Question : New Jersey Tax Liens
If I purchase a New Jersey tax lien certificate in July 2004 and the tax paperpayer remains deliquent until July 2005 is there another auction for the second year for the same taxpayer? Or is it my option to invest in the second year as well? If there is a separate auction the second year and another investor purchases whose lien's is senior...mine purchased in July 2004 or investor X who purchased in July 2005?
Thanks Kevin **Please See My Profile**
Congratulations on your lien. I did not buy any myself this year because they all we so expensive.
I am not an expert but here is what I believe.
You have the right to purchase any future taxes a some rate. I think it is 8%. The tax collector will usually contact you but is not required to. A call to the tax collector could clarify this situation. If you do not purchase future tax debt proir to the auction they will be auctioned. If you go to the auction and bid "Prior bids 18%'", I do not know any one who will try to outbid you. If another investor purchases a lien in the next year, you can start foreclosure 1 year before he can. I think he would need to be paid as a part of the forclosure.
I have not heard any stories of NJ Tax Lien investors aquiring any properties of value through forclosure in the last 2 decades so I would say your chances of this being a problem are very small. Every tax lien I have purchased has been paid within 21 months and none of mine have ever had future debt, but I have not bought any liens over $2000. Most tax lien sales I have attend have not had or only had 1 bid from a prior lien holder.
"Or is it my option to invest in the second year as well?"
A prudent strategy is to service the lien by paying the taxes as they become due.
You should earn 18% (perhaps more if the amounts qualify for a bonus) on the subsequent taxes as they become due.
[addsig]
Additional liens that are attached to the popoerty are refered to as sub's. The tax collector in the township will normally approach anyone that has existing liens on a property if they are interested in additional liens. These are acquired by you at the 18% rate. Here is why due dilligence is important. Your research into the property shouly have given you a heads up on how much in property taxes are due each year. You should have a year to save and not be suprised when that phone rings and it's the tax collector. It you don't acquire the sub's it is just another rival that you must give notice to and poetentially buy you out at the foreclosure proceedings.
However at times that may not be a bad thing. In N.J. (although I love my state) we are a dumping ground. Never, ever acquire title on a property that has a questionable past. I saw someone buy a lien and later gain title on a property that was a former dry cleaner plant. Soon after a quite title action the E.P.A. sent notice that they would have to clean the site at his expense!!! DUE DILLIGENCE, It's not fun, It's not cool, It's not easy, but believe me it's worth it.
I hope this helps a little.
Kevin,
I am a beginning investor and would like your advice on buying tax liens in NJ. I have been quite a bit of research but I cannot find any information on where to get the list of unsold Tax Liens in NJ. I found a list for AZ and FL but none in NJ. Please guide me on where to look or who to call so that I can obtain a list to buy the Tax Liens over the counter. Thanks!
lists are published in the local, official newspaper prior to the sale.
a call to each tax collector will tell you when the liens will be exposed for sale
try www.liensource.com