All Forum Posts by: N/A N/A

If a property owner doesn't pay his property taxes, the county doesn't have money to pay for schools and roads, etc. So they let investors pay for the taxes on a short term loan. The loan is secured in a lien against the original owner's real estate.

If the property owner pays the taxes, he has to pay interest. In some states its as low as 4%, some are as high as 25%. That interest and possible penalties all goes back to the investor and the lien is eliminated.

If the property owner DOESN'T pay, in most jurisdictions, he loses his property to the investor. Investing in tax liens is fun and great, but you need a guide if you are a beginner. Don't buy a $3,000 real estate system, instead go buy some cheap books on BN.com or Amazon.

1 Vote

Originally posted by "fizzlemahoe":

Like The Head Line said. How does tax liens work? What are the proceeders in obtaining a tax liens? Once you have a tax liens what happen? What are you suppose to do? How long would it be before you're able to keep the property from doing tax liens? Please Help I don't get how the tax liens work.

0 Votes

Originally posted by "Ryan Webber":

Actually in Texas you don't buy the lien. You buy title to the property, but the prior owner has the right to redeem the property back from you for the taxes plus 25%. For non homestead it is the 6 months, but for homestead properties the redemption period is two years. For that time period you have title to the property but you will not be able to get clear title if you want to sell or refinance it.

Texas is hybrid, not really a title and not really a lien because of that redemption period unlike other tax deed states that give no redemption period. You're right about the homestead properties, it is 2 years.

0 Votes

Originally posted by "SteveGent":

Hi John,

The reason why I ask is because I want to know more about tax lien investing. Is it possible for you to give me the forum ? Have you been successfull in tax lien investing ? What liens are you responsible for if you have to foreclousre on the home ? IRS ?

What if the person declares bankruptcy ? do you lose your investment money ? How do you research the properties ?

Thanks for your time.

Steve

There's a lot to your questions and is highly dependent on quite a few factors like jurisdiction. First, if there's an IRS lien, they can take the property from you within 120 days of the auction (they still will pay you though). If you foreclose on a home, you will have to pay for all back taxes. If the guy declares bankruptcy, it all depends on the court's decision whether to include the tax lien or exclude it. Once again state law and jurisdiction takes precedence.

0 Votes

Originally posted by "bigtex":

Okay, so in buying a lien you are loaning the money that is used to pay off the tax debt. That makes sense. What about the rest of what I said above?

Also, if you could elaborate on the risks involved and what kind of research I'd need to do ahead of time, I'd appreciate it. I realize that any investment will require some due diligence, but in this case I wouldn't even know where to start.

Thanks.

There are some risks like non-paying property owners because you bought a tax lien on a piece of ditch, bankruptcy, etc.

0 Votes

Tax liens are a like secured loans, the govt wants loans from you so they can balance their budgets. For security, they leverage a delinquent taxpayer's property. There are risks involved though, so proper due diligence is required.

0 Votes

Originally posted by "SteveGent":

Hi John,

Have you ever invested in tax liens ? John, I have a friend in Rhode Island and she wants to know ? Thanks

Yes. Every month. I bought a book called Investing Without Losing: The Beginner's Guide to Real Estate Tax Lien and Tax Deed Auctions and have been investing ever since. Mainly because the book has a free web site that posts tax lien/tax deed sales. I also participate in most tax lien forums. Why do you ask?

0 Votes

Originally posted by "troypknutson":

Hey, just to confirm his information. The tax lien will always be paid out of any foreclosure action BEFORE any mortgage notes are paid. The government will always get their money first. When you buy the note, you also buy the advantage of the position in the process. There are several states that offer a pretty high return in the tax liens, but I do know that you really need to know the process before you try to get one. You generally should go watch the process before trying to do it. I have been to several in Texas, and I know that if you don't know who is going to be auctioning a particular property, you will probably never know the auction went down in the corner of the hallway. Get to know some of the good old boys in the area and if you can earn their trust, they will generally mentor you through the process.

As an FYI, Texas and Illinois are the two best return for you money on tax liens.

Regards,

Troy Knutson

For some non-homestead properties, in Texas, you can own the property within 6 months. Pretty sweet. At minimum the owner has to pay the taxes and 25% penalty, a very good return in the first year if it gets redeemed.

0 Votes

Originally posted by "Eager2Win":

Has anybody bought govt reo in fl, the law is a little confusing.

I think its something like the owner defaults with the taxes and you come in and pay for them and after 2yrs you own the house if they have not paid the money back to along with some interest?? does this sound correct?

You're talking about something else.

1. If you have been paying for someone's taxes for 7 years, you can takeover the property.

2. REO (banked owned properties) has nothing to do with taxes.

3. Tax liens bought in a tax lien sale has a redemption period of up to 2+ years, which can then be converted to a tax deed which will then be auctioned.

0 Votes

Originally posted by "SteveGent":

Hi,

I'm currently looking at my tax assessor's database and I'm trying to fiqure out if the taxes are owned or its just the realy taxes. I've provided an outline below. Anyone have any ideas ?

Tax Information
Gross: 186100
Exempt: 93050
Net: 93050
Taxes: 2812.92

Dwelling Information
Style: Raised Ranch
Story Height: 1
Attic: None
Basement: Full

Year Built: 1999
Ground Flr Area: 1008
Tot Living Area: 2078
Living Units: 1
Rooms: 7
Bedrooms: 3
Full Baths: 1
Half Baths: 0

Valuation
Land: 33,500
Building: 152,600
Total: 186,100
Net Assessment: 186,100

Property Picture
[ No Picture Available ]

Sales History
Book/Page Date Price Type Validity
1999/12/15 113,000 Land + Bldg 0

4066/266 1999/04/26 23,000 Land Only G

Out Building Information
Type Qty Year Size1 Size2 Grade Cