county meet its payroll and other financial obligations for September.
There will be two sales - in Jackson and in Raymond - because the county has two judicial districts.
The county gives taxpayers plenty of chances to pay their debts, Fair said.
"We're not trying to take anything," he said. "We want people to have their property."
The majority of parcels to be sold will be from Jackson, Fair said.
Those with delinquent property taxes in Hinds can pay today or anytime during the week. They will be charged interest on the late payment until it is paid.
Rankin and Madison counties will have their tax sales today as well. Rankin County Tax Collector Judy Fortenberry said the county will try to recoup $2.5 million.

Number of city, county properties in tax sale rises to 1,397

2008-08-28T20:31:00.001-07:00

The number of Warren County parcels "sold" for unpaid taxes was up this year as investors lined up to bid on them Monday.Warren County Tax Collector Pat Simrall said the list contained 1,397 parcels, some large and some small."(The list) looks like around 150 more parcels unpaid at the time we started getting ready for the paper," Simrall said, adding 985 of them were inside Vicksburg city limits.Under long-established procedures, owners of homes and businesses are provided property tax bills in December. Amounts due can be paid without penalty for more than a month, but afterward interest is added until July 1. After that, taxes are deemed delinquent and advertised twice for the one-day tax sale. Owners may still pay up until the moment taxes and penalties are paid by someone else.Investors usually bid, hoping the owners will redeem the property by paying them the taxes owed plus interest that continues to accrue at 1.5 percent per month. Although it rarely happens, a bidder may get a tax deed and title to a parcel after three years.Simrall said taxes on about 750 properties were paid between the first publication and Monday's sale, including three who had payments arrive via overnight mail just before proceedings began at 8:30 a.m.While officials couldn't pinpoint a singular economic condition for this year's increase, a few notable commercial properties were in the auction.Downtown buildings at 707, 709, 711 and 713 Clay St. that collapsed in January 2006 were among them with an Omaha, Neb.-based investment brokerage firm, Adair Asset Management LLC, paying $1,470, a bid slightly higher than its current tax liability. The building has been held by Clay Street Complex LLC, led by a Jackson law firm, but owned by Preston Reuther. Its operators have another year to outbid the amount to retain ownership.Adair also bid successfully on the former Thames Autoplex at Pemberton Square Boulevard and U.S. 61 South and two sites near downtown: the former Mississippi Hardware Co. building at 2400 Washington St. and the Vicksburg Compress warehouse at 2400 Levee St.Closed since 2004 after a federal investigation and a string of lawsuits, the dealership property is held by 61 Bypass LLC. Its principal, Joseph M. Bonelli Sr., said a partnership he led purchased it this year and it is being shopped for retail development. The group has two years to outpace the $20,560 bid.Mark Werner, owner of the former Mississippi Hardware structure, has one year to repay the company's $1,316.49 bid plus interest. The Vicksburg Compress site, currently in care of the E.A. Morgan Family Trust, of Montvale, N.J., was bid on for $47,500, more than $2,000 higher than its tax liability. One year remains before it transfers.Halls Ferry Station, a retail strip mall planned behind Walgreens purchased by Regions Bank in a foreclosure sale last November, received a bid from Green Spring Properties for $14,354.67 covering 2006 and 2007 taxes.Rubber producer Specialty Elastomer Recovery Inc., located in the same site as the former Rouse Polymerics, received a bid from Meridian-based Edgewood LLC for its 2007 tax liability of $4,852.95. The company was among a handful of bankruptcy filings in Warren County in fiscal 2007-08.Not all properties sell at the auction. If no bids are received, properties eventually become assets of the state of Mississippi.

The Madison County tax sale is under way

2008-08-28T20:28:00.001-07:00

The Madison County tax sale is under way this morning.
As of Friday, there were nearly 2,000 property parcels on the county tax collector’s auction list, totaling nearly $2 million in back taxes and related fees.The auction-style sale, at which people bid on others’ overdue taxes, started at 8 a.m. at the Justice Court building on U.S. 51 in Canton. About 150 bidders were expected to attend.All owners had until 5 p.m. Friday to pay the taxes before those who are willing to fork over the owed money could bid on them. Property owners also could show up this morning to pay.Some owe as little as $5. Others owe upwards of $50,000.The property owners have two years from today to redeem their property before deeds may be issued to the new buyers.Those who pay their taxes during the two-year period face an 18 percent interest rate, or 1.5 percent per month.All properties sold at the auction have been delinquent for 18 months.Property owners are notified of their delinquent taxes by mail three times, and the tax sale information is published in The Madison County Herald twice.

County Reports Successful Tax Sale

2008-08-28T20:26:00.000-07:00

County Reports Successful Tax SaleBy CHRIS ALLEN BAKER, Times News Editor
FOREST—Scott County received an injection of new funds Monday as buyers participated in the annual land tax sale held as required by law.The main courtroom at the Scott County Courthouse was filled with people seeking to pay taxes on land parcels with the possibility of acquiring the land if the owners fail to redeem their property.
Myra Murrell Davis, tax assessor-collector, said the turnout was a little above normal this year and the county won its share of funds in the process."I think it went really well. We officially had 98 buyers but looking in the courtroom, it seemed like we had more than 100 buyers," Davis said.The county sold the taxes on every parcel except for the 16th Section parcels that go to the state, Davis said. The county collected $372,839.10 on 1,312 parcels.Davis said that as of July 23, there was $553,933.72 left outstanding on 1,958 parcels of property in the county.The county also came out ahead on the overbid process in collecting funds from buyers who pay more than the taxes owed on a parcel.If a parcel owner redeems their taxes, a buyer receives a refund for the taxes paid, but the county gets to keep the overbid funds, Davis said.The overbid funds came to $8,587.96 for the county's coffers.During the tax sale, buyers were seen scanning the pages of delinquent tax listings published twice in The Scott County Times earlier this month. The 18-page section listed the names of property owners who had not paid taxes when the section went to press at the end of July.Davis said this is a regular process that happens every year.However, taxpayers still tend to wait until just before the publication before submitting payment."We are required by law to publish delinquent tax listings," Davis said. "The taxes are due Feb. 1 each year so the best way to keep from being listed is to pay by that date."

RI gov pays more than $12,000 in back taxes

2008-08-28T20:19:00.001-07:00

RI gov pays more than $12,000 in back taxes
August 28, 2008
PROVIDENCE, R.I. --Rhode Island Gov. Don Carcieri has paid more than $12,000 in back taxes after being issued a tax lien on a vacation home in Florida.
Carcieri and his wife, Suzanne, were issued the lien on one of two condominiums they own in Stuart, Fla., after failing to pay the last two years of property taxes on the home.
Carcieri spokeswoman Amy Kempe said the governor didn't know about the tax problem because the bills had been sent to his former address in East Greenwich.
She called it an oversight and said the governor paid the back taxes by Federal Express on Wednesday after being alerted by the media.

Housing Slump Creates Boom for Tax Lien Investors, Says BuyTaxLiens.com Owner

2008-08-27T09:49:00.000-07:00

Housing Slump Creates Boom for Tax Lien Investors, Says BuyTaxLiens.com Owner

Online sales of tax lien properties, also known as tax lien certificates, are taking off says Denny Mitchell, owner of BuyTaxLiens.com. His tax lien auction website specializes in providing a free daily list of tax lien properties resulting from government tax lien foreclosures and has been growing at a break neck pace recently thanks to the distressed housing market fueling a new nationwide boom in online tax lien investing.

West Palm Beach, FL (PRWEB) August 27, 2008 -- Denny Mitchell, a commercial real estate developer with an active interest in investing in tax lien certificates, has turned his part time hobby into a wildly successful web community for new tax lien investors. In April of 2008, Mr Mitchell launched BuyTaxLiens.com thinking it would be a simple site for he and his friends to keep tabs on new tax sales online, but to his surprise the site took on a life of its own generating a rapidly growing list of loyal subscribers. This has spurred him to add features like free daily email alerts announcing new tax lien sales and periodic free video tutorials on tax lien investing driven by questions from his email list subscribers.

Although not often discussed in mainstream media, the underground world of investing in tax liens and tax deeds (http://buytaxliens.com) is nothing new. Wealthy family trusts and large institutions have been buying large portfolios of tax certificates across state lines for many years, essentially using them as a safe harbor in volatile economic times.

In 2009, it is projected that at least 29 states will be facing combined budget shortfalls of $48 billion. This in part due to the effect of delinquent property taxes squeezing local governments for cash as the fallout continues from the housing bust according to The Center on Budget and Policy Priorities, a Washington DC think tank. What this means for real estate investors is that for the foreseeable future there will continue to be plenty of tax liens available to purchase on properties throughout the country.

For those unfamiliar with buying tax liens...essentially when a property owner doesn't pay their property taxes for a given year, the local government must raise the cash another way to keep basic municipal services running like police, fire, and schools, to name a few. In order to do this they have public tax sales to sell notes known as tax lien certificates. Each state varies on how these sales are conducted and what level of return is paid. For example, Florida tax certificates (http://buytaxliens.com/) offer returns as high as 18% per annum with 1st position lien rights even in front of the 1st mortgage of a bank, plus, the tax certificate holder inherits almost government like powers including the right to foreclose on the property in two years if not repaid. Texas offers returns on tax deeds as high as 50%! To learn more about tax lien investing sign up for free email alerts and video tutorials by visiting: http://www.buytaxliens.com

Like most industries, the web has been changing how investors find tax lien certificates online so its no surprise that there have been many paid sites popping up to serve this hot new online investment sector. By using the internet, many investors can now shop for tax deals anywhere in the country and find tax lien certificates on every property type including residential, retail, office, industrial properties and of course raw land. Shopping online also takes the pressure off by allowing more time and tools for due diligence and price comparisons.

"I encourage investors new to tax lien investing to first just watch live sales for a while and study the deals before buying anything - similar to virtual stock trading. Once they are ready to make their first purchase, begin with a very small tax certificate, say under $200-$300. After they do a few small deals successfully and get comfortable with the process, then start increasing the size of their deals along with the number of cities and property types in their portfolio. The best thing about our site is that unlike most sites, visitors can actually watch live auctions for free for as long as they like to get familiar with the process and even watch tutorials without buying anything. We have partnered with a few very well known online players to deliver a list of new tax sales to our subscribers everyday in a secure online shopping environment." Said Denny Mitchell, owner of BuyTaxLiens.com.

Considering the low cash basis required to get started and steady cash-on-cash returns, coupled with the quasi governmental powers associated with this type of lien ownership, tax liens are the new hot investment of choice.

For additional information on how to invest in tax lien properties (http://buytaxliens.com), visit http://www.buytaxliens.com and sign up for the free daily tax sale alerts and newsletter at the top of the page, or check out their videos on YouTube.

County to delay filing property tax liens

2008-08-22T09:13:00.000-07:00

County to delay filing property tax liens

Thursday, August 21, 2008

By Karamagi Rujumba, Pittsburgh Post-Gazette

The Allegheny County officials in charge of collecting unpaid real estate taxes yesterday announced a 60-day reprieve, which they hope will give delinquent taxpayers a chance to save their properties.

County Controller Mark Patrick Flaherty, Sheriff William Mullen and Treasurer John Weinstein announced they will delay the official filing of the 2007 county real estate tax liens until Oct. 1.

The officials said the approximately 40,000 liens ordinarily would have been filed by the controller in July or August. The delay will give delinquent taxpayers additional time to pay without incurring further penalties and costs.

"In these harsh economic times, measures must be taken to alleviate some of the financial pressures felt by citizens," said Mr. Flaherty. "Delaying the filing is a viable solution that should enable seniors and lower-income individuals the additional time needed to seek assistance."

Mr. Weinstein said the delayed filing should be "seen as an incentive for people to come in and talk to us about their financial situation."

"Two months is an adequate amount of time for people who are cash-strapped to do something about their predicament," he said. "They can talk to us and maybe we can figure out a payment plan or some other alternative that doesn't involve us putting their property in a sheriff's sale."

The three officials also will appoint a Taxpayer Task Force to study how the county can help delinquent taxpayers.

The panel will be responsible for examining specific measures and making recommendations that can be implemented for those affected by the nation's housing crisis.

County Chief Executive Dan Onorato's spokesman, Kevin Evanto, said, "Mr. Onorato is looking forward to working with the proposed task force on this issue."

Random Bid Tax Sale

2008-08-14T22:26:00.000-07:00

I really don't understand why a jurisdiction would choose a random bid process for selling tax liens. First, bidders cannot pick and choose which properties to buy because they may only have 1 chance to bid if your number is only called once. Second, it does not allow the purchasers a chance to do their due diligence on the properties. They would have to drive by every property being sold so that they know what they may have the chance to bid on at the tax sale. Third it does not create any additional revenue for the jurisdiction because the tax liens do not get bid up.

It really is a lose/lose bidding process. The only real benefit for the purchaser is that the can buy the lien at face value and do not have to pay a premium. But the costs far out way the benefits of random bid process at tax sales.

Norwalk CT Tax Sale

2008-07-22T09:11:00.000-07:00

Bidders sniff out bargains at city tax sale

By Alexandra Fenwick
Staff Writer
Stamford Advocate

Article Launched:07/22/2008 01:00:00 AM EDT

NORWALK - Nearly 200 people turned out yesterday for the city's third tax sale in five years, including 57 who registered to bid on eight tax-delinquent properties.

Others were there out of curiosity.

"We came for the show," Norwalk resident George Dombakly said from his red velvet upholstered seat at Norwalk Concert Hall.

The city sought to recoup $4.3 million in outstanding taxes in the annual tax sale.

Properties owing more than $12,000 in taxes, or that had unpaid taxes for three or more years, were auctioned off yesterday, with minimum bids equal to the total delinquent tax.

Two hundred properties were originally slated for the auction block, but by the time the sale opened yesterday, city tax collector Lisa Biagiarelli's office had collected $4.1 million in unpaid taxes. Four were paid off yesterday morning.

Not including the $267,776 in unpaid taxes recouped in yesterday's sale, the city collected $1.25 million in overbids at yesterday's auction.

"We anticipated quite a turnout, simply because there are a lot of residential properties, and that's what tends to pique interest - particularly from people who are not investors," said assistant tax collector Al Palumbo said.

The real estate drama featured some big winners and losers.

Scott Merrell, a former independent mayoral candidate who is vying to be on the ballot for U.S. Rep. Christopher Shays' 4th District seat, may have lost his exclusive Wilson Point home in the sale.

Merrell, who is disputing the home's assessment of $3,322,500, refused to pay his nearly $110,000 tax bill in protest.

Carmelo Tomas of Wilton beat out 20 other registered bidders on the property with a bid of $725,000. He declined to comment.

With a second place bid of $700,000, Pradeep Singh of Norwalk was disappointed to lose out on the property. He hopes for another chance if Tomas can't pay by Friday's deadline.

"It was definitely a rush bidding that much money," Singh said. "I froze up. I was expecting someone else to come in and bid and it happened so quickly, as soon as she dropped the mallet I thought, 'I messed up.' "

Fairfield Realtor Guy Osa, a real estate investor and Realtor with Fairfield-based CT Real Estate Solutions, said Tomas got a great deal.

"I thought that house was going to go for at least $1 million, Osa said. But a lot of people are being conservative, because if the gentleman absolves the property, they don't want $1 million tied up in the bank."

Auction winners did not automatically walk away with the keys to the castle. Merrell can still redeem his property but would have to pay the interest on the winner's bid.

Property owners or lien holders have six months to redeem the property by paying overdue taxes, plus 1.5 percent per month on the total sale price - which goes to the bidder.

Overbids are returned to the bidder if the property is redeemed.

The auction winner otherwise receives the deed for the bid price and the overbid funds are turned over to state Superior Court, where the former property owner can file for the money.

Even if Merrell does pay up and reclaims his home, if he waits the entire six months, the winning bidder is due to make a tidy sum of $62,250.

"The strategy is go in and put the investment on a house because you're going to make a lot of interest. It's better than the stock market and better than the bank," Osa said.

Norwalk resident Michael Wang, who won a home at 90 Dry Hill Road for $170,000 with a minimum bid of $21,041, was interested in Merrell's property but sat out the bidding war.

"I'm very intrigued by it, by him and the situation surrounding the property, but I'm apprehensive about bidding on it," Wang said.

Merrell did not return a call for comment.

Two properties went to a single bidder who came in second on two other auctions. Richard Giordano, bidding on behalf of 95 New Canaan Ave. LLC, won 45 Soundview Ave. with $76,000 on a minimum bid of $30,793, and won 9 Eastwood Road for $243,000 on a minimum bid of $28,272.

Fairfield Tax Collector Stanley Gorzelany, who has conducted lien sales in his town, was there to see a tax sale, and said the turnout looked impressive.

"There's so much in the news about buying foreclosed properties, I think that raises the interest of something like this," Gorzelany said.

Some curious spectators agreed.

"Tax sales have been going on for 20 years. Now everybody's hitting the skids and is looking for a quick deal," Seymour resident Mike McDonough said.

Norwalk resident Bridget Elliott, who researched land records but did not bid yesterday, said she wouldn't be able to afford a home at market prices.

"This is the only way I would purchase a home in Norwalk, in foreclosure or a tax sale, because housing is so expensive here," Elliott said.

Rudy Gamboa, another Norwalk resident, has been following the progress of the tax sale. He alerted a relative's friend when he found his property listed on the boards, and the owner paid it off.

"I feel bad for the people. It's real tough if you put yourself in their shoes, they're struggling to make payments. I own my property, it's tough," Gamboa said.

Tax delinquencies up across D.C. area

2008-07-11T09:02:00.000-07:00

Tax delinquencies up across D.C. area

Washington Business Journal - by Joe Coombs Senior Staff Reporter

With their tax bases already stressed by the housing market’s woes and the economic downturn, some local governments are also taking a revenue hit from taxpayers who are paying late — or not at all.

Personal property and real estate delinquencies have risen slightly in Loudoun, Prince William and Prince George’s counties. Collections have fallen because of economic conditions or a lack of staffing at a time when all local governments are losing millions of dollars in real estate-related tax revenue.

In recent months, many Prince William collectors have shifted their work from personal property to real estate cases due to the growing amount of foreclosures.

“Because of the foreclosure problem, we have a lot of people who haven’t been mowing their lawns,” said Corey Stewart, chairman of the Board of Supervisors. “When that happens, the county cuts the lawn, and then we need to collect the fee for that work. It’s a staffing issue.”

Prince William has about $13 million due in delinquent real estate taxes, up more than $1.1 million from a year ago, said Finance Director Chris Martino. The county is owed $10 million in personal property taxes, up about $400,000 from 2007.

To deal with the shift of some collectors to real estate cases, Prince William officials have agreed to hire private contractors to help with personal property collections.

Private contractors, used in the past by several local governments, will track down out-of-state delinquent taxpayers for Prince William.

“Delinquencies have crept up a bit in terms of the dollar amount,” Martino said, “but if you go back historically, our delinquency rate back in 1998 was over 10 percent. It’s now closer to 2 percent.”

Loudoun has typically maintained a 98 percent collection rate for personal property taxes and 99 percent for real estate taxes, said Treasurer Roger Zurn. But in the past six months, the personal property collection rate is down to 87 percent, and real estate has fallen slightly below its usual pace.

Loudoun has about $5 million outstanding in personal property taxes and about $3.5 million in delinquent real estate taxes, Zurn said.

“It’s due to the economy, ” he said. “We’re actually getting a lot more phone calls than [during the last downturn] in the early 1990s. People are calling us these days with a lot more distress in their voices, wondering how they’re going to pay.”

Governments have several tools for collecting overdue taxes. The process usually starts with written notices to the delinquent taxpayers, often followed by phone calls, visits to the property owners’ homes or businesses and formal action such as placing tax liens and seizing the property.

If all else fails, private collectors can be brought in to pick up the slack. Private collectors typically don’t charge governments for their services. They take 20 percent of the outstanding tax and charge that to the delinquent taxpayers.

In Maryland, delinquent taxes are automatically placed in liens and then sold at auctions. Investors buy the liens, charge fees to the delinquent taxpayers and collect the back taxes on behalf of local governments.

The lien auctions are held every June, and there weren’t any major fluctuations in the amount of liens this year in Montgomery County, said Jennifer Barrett, the county’s finance director.

Prince George’s had a slight rise in delinquent real estate taxes but not a dramatic jump, said spokesman Jim Keary, who added, “Fiscal 2009 may be a different story.”

In many cases, it comes down to resources and vigilance in collection activity. Take Arlington County, which has a miniscule delinquency rate of 0.6 percent for all categories of taxes, said the county’s treasurer, Frank O’Leary. The rate was more than 9 percent when he started 25 years ago. What followed was his “reign of terror,” he said.

“We’ve got the lowest delinquency rate in Virginia, and it’s because we are not nice people,” he said. “We’ll take your tags off your car, put liens on your bank account or put liens on your business, and sometimes they all happen simultaneously.”

How to Choose a Good Tax Lien Fund

2008-07-10T16:17:00.000-07:00

What makes a tax lien fund a good choice for one investor may make the same tax lien fund a poor choice for another, but just as a tax lien investor should research the potential properties prior to purchase, so too a potential client should research tax lien funds prior to giving them control over their investments. Here are just a few things to consider when choosing your tax lien fund.

Minimum and Maximum Investments. Whereas there are no restrictions on your budget when investing in tax liens on your own, tax lien funds set a minimum investment amount in order to make their efforts on your part worthwhile. Occasionally you may find funds with a minimum investment of as little as $5-10,000, but more frequently you should expect to invest at least $25,000 and up. Also, if you are a power investor be aware that there are limits on how much you can invest as well. The better tax lien funds allow individual clients to invest into the millions.

Other Requirements. Some tax lien funds have client requirements that go beyond your investment capital. The most common qualifiers are age and income related. For example, tax lien funds usually require their clients to be legal adults. Additionally, they may request that their clients have a provable income of several times the minimum investment or comparable liquid assets. In some cases, tax lien funds may even do a credit and background check to verify the legitimacy of the investor.

Experience. Look for tax lien funds that present themselves and their key staff as an open book. If you wanted your money invested by an amateur, you could do it yourself and save the commission. A good tax lien fund will be fronted by staff with extensive experience in investing and real estate. They should also be able to provide solid statistics on past performance and annual revenue. You should be just as discerning when selecting your tax lien fund as they are when selecting their client investors.

Coverage. If you have a real interest in being part of the process, then consider tax lien funds that cover your area so that you can see the purchases they are making for you. By playing a more active role in the investment process, you will have a better understanding of how good tax lien investments are made should you choose to invest on your own in the future. By choosing a fund that covers several counties, you can also rest assured that they are pursuing as many avenues as possible to secure the best investments for their clients.

Staff. As mentioned earlier, the qualifications of the staff should be key in determining which tax lien fund is right for anyone. Only professionals should be entrusted with your money and the future of your investments. Also, be wary of tax lien funds who are difficult to communicate with. You deserve an agency that appreciates your business, takes your investment seriously, and will always supply you with quick and complete answers.

Average Rate of Return. This is an important number for you as the investor. Be aware that most tax lien funds pay on an annual basis, issuing yearly reports along with payments to all of their clients at the same predetermined time. Most funds focus on long-term investing, which means a single investment may yield returns for several years until the lien is redeemed or the property is foreclosed upon and sold. For short-term investments, you should expect to receive no less than 80% of the proceeds from interest collected and no less than 75% of the profits from the sale of a foreclosed property. For long-term tax lien investments, look for a tax lien fund that promises annual returns above 20% a year.

How Tax Lien Funds Work

2008-07-10T16:16:00.000-07:00

How Tax Lien Funds Work

Essentially a tax lien fund or agency does all of the above investing work for their clients in return for a small fee or commission. If after reading the above information you are interested in the investment opportunities offered by tax liens but are unsure of your own ability to make the best investment choices, then tax lien funds are an ideal alternative.

These professional investment management agencies have made tax lien investing not only their specialty but their career as well which means that you as their client can rest assured that they are doing everything in their power to make the best tax lien investments. Tax lien funds take research above and beyond by utilizing a trained team which covers every county thoroughly and individually, making note of the best investments for each client’s budget.

The agency then sends approved bidders to purchase each pre-selected property. These experienced professionals have the resources necessary to bid on any and every deal, and yet they stop at a predetermined point to ensure that each investment they do make will yield only the highest returns for its clients. The agencies also utilize opportunities like the inventory liens mentioned earlier.

Tax lien funds take on all of the responsibilities associated with both tax lien purchases and tax deed purchases (when applicable). They will handle all necessary relations with the county offices, complete all mandatory paperwork, and even post the required legal notices. When a property owner redeems their title, the payment goes directly to the tax lien fund and then to you, their client.

