Current Worthwhile Tax Lien Books
I am sure this post has been posted but I am looking for recommendations on current books on beginning in tax lien investing. Anyone have any good recommendations?
thanks
I am sure this post has been posted but I am looking for recommendations on current books on beginning in tax lien investing. Anyone have any good recommendations?
thanks
Ok, since no one here could recommend any good books, I suggest people go to amazon and search for tax lien books there based on the user ratings. That is what I did. I purchased a couple of highly recommended books and will post some comments here after I have read them to try to help anyone that finds themselves in a similiar place as myself.
Question???? What is the advantage of getting a tax lien BOOK over going directly to the taxing authority and getting their printed literature?
Here in Missouri it seems like each and every county is different from the next. I can’t think of any case where someone from a far and distant place can write a book that would cover all the various methods the counties use.
My thoughts are to go to the county collectors (those who sell the tax liens), get their printed literature, read it and ALSO get a copy of the state statutes and read - no, study them.
I can see an advantage in a tax lien sales book in that it might give insight into the process, but it sure won’t / can’t cover the various differences each county uses.
Example: Some counties give you 10% interest per year (.08% month, some give you 10% the day after the sale, some only give 5%. Some counties REQUIRE you have title search done by attorney or Title Company, some reimburse you for the expense, others don’t, and some counties let you do your own title search. I guess I could fill the rest of the page but think you get the idea. And all this may be different depending if you are buying in a First Class county or a 2,3, or 4 class county. (Class is determined by population) Disclaimer: I think most of this is correct
Thanks for the input haynesm. I do agree with your logic. The books are just for understanding the market place and investment vehicle. Since NJ is done at the town level, I am not sure what literature I will find but I will certainly keep an eye out for it!
In my area bidders bid -0- on bare land. I have thought about this a lot too and I am sure that they think they will be getting the land. But the land does not seem that desireable to me. Way out, no utilities, bad roads. However, recently there was an auction in our capitol, a company was auctioning off this same type of land and they were offering to carry the note. So I think that this is where the land is winding up and their return is the interest on the carried note. Kind of a roundabout way to a profit. But a good way.
Also I know a guy that was planning on getting the properties and selling them on Ebay, after full disclosure of where and what they really are.
A tax sale is a periodic government auction where individuals bid on the interest rate they are willing to receive if they pay off the delinquent taxes on specific pieces of real estate. At a tax sale people are actually biding on the amount of interest they want to receive if they pay off a homeowner’s delinquent taxes.Usually when a tax certificate is redeemed, the tax purchaser at a tax sale can expect the amount of money they paid plus the cumulative annual percentage rate they successfully bided at the tax sale. Generally, the percentage rate at tax sales can range from as low as 5% and as high as 30%. Bidding "0" is just a stratgy to gain position on a property. Anyone bidding higher would lose out. Tax sales are an excellent source of investment, however there are primary two potential problems with how they work:
1) A homeowner who has their property taxes auctioned off at a tax sale my never actually pay their property taxes; which means the successful bidder potentially may never get any money back.
2) Every year there are millions delinquent property taxes that are available at tax sales that are never purchased.
The solution to the first problem is that that the holder of a tax certificate can acquire ownership of the property through a lawsuit if the original homeowner does not pay their property taxes off in a certain time frame. This may cost a few thousand dollars but is well worth it because the property is usually worth a lot more. The solution to the second problem is where the SCAVENGER SALE comes in.
After a property has appeared at a certain number of tax sales and it’s property taxes have not been purchased the government then auctions off the actual property to the general public. The beginning bid for properties at scavenger sales is not based on the market value of the property, but rather on the unpaid delinquent tax amount or accessed value of the property. A successful bidder at a scavenger sale will receive an actual deed to the property.
So where can I learn more about scavenger sales? I Googled the term and only saw some scheduled for Cook County, Illinios
That is strange. Maybe its the same scenario as when people bought dotcom stocks for $100 w/ no earnings and barely any real revenue. A speculation frenzy? They must be thinking there is enough potential property value to take the risk. There must have been a real estate guru seminar in town recently
In Illinois, a bidder will bid 0% for one of two reasons:
1) Numbers game, they have alot of money and the property is desirable. If you buy a couple hundred liens, several of them may fall through the cracks.
2) Subsequent tax years. After one buys a tax lien in Illinois, that individual/company has first option at subsequent tax years at a flat rate of 12% a year. This is without competition.
[ Edited by gregb01 on Date 03/18/2010 ]
In Illinois the statutory 1.5 percent per month is valid from the date the taxes were due till the date the taxes were sold. For example, if the first installment was due 5/30/2007 and was sold 10/29/2007, there are 5 months at 1.5 % that get added to the first installment. This money goes to the county, no the tax purchaser.
The bid percent is bid from 18% to 0%.
Investors purchase taxes at 0% hoping that noone will redeem them and they will obtain a deed to the property. The chances of this happening are less than 0.5%. So, it is a numbers game. You have to buy a large number of tax lien certificates in order to realistically expect to obtain a deed to the property.
You can expect to make money on the subsequent taxes, but that hardly covers the research expenses. Chances are the taxes will be redeemed soon after the Section 22-5 notice is served and the investor will receive 0% for his/her investment. That is probably 50% of the cases. So, it is a numbers game, but run your numbers carefully and make sure you have plenty of cash at the sale.
Is the reason that so few liens proceed to a an actual deed to the property due to the bank holding the mortgage on the property coming in and redeeming the taxes? Do properties where there is a mortgage lien EVER proceed to deed?[ Edited by TheMag on Date 07/14/2008 ]
Well, most mortgaged properties get redeemed.
most large mortgage companies employ a tax service company whose job is to pay taxes on time.