When the redemption period expires, your tax lien fund will complete the foreclosure process for you to ensure that all legal procedure is followed perfectly and that the title is received free and clear. The fund will then take the next obvious step and place your property on the market, maintaining and managing it in the meantime and handling all buyer inquiries as well as acting as a liaison between the property owner and real estate agent (if necessary).

Most tax lien funds operate off a percentage of the profits earned, tying their performance directly to their clients’ and their own gains and giving them a greater interest in the success of each investment. In other words, tax lien funds represent an excellent opportunity for amateur investors to use the experience, resources, and expertise of investing professionals to earn a maximum profit on their tax lien purchases without committing any time or money beyond their initial investment.

Why Tax Liens Are Profitable

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efore we get into the specifics of tax lien investing, it is important for you to understand how and why this process works. Many people automatically assume that an investment opportunity that promotes itself as being quick and easy is a scam. Tax liens however are a product of the federal government and are not only 100% legal, but the interests of the investors are protected by each state they purchase from.

When you invest in tax liens, the process by which you profit is very similar to the process used by banks when lending money. It comes down to simple interest. You purchase a tax lien by paying the back taxes and all other applicable fees currently owed by the property owner. This gives the county the money they need to continue with operations while offering regular citizens the opportunity to turn a quick profit and giving home owners an extended opportunity to pay their debts prior to foreclosure. It’s a win-win situation.

The interest you can charge varies from state to state and may be as little as 10% or as much as 50% . The best part is that you do not even have to impose the interest yourself. Once you purchase the lien, the county will raise the interest to the agreed amount and will collect the final sum for you. You will never have to communicate with the property owner.

In the event that the property owner does not pay all back taxes plus interest due within the previously determined redemption period, your lien gives you first right for claiming the property via foreclosure. As the first lien holder, that means that your entitlement to the property comes ahead of all other liens (including mortgage lenders and other debt collection services). In most states, when you foreclose on a tax lien you are given the property title free and clear.

In a worst case scenario, the property owner whose lien you have purchased will pay within a couple months, meaning a small return on your profits because of the low amount of interest accrued. Usually however the property owners take full advantage of the redemption period and do not pay until foreclosure is nearly pending. In a best case situation, the property owner will not pay at all, and you can foreclose on the property for little more than the cost of one year of its real estate taxes.

Tax Lien Terminology

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It is best to familiarize yourself with these concepts now to ensure that you have a firm grasp of their meanings and implications before you begin using them in the tax lien investing process. A few additional terms follow.

Auction. If you have never been to an auction, there are few other things that can prepare you for the experience. The lien and deed auctions frequently mentioned in this book are live and open to the public. Each county typically holds only one a year and you must register in advance to bid. Because tax lien auctions are an integral part of investing successfully, we will take a more in-depth look at them later in the book.

Capital. This is what you can safely invest. Tax lien investing offers an opportunity for everyone, with some liens selling for as little as $400 and others for tens of thousands of dollars. Be aware of what you can safely invest in advance, and plan your buying strategy around that.

Debt. The debt mentioned throughout this book is specifically tax-related debt. That is, it is the money each property owner owes for back taxes, interest, and other related fees.

Foreclose. A lien gives a second party a conditional right to a property. If those conditions are not met, the lien holder is entitled to foreclose on that property. To foreclose means that the lien gives them the right to claim the property as their own in final settlement of the original debt. While it is rare that you will get to the stage of foreclosing on your tax liens, it does happen occasionally (to your advantage), and this is also covered in more detail later in the book.

Interest. Interest is a sum or percentage charged against money borrowed or owed. In this case it is charged against taxes owed. While most county governments charge a very low interest rate on back taxes, once the lien has been purchased by an investor they are free to raise the interest rate. This is how you will make your profit.

Investor. The dictionary definition of this word is “to use capital or money for the purchase of something with the intention of gaining a profitable return through interest, income, or appreciated value.” Put simply, in this book “investor” means YOU! This book is all about helping you to increase your capital by turning your investments into profitable returns.

Redemption Period. This is the amount of time the property owner has to pay their total debt before a lien holder can foreclose. The redemption period varies from one state to the next and may be as little as six months in some states and as much as three years in others, though the average is approximately one year. Some tax lien investors prefer shorter redemption periods because it gives them a greater chance of acquiring the property, while other investors prefer a longer redemption period because it allows them to accrue more interest.

Tax Deed. While most states sell tax liens, some sell tax deeds. A tax deed is the actual right to ownership of the property and can be purchased at public auction in the same way that tax liens are.

When and How Are Tax Liens Applied?

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When property owners are late to pay their real estate taxes, the government will claim a lien on the affiliated property to encourage the property owner to pay their debt. To ensure that the government gets the funds they need for regular operations (schools, road repairs, and other public services), they then offer these liens to investors at public auction. While the government may claim a lien after a property owner is only a few months delinquent in paying taxes, these liens are usually not auctioned until the property owner is at least a year or more delinquent on their back taxes.

Investors purchase the liens for the cost of the back taxes owed and occasionally for more. Once the lien has been transferred from the government to the investor, the interest rate applied to that debt goes up. The property owner will have a set period of time to pay the new total (taxes, interest, and other related fees). If the property owner fails to pay within the arranged time frame, the lien now gives the investor the right to foreclose on the property.

In this way, the purchase of a tax lien may in some cases lead to the acquisition of a tax deed.

What You Should Know about Investing in Tax Liens

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What Is a Tax Lien?

If you are a home owner, then you may have a one-sided understanding of this term. The tax portion of the term typically refers to unpaid property taxes. The dictionary definition of lien is:

“The legal claim of one person upon the property of another person to secure the payment of a debt or the satisfaction of an obligation.”

By putting these two concepts together, we can now see that a tax lien uses an individual’s property as collateral to ensure the settlement of a tax-related debt owed to another person or entity. While initially that debt is owed to the government that imposes the taxes, after a set amount of time these government agencies will auction unpaid debts to recoup their own expenses more quickly, opening an opportunity for savvy investors.

Fitch Rates NYCTL $52,264,000 Tax Lien Collateralized Bonds, Series 2008-A

2008-06-30T09:28:00.001-07:00

Fitch Rates NYCTL $52,264,000 Tax Lien Collateralized Bonds, Series 2008-A

Fitch Rates NYCTL $52,264,000 Tax Lien Collateralized Bonds, Series 2008-ANEW YORKNY-FITCH-RATINGS/NYCTL

NEW YORK--(BUSINESS WIRE)--

NYCTL 2008-A Trust tax lien collateralized bonds, series 2008-A, which closed June 26, 2008, are rated by Fitch Ratings as follows:

--$52,264,000 class A are rated 'AAA' (144A).

The bonds are secured by liens on real property resulting from unpaid real property taxes, assessments, sewer rents, sewer surcharges, water rents and other charges (Tax Liens). The tax lien were imposed by The City of New York on properties located in New York City.

The 'AAA' rating on the class A bonds reflects the 33.65% credit enhancement provided by overcollateralization (OC). Additional support for the bonds is available from an interest reserve fund initially equal to three months interest on the original principal amount of the bonds until such amount is equal to six months interest on the outstanding bonds, and thereafter remains equal to six months interest payable on the bonds. The interest reserve fund is designed to help protect the bondholders from potential fluctuations in cash flow from the underlying collateral that could impair their receipt of timely interest. A $4,000,000 working capital reserve fund is also in place to cover lien administration expenses and pay the servicers their base fee. In the event that monies in either the interest reserve fund or the working capital reserve fund are insufficient to meet their required needs, The Bank of New York, as indenture trustee, will advance interest payments (by an amount not to exceed 12.50% of the current outstanding lien balance) and lien administration expenses, provided that the advances are deemed as recoverable by The Bank of New York.

Fitch's ratings on the bonds reflect the quality and nature of the underlying collateral, the credit enhancement provided by OC, the servicing experience and capabilities of Xspand and Mooring Tax Asset Group, LLC and the transaction's financial and legal structures.

The final collateral pool, which will secure the bonds, consists of 4,358 unpaid tax liens, with an initial tax lien principal balance of $78,771,234. The liens sold to the trust have a weighted average lien to property value ratio of 15.03% and a weighted average age of 55.36 months. The boroughs of Brooklyn, Queens, and the Bronx have the largest concentration of unpaid tax liens in the collateral pool with 40.13%, 22.85%, and 17.69% respectively. All unpaid tax liens in the collateral pool are scheduled to accrue interest at a rate of 18% per annum compounded daily.

Stated maturity for the bonds is Jan. 10, 2022. For federal income tax purposes, the bonds will be treated as indebtedness and not as an ownership interest in the collateral or an equity interest in the issuer or in a separate association taxable as a corporation. The bonds will pay principal on a pro-rata basis since tax liens do not qualify as real estate mortgage investment conduit (REMIC) eligible collateral. Principal and interest will be paid on the 10th day of January, April, July and October (assuming each day is a business day) beginning October 2008.

Tax Lien Investing – Learn The Tricks!

2008-06-24T10:11:00.000-07:00

Tax Lien Investing – Learn The Tricks!

You can convert yourself into a great investor in tax liens if you have an internet connection at the comfort of your own house. You can find articles in bulk on the internet and you can access them through just one mouse click. Most of your competitors in the auction would not have bothered to research them for a successful investment and mostly trust on their instinct or luck. This is a good competitive edge for you.

The tax lien properties act as a burden on the county government which is quite draining on the local economy. Governments are always in need of money as they have to do a lot of things like constructing buildings and roads, hiring workers and teachers and a lot of other things with this tax money. In case the property owner is unable to pay then they have to rely on the investors just like you, in order to fill up their financial gap.

It’s not necessary to make a physical trip to the county office to get information on tax liens, as you can also send them a request for detailed information via fax or by visiting their website on the internet. You can find all the information about inventory properties, current tax, and lots of other things.

For example you have seen a property and you want to invest in it but there are many factors that you need to learn that could make your investment complicated. At the auction hall you will have to take decision with in few seconds and no time for deep analysis. But if you do research up front with the help of internet then you can find a lot of solutions for any problems or at least it could save you from making risky investments.

2008-06-23T10:04:00.000-07:00

A Maryland tax lien agent has agreed to plead guilty and pay a $750,000
criminal fine for conspiring to rig bids at tax lien auctions in several
Maryland counties, the Department of Justice announced today.  Under the
plea agreement, which is subject to court approval, Steven L. Berman also
will serve a period of incarceration, if so ordered by the court, and
cooperate with the Department's ongoing investigation.  Berman was an
agent for various Cockeysville, Md. limited liability corporations.

According to the one-count felony charge filed today in the U.S. District
Court in Baltimore, Berman participated in a conspiracy to rig bids submitted
to a municipality and counties in the state of Maryland for tax liens. 
The charges state that from at least Spring 2004 through August 2007, Berman
participated in a conspiracy to rig bids at multiple auctions in Maryland for
the sale of tax liens.  The conspirators discussed and agreed among themselves
which of them would bid on specific tax liens or groups of tax liens, and agreed
upon specific bid prices in order to improve their financial return on the tax
liens obtained during the auctions.

"The Division is committed to ensuring that all aspects of real estate transactions,
 including tax lien auctions, remain competitive and free from collusion," said 
Thomas O. Barnett, Assistant Attorney General in charge of the Department's Antitrust
 Division.  "We will continue to apprehend and bring to justice those who rig bids,
 thereby denying Americans of a competitive bidding process."

When owners of real property in Maryland fail to pay property taxes, the county or
 city in which the property is located may attach a lien.  If, after a waiting
period, the taxes remain unpaid, the lien is sold at auction.  The winner of
 the auction has the right to collect the amount of the lien from the delinquent
taxpayer, along with interest at a rate set by statute, and eventually to foreclose
on the property if the lien remains unpaid.  Counties and municipalities in Maryland
typically hold tax lien auctions annually.  Tax lien auctions allegedly affected by
the conspiracy include, during certain years, those in Baltimore City as well as
those in the following counties-Anne Arundel, Baltimore, Howard, Montgomery, and
Prince George's.  

Berman is charged with carrying out the bid-rigging conspiracy with co-conspirators
by:

Attending meetings and engaging in discussions regarding bids for tax liens being
auctioned by a municipality and counties within the District of Maryland;

Agreeing during those meetings and discussions not to compete at certain tax lien
auctions by determining which tax liens, properties, or groups of properties each
group would bid or refrain from bidding on, and by fixing prices that would be bid;

â€¢ Discussing and exchanging prices for certain tax lien auctions so as not to
undercut one another's prices;

â€¢ Submitting bids in accordance with the agreements reached; and

â€¢ Purchasing tax liens pursuant to those agreements at collusive and non-
competitive prices.

Berman is charged with one count of bid rigging in violation of the Sherman Act,
a violation of which carries a maximum sentence of 10 years of imprisonment and a
fine of $1 million for individuals.  Under the statute, the maximum fine may be
increased to twice the gain derived from the crime or twice the loss suffered by
the victims of the crime, if either of those amounts is greater than the statutory
maximum fine

2008-06-23T09:59:00.000-07:00

As the number of foreclosures continues to climb nationwide, tax defaults have skyrocketed to an all-time historical high. As people who are cannot afford their mortgage payments also are not paying the taxes on their properties. In most parts of the country, if a homeowner fails to pay property taxes, the county issues a tax lien on the property. To get the revenue a local county government needs for operations, it will sell the tax lien at auction.

By buying a tax lien, the investor will get a fixed rate of return as high as 36 percent annually when the owner pays off the taxes or the investor can foreclose on the property and will receive Title to the property up to 90 percent off market prices if the taxpayer doesn't pay the taxes.

"Tax lien certificates are one of the most lucrative areas in real estate and also one of the most hidden. They have been a secret tightly held by real estate agents, bankers, and attorneys for many years," said Josef Katz Vice President of Marketing at Trump University. "Not only will investing in tax liens build a nest egg with average returns of 18 to 25 percent interest, but investors could literally end up owning real estate for 'pennies on the dollar'."

Benefits of investing in tax liens include:

-- Superior returns - The rate of return on a tax lien can be much higher than other investments including stocks and bonds.

-- Low risk - Tax liens are much safer than other forms of investments and are guaranteed by the local government and the property value.

-- Potential for windfall profits - Although the majority of tax liens are redeemed before a property is foreclosed, if the lien is not paid off with interest and fees, the investor can own the property below market by just paying off the taxes due.

"We know that most new investors are more successful if they have a partner to work with so to support your success," said Katz of Trump University.

What are Tax liens?

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What are Tax liens?

A tax lien refers to the lien imposed by the government on the property for securing payment of taxes. This means that the property owner is liable to make the payment imposed on the property. Such liens are imposed because the owner has missed payments towards income taxes. The tax liens that are obliged will be higher than the normal tax payments. This is a penalty for the owner for failure of paying the legal taxes that are liable to be paid.

Tax liens are not personal taxes that are associated to a person, rather, these taxes are attributed to property and if the ownership of the property is transferred, then the lines are also transferred to the new owner. Even if the previous owner was actually charged for tax liens, the present owner is obliged to pay it. Payment of tax liens is generally made as hot cash by the property owner. If the property is under mortgage, then the mortgager has to pay the tax and collect the money from the owner by means of additional monthly mortgage payments. Even if the owner does not escrow the payment, the mortgager will have to pay the liens as per the order.

Tax liens will not be issued immediately after missing the tax payment. Notices will be given to the owner and if the owner still hesitates to make the payment, the government will take necessary steps to deal with the issue. When the designated period has passed by, then the government may either seize the property or offer tax liens to other investors. Seized property is then sold by the States and the owner will be denied of his rights on the property. Tax liens investment is now becoming a new business in the real estate field where the investor will pay the lien and get a title to the property with the certificate. The tax lien certificate gives the right for the investor to initiate the sale of property after a specific period of time; this means that the investor can take advantage of the property by paying the tax liens alone.

Advantages of tax lien investing

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Advantages of tax lien investing

Tax lien investing is a lucrative investment strategy that can bring in more profits for you. There is no chance of losing the investment if you have taken the right steps. Tax liens are imposed on a property owner because of missed tax payments. The government will issue notices and then issue tax liens. The property owner is obliged to pay the tax lien and at the same time, the states will be selling the tax lien certificate. Tax lien investing is nothing but buying these certificates.

When you obtain a tax lien certificate, you will be titled for the property. The property owner will pay the tax liens to you and not to the government. Also, you will be encouraged to collect interest from the property owner and the interest rate is fixed at the time of selling the certificate. You have to pay for the certificate, which is generally auctioned and you will be getting returns on your investment. Apart from the money you have invested, you will be getting interests from the owner.

Tax lien investing will become highly profitable if the owner is not able to pay the tax liens within the specified period of time. Now since you are titled for the property, you gain ownership for the property after completing the foreclosure formalities. You become the owner of the property just with the money you have invested in buying tax lien certificate. After that, you can either use the property or sell it for profits. Tax lien investing provides opportunity for owning a property at a fraction of the actual price of the property.

Tax lien investing is advantageous provided you know what you are doing. Before investing in tax lien certificates, you have to inspect the property and the financial status of the owner. If the property is heavily damaged requiring more money to be spent on it, then your investment will become useless. When the owner is declared bankrupt with outstanding tax lien, then the court will outweigh your tax lien certificate and take the property. With proper inspection, tax lien investing is a highly profitable investment that will not lead to any losses.

Tax deeds

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Tax deeds

In the case of tax lien, when the property owner does not pay the imposed lien, the tax lien certificate will be auctioned by the state transferring tax control to the investor. Rather with tax deeds, the ownership of the entire property is transferred to the investor. Property taxes will be a fraction of the actual worth of the property and hence investors can profit more with the tax deeds system. Once you pay the taxes, you will become the new owner of the property and the previous owner has no legal rights.

Some states in USA follow tax lien system while some others follow tax deeds systems. Tax deeds come into the picture during the foreclosure stage. More time will be given for the property owner to pay the taxes and if he fails, foreclosure will be called for. The investor is then allowed to take full rights of the property after the foreclosure process. Tax deeds are also sold at auctions and the highest bidder is provided with the right of the property.

Apart from the tax amount, the investor should pay interest charges, fees and other court costs to complete the foreclosure process. Any pending taxes with the property including the mortgages are to be paid by the new owner. All auctions for tax deeds sales should be announced to the public and eligible people can participate in the auction. You can find the announcement in the local newspaper or in online websites and register to participate.

Since with tax deeds sales you can acquire a property at much lower prices, you will have high competition. To determine your bid amount, you have to inspect the property. You will lose if you don’t do proper research. There is no point in buying a property that is not worthy. Unlike tax liens, once you have completed tax deeds sales, you get full ownership of the property. Most of the states will have fewer formalities to be completed and you should know what is applicable in your country. In all, tax deeds are a great investment strategy that can bring you great benefits if you have the right knowledge.

Steps for Investing In Tax Lien Part 1

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Steps for Investing In Tax Lien

If you are interested in investing in tax liens or Tax deeds then you need to learn first how it works. It is quite a reliable and safe way to invest but one could find problems in searching for the opportunities. If the owner of the property is unable to pay the taxes then you get the chance to earn the interest over it or you get chance to own the property. Whatever the situation is you get the best side of the deal but you must be aware that there could be many hurdles in your way that you need to look out.

Following are the steps involved in making investment in tax lien.

Have skills
If you want to become a good investor in tax lien certificates then you need to have some specific skills that are quite difficult to acquire. Before taking the property you need to completely analyze the property. When the owners can’t pay the tax then you will get the chance pay for the owner and take interest for your investment.

Invest Successfully
Regardless of the available opportunities, once you have searched the profitable property then you will be well awarded as well. Personally I also own some property by paying almost 10% less than its actual value just by searching over the internet. You must check the complete background of the property in which you want to invest in order to avoid any problems in future.

Avoid Obstacles
There could be a lot of obstacles in your way to investment as everything can’t be achieved being adorned in a plate. One of such hurdles that you could encounter is that it will be a problem for you if the judge would sell the property among prior investors in order to split the earnings. The judge has the attorney to do this and in this way you would not be able to get a good compensation for your invested amount. Although this problem occurs very rare still you need to consult your lawyer and try to know more about it.

Over The Counter Tax Lien Investing!

2008-06-22T21:51:00.001-07:00

Over The Counter Tax Lien Investing!

The government of United States of America offered a unique investment opportunity for the citizens in terms of tax deeds. Before a year postal mails are only the option for purchases and as technology has been evolved, now the internet is another option used for tax deeds. There are no restrictions and obligations applied by the US government, any one around the world who has social security number or NTN can buy US tax deeds. NTN (National Tax Number) can easily be obtained. This number is used in W9 forms, which is compulsory for all independent contractors.
The profit margin in the sale of tax deeds is astronomical; however, tax deeds required more responsibility and attention as compared to tax lien sales. This becomes more important if you are living out side the country and can not visit the specific site. Offsite investing should not however be treated as blind investing. Now this is the right time to discover your shares in America. Choose the region you want to bid in and ask them to provide information. Ask them for an email or fax with completely history and inventories for your consideration but before making any deal ensures that there is no tax liens active on the site after your deal confirmation. Although the business of real estate is little bit tricky but fighting in a legal battle definitely frustrating for any one. This is the last and most important thing that you can manage from abroad.
U.S. Tax Lien Sales
If the option of tax deed sales is not possible for you then think about tax lien sales. Tax liens seldom end in the acquirement of real estate. The ration is 1 out of 250. Normally the owner redeems the equity and gives you a check of equal amount with decided interest. Tax Lien sales definitely a great way to introduced you in real estate business and skills learning.
Should be one day you will get a chance to travel to America, whether for business or vacations, consider the live auctions and check out their schedules. This will defiantly gives you a deep knowledge of US tax deeds and liens sales. You will get some skills that you can’t mastered while reading at your computer screen. You can meet with different investors and can make a coalition for investment.
Explore all the options and opportunities of US Tax deeds and Liens auctions and start your journey of success and wealth today!
Happy Investment

Investing in tax liens through IRA P.2

2008-06-22T21:50:00.003-07:00

Investing in tax liens through IRA

Buying tax lien certificate is a great investment plan that can bring you benefits. Investing in tax liens through IRA can bring you more advantages as you can use the tax free account for investing in the tax lien certificate. The investments made using these accounts are not legible for tax and you can get tax exemption for all the gains you make. Hence this has become a popular form of investing where you can pay cash for the certificate using IRA account.

The tax lien certificates are sold in auctions and you have to pay instant cash for acquiring the certificates. You can start Investing in tax liens through IRA with the self directed IRA account. With self directed IRA account, you need not pay tax for the compound interest you are getting. When you buy tax lien certificate, the property owner will start paying tax plus interest to your account and your taxes are deferred because of IRA features.

Investing in tax liens through IRA seems very good for use but still you have to plan well if you want to take advantage. When you buy the tax lien certificate, you have to pay instant cash. Self directed IRA is managed with custodian and hence withdrawal process takes longer time. Though investment using self directed IRA is supported, a number of procedures have to be completed before you actually withdraw cash.

Investors who plan for investing in tax liens through IRA may opt to use escrow account for making the payment. The escrow account should be funded by the custodian of self directed IRA and this transaction has to be initiated several weeks ahead of the auction. This is not always possible since auctions are not announced well in advance.

There is another way of investing in tax liens through IRA using self directed IRA with checkbook control. When you have the checkbook in your hands, you can immediately make the payment and secure the tax lien certificate that you have won. This will give you the tax free advantages, but before making an investment, you have to do a deep research about the property.

Investing in tax liens through IRA P.2

2008-06-22T21:50:00.001-07:00

Investing in Tax Liens Through IRA

2008-06-22T21:48:00.002-07:00

Many people are unaware of this thing that they can invest their money in tax lien certificates or tax deeds taken from self-directed IRA account. By an interview conducted from account specialists of self-directed IRA organizations we came to know about the reality that any one can invest his in tax lien certificates and tax deeds without paying any kind of tax with their IRA account.

After investing the money in tax lien or tax deeds, the money will start growing without any kind of tax unless and until after your retirement you withdraw it. But if you withdraw your money before your retirement then you need to pay tax. Thus, if someone wants to save his future after his retirement then he must think about investing in tax deeds or tax lien and must not withdraw it before his retirement.

You will find a lot of brokerages who will claim that they are having a self-directed IRA account but reality is something different. If you invest through them then in fact you are investing in something that they are selling. A real self-directed IRA account will let you invest in something which is legal and completely allowed. The legal investments are tax lien certificates, real estate, tax deeds and lots of other common investments. The real IRA organizations are not allowed by law to sell you investments. The only thing that they can do is that they can give you suggestions and recommendations how you should make an investment, what paper work is needed etc but they are prohibited to take fee on your investment. These type of companies are only few in the country and you will not find much of them.

You must be looking for whether there is any kind of fees involved in opening or maintaining an IRA account. You must be surprised to know that they are very less fees as compared to the government taxes that you mostly pay on your income or investment. So, what you are waiting for?

Institutional investors in tax liens

2008-06-22T21:48:00.001-07:00

Institutional investors in tax liens

Tax liens are open for individuals through auctions but institutional investors in tax liens are very popular since they can pay the money instantly. Certain auctions are limited to the institutional investors alone. The institutional investors include bigger institutions like banks, insurance companies and the like. If you are an individual tax lien investor, you should not dare to compete with these big people as they have big money to be invested and you can never match with them.

Institutional investors in tax liens are generally more interested in buying tax liens on homes. They are always looking for properties that can be liquefied easily. Also these investors prefer minimum capital requirement and they will be ready for lower interest rates. These institutional investors in tax liens are preferred by the states also as they can have high influence. These big investors can clear the bank formalities and close the foreclosure at the earliest. The security regulations for institutional investors are also less because they are highly reputed organizations that can secure payments.

Institutional investors in tax liens can make good profits because they can do extensive research about the property with their links. Hence when you have institutional investors in the auction, you can be sure that the property with high market value will not be yours. As an individual investor, you will be bidding for highest interest rates while these institutional investors can bid for much lower interest rates because they don’t make profits with the interest rates.

In the case of auctions that prefer bidders with higher premiums, institutional investors in tax liens can easily win the bid because they can quote a price that is not possible for any small investor. Their resources are not limited and they concentrate on properties that are located in important states. The number of properties they can acquire is almost endless, as the institution will have large capital ready for investment. Apartments, flats and houses that are near airport, bus stops and terminals are preferred by institutional investors in tax liens as they have higher scopes in the future.

Best states for tax lien investing

2008-06-22T21:42:00.000-07:00

Best states for tax lien investing

Tax lien investing is a profitable investment strategy that can help you gain rights on a property at a fraction of the actual market price. To get more out of the property you buy, you should know the best states for tax lien investing. For any property, it is the location that is very important. The taxes will also be calculated based on the locality and value of the house. The amount you have to invest also depends on the state in which you are investing.

People are looking for best states for tax lien investing because they can get more money on the interests. With tax lien investing, the assured income is from the interest on the money you have invested. Hence it is perfectly logical to invest in a state that offers higher interest rates. Tax lien interest rates are fixed rates and once you are able to locate best states for tax lien investing you can enjoy higher interest rates.

The Best states for tax lien investing are advantageous in another way too. When the property owner fails to pay the taxes, you will get ownership of the property. The states that are offering higher interest rates are important states that have higher real estate value. You will be able to make more of out of the property when you have invested in one of the best states.

While doing research about best states for tax lien investing, you should also study the accessibility of the state. You should be traveling to the state for participating in the auction. A few states like Arizona and Florida are offering online auctions in which you can participate without actually visiting the state of auction. However it is good that you are able to visit the state to inspect the property before placing your bid. You should know about the real estate value of the state in which you are investing. Always try to choose a state that is near to you. Information is the key and if you find best states for tax lien investing suitable for you, then you can make huge profits with tax lien certificates.

Our best states for tax lien investing are: (in no particlular order)
Maryland
New Jersey
Florida
Texas
Georgia

2008-06-18T12:23:00.000-07:00

When a government agency files a legal claim in court against any person or business which owes taxes to the government, it is called a tax lien. These taxes are claimed by attaching money or property of the person or business against their repayment. To avoid legal issues later on, the county courthouse maintains records of all tax liens properties where taxes are due along with all the correct and complete paper work.

Many people are unable to pay their property taxes on time every year after properties are taxed based on their value. This causes them to incur additional taxes and penalties on themselves either due lack of finance or simply because they have misplaced their tax bills. If you default on your dues, the government looks for investors to correct this injustice. Unemployment taxes, sales taxes, income taxes, Social Security taxes, real estate excise taxes, or disability taxes are some of the heads under which Tax Liens can be filed. To affirm the discharge of the property, papers are filed with the courts, as soon as the tax liens are paid.

In the hope of making a lot of profit through tax liens, a lot of investors invest their assets here, but it is important to note here (especially if you are an investor), that in order to avoid any complications, you should get professional help to understand the consequences of your actions. This is because just one disastrous investment can literally wipe out a lot of your capital, not to mention robbing you of any enthusiasm you may have for this kind of investment.

A good place to begin would be to build a profitable portfolio of tax liens for yourself so that you can ascertain why you want to go in for tax lien investment. This portfolio will help you answer your most critical question – “Why would I want to invest in tax liens at all?” Your reasons for considering tax liens will help you decide what kind of investment will be suitable for you.

Over the last few years, the tax lien auctions business has gained wide popularity, largely due to the sudden turn around in the real estate market and the added instability of the stock market, which has compelled investors to consider other methods of investment through which good benefits and a healthy positive outcome can be achieved. There are slow but steady profits in tax liens. Tax lien investments provide you the reassurance that your capital will be earning you profits, and provide you with a set time period in which you can anticipate how you will be realizing your profit.

It is important to note that filing a tax lien can harm your credit rating. You will probably NOT be able to get a business loan, car loan, property loan, etc. while you are processing your tax lien.

2008-06-18T11:30:00.001-07:00

Interest and Penalty Revenue

Interest and penalty revenue is generated through redeemed tax lien certificates. When a tax lien is purchased, the local jurisdiction sets the interest rate as well as the assessed penalty for delinquent tax payment. These interest rates can range from 8% to over 24% per annum. In addition, penalty rates can range from 5% to 10% of the taxes owed. In many cases, jurisdictions will assess the full penalty the first day of the delinquency. As a result, a 5% penalty paid the first day will result in an annualized rate of return of more than 60% when added to the assessed interest rate on early redeemed liens.

Liquidated Properties Revenue

Once the redemption period set by the jurisdiction has expired (ranging from 6 to 36 months), the liened property goes to deed. This means the lien holder now has the legal right to receive title to the property. After a legal process of quieting the title, the deed is conveyed free and clear of all previous encumbrances. In most cases, these properties have been acquired by simply paying the past due taxes. Typically, these taxes represent only 5% to 10% of the current property value. We provide a strategy to liquidate such property at a discount and put the proceeds back to work through purchasing additional tax liens. The returns on such properties can exceed 5,000%.

2008-06-18T11:29:00.001-07:00

Over one hundred years ago, county and state governments passed legislation to help solve a growing problem – the lack of collected property tax revenue. Today, some jurisdictions have in excess of $100M in annual uncollected property taxes which can result in serious cash flow problems.

When property taxes go unpaid, the population of the entire jurisdiction suffers. If the taxes are not collected, there are insufficient funds to pay for police and fire protection, schools, roads, the salaries of county and state employees, for water and sewer treatment plants, snow removal, and other county expenses. The need for these vital services is critical enough that state and local governments across the country have passed legislation to enact laws protecting the income generated from property taxes.

Some form of tax sales has been in place now for more than a century in an effort to protect the jurisdiction's cash flow needs. We believe that we have a unique opportunity to assist jurisdictions in securing the operating revenue needed to remain solvent while also assisting property owners who wish to pay their past due taxes and retain ownership of their property.

2008-06-18T10:48:00.001-07:00

Lien Baron Tax Lien Fund utilizes an investment strategy providing returns for investors from two different sources. First, interest and/or penalty income is generated through the redemption of tax liens and the accrued interest earned on the owned liens purchased by the fund. Second, investors also profit by the sale of properties acquired by the fund through foreclosure. This strategy is executed by a professional management team whose compensation is tied to the Fund’s overall performance, so it is in our best interest to provide you, the investor with the highest return possible.

These factors make the Lien Baron an attractive investment option for individuals seeking maximum capital appreciation with minimal risk and volatility. Now, individual investors have easy access to the world of tax lien investing through participation in the Lien Baron Tax Lien Fund.

2008-06-18T10:47:00.001-07:00

Lien Baron purports that tax lien investment is quite low risk, because of the possiblity of only two different outcomes. First, the owner of the property that is subject to the lien pays the lien holder back. State governments mandate the amount of interest to be paid to the lien holder. Or secondly, the lien holder acquires the deed to the property through foreclosure of the property. The new lien holder can make a significant profit through the sale of the property.

County governments across the country look to investors like Lien Baron to aid them in the collection of real estate property taxes. Without the revenues from property taxes, counties are unable to fund many services, such as public schools, fire departments and police departments. County governments will place a lien on a property when the property taxes are not paid by a property owner. The lien is a legal action by that particular government organization that encumbers the property to encourage payment of property tax debts. The governments attempt to warm the property owners directly and then will auction of the tax lien certificates to private parties if the the liens are not settled. The governments do this in order to receive the necessary funds. Lien Baron is then entitled to the amount of the tax lien certificate plus interest and penalties set by the state, to be paid when the property owner settles the debt.

Real estate tax liens are attached to the property and not to the owner of the property. Any tax lien on a property must be paid off before title is allowed to be transferred, or else the lien will remain tied to the property. Such a circumstance makes it difficult for property owners to sell properties encumbered by tax liens. If a tax lien is not satisfied and the tax lien holder forecloses on the property, junior lien holders no longer have claim to that property. For example, a mortgage company would lose its right to payment. For Lien Baron, this means that when one of the liens goes unpaid, it can acquire the property for the cost of what it paid for the lien certificate, and the mortgage gets wiped out. Lien Baron will be under no legal obligation to pay off mortgages on the homes acquired through purchase of tax liens.

Like the set interest rate for investors, a grace period is fixed by state governments for delinquent tax payers. If the owner redeems the taxes, the interest and penalties owed within the allotted amount of time, Lien Baron than has the right to receive the state assigned interest amount over the tax lien. However, if the lien is not satisfied within the state designated time, Lien Baron will have the right to foreclose on the property.

Billionaire H. Wayne Huizenga $1,000,000 Property Sold at Tax Sale!

2008-06-18T10:38:00.002-07:00

He's the only person in history to build three Fortune 1000 companies practically from scratch: Waste Management, Blockbuster Entertainment and AutoNation. He also owns the Miami Dolphins and is previous owner of the Florida Marlins baseball team and the Panthers hockey team, making him the only person ever to own three pro teams in a single market, two of which won national championships.

For H. Wayne Huizenga, the financial wizard who has turned struggling companies into enormous empires, this could be a $1,000,000 blunder. But for a tiny group of investors, it's a killer coup; at Huizenga's expense.

Broward County unloaded a million-dollar chunk of land owned by a Huizenga company in northwest Broward last month at a courthouse auction -- the very place where properties are sold when owners can't scrape together enough to pay their taxes.

But billionaire H. Wayne Huizenga? Owner of the Miami Dolphins and Florida Marlins? Broward County put Huizenga's Coconut Creek land on the block after one of Huizenga's companies failed to pay a $22,000 property tax bill two years ago. Huizenga was unaware of the delinquent tax bill until after the property was sold.

``We think it's a technical oversight,'' Huizenga's spokesman, Stan Smith, said Wednesday. ``We have a lot of property, and we didn't receive the tax notice.''

The county sent tax bills and delinquent notices to Huizenga. His representatives say they were never received because they all went to his old address.

However it happened, four South Florida real estate investors scooped up the 10 acres during an Oct. 23 auction at the Broward County Courthouse. They paid $47,510 for the undeveloped land assessed at $700,000, and believed to be worth about $1,000,000 on the open market. The tract is part of 80 acres that Huizenga owns at the southwest corner of Hillsboro Boulevard and Lyons Road, just south of the Palm Beach County line.

Why Tax Liens?

2008-06-18T10:38:00.001-07:00

Why Tax Liens?

Tax lien investments are very low risk, because there are only two potential outcomes. Either the property owner pays your investment back with an interest level mandated by the state, or you acquire the deed to the property through foreclosure and make a huge profit through the sale of the property.

The collection of real estate property taxes is paramount for counties across the country. Without this money, the county government would not be able to function. When a property owner fails to pay his property taxes, a lien is placed on the property. A lien is a legal action that encumbers personal property to compel payment of debts. After numerous warnings to the property owner, and in order to get their money quickly, counties auction off tax lien certificates for these properties to investors. The investor is then entitled to the amount of the tax lien certificate plus interest and penalties, to be paid when the property owner settles the debt.

Real Estate tax liens are attached to a property, not an owner. This means that even though an owner is allowed to transfer ownership of the property, the lien must be paid off to transfer the title, or it will still remain on the property. Homes with property tax liens, in particular, are hard for an owner to sell because of the high priority that tax liens carry. Tax lien holders have the right to enforce payment of the debt through foreclosure, allowing them to take title to the real estate asset. When this happens, junior lien holders (such as mortgage companies, to whom a debt of lower priority is owed) no longer have claim to the property. To an investor, this means that when one of your liens goes unpaid, you can acquire the property for the cost of what you paid for the lien certificate, and the mortgage gets wiped out. Investors are under no legal obligation to pay off the mortgage on the home.

Delinquent taxpayers are given a period of time to correct or redeem the taxes in default. This is called the right of redemption. When the property owner pays the taxes owed (including interest and penalties) to the county, the investor is notified to return the certificate. In exchange for the tax lien certificate, the investor is paid the amount on the certificate plus the government mandated interest. If the property owner does not redeem the certificate or deed within the period of time designated by the state, the investor may then proceed with foreclosure on the property, which has been pledged as security for the debt.

Real Estate taxes are calculated each year according to the assessed value of a property. Many lenders require homebuyers to pay into a fund, called an escrow account, which can help pay for future real estate taxes. However, in the past few years, increasing numbers of sub-prime mortgages no longer carried this requirement. As property values increased, so did property taxes. Many homeowners could no longer afford these fees along with their mortgages, and without escrow accounts to cover the taxes, liens are being placed on properties at a rapid rate. This means that there are consistently increasing numbers of properties being made available to tax lien investors.

In tax deed sales, the property is purchased directly instead of purchasing the debt of the property owner. Because the owner has not paid the taxes on the property, the property can be acquired for just pennies on the dollar compared to its true value. The minimum bid for a property is generally the amount of back taxes owed plus interest, as well as costs associated with selling the property.

TAX LIEN FUND

2008-06-18T10:36:00.000-07:00

Lien Baron Tax Lien Fund is a private equity fund that seeks to maximize investor returns by utilizing tax liens and tax deeds to either collect interest on the liens or acquire title to the properties subject to the liens. Specifically targeted will be tax liens on properties with a high probability of foreclosure. Tax lien sales represent a secure and profitable way to maximize the rate of return for our investors. With a resourceful and experienced management team, this business model offers a safe and easy way to maximize investors’ rate of return. The Fund’s target is to provide investors with a per annum return of 25%. The Fund will be made up of 400 units to be purchased by investors for $25,000 each. The total size of the fund will be capped at $10,000,000.

The Fund will participate in tax sales across the United States and purchase tax lien certificates and tax deeds, particularly focusing on the purchase of certificates that will likely lead to foreclosure of the property. Through studies of local economies, governing municipalities, and other contributing characteristics, the profitability of individual properties on which tax liens may be acquired will be assessed. In particular, studies will be done to decide whether the property has a high probability of defaulting on the lien, allowing the certificate holder to actuate foreclosure. In cases of foreclosure, the Fund acquires the property on which the lien was owned, and can sell the home for spectacular profits. If foreclosure does not occur, the interest rate on the lien is collected, which may be up to 25% per year or higher.

The current housing market will provide the optimal setting for tax lien investments. The fallout of the sub-prime market makes tax liens even more lucrative for a few reasons:

There is less equity in peoples’ homes for them to pull out for investment opportunities, there are fewer individuals with capital available to purchase tax lien certificates, so there is less competition now than in the past.
The majority of sub-prime loans done in the past several years did not have escrow accounts set up to pay for increasing property taxes. This means that more properties are behind on property taxes in this market than previously.
Mortgage lenders have been securitizing many loans, selling off pieces of the debts to many different investors. Because of this, mortgage lenders are having a hard time proving who really owns the note, and will generally not get notice of the liens, preventing them from redeeming the debt.
Tax liens are not subject to the up and down trends of the stock market and interest rates.
Tax lien interest rates are mandated by each state, so the return on investment is stable and backed by real estate.

There is little risk when investing in government issued tax liens. Yields from government issued tax lien certificates are fixed by state law, unlike the inconsistent ups and downs of the stock market. The rise and fall of interest rates and the condition of the stock market have no effect on high yielding tax liens. These guaranteed returns can be up to 25% per year until the lien is redeemed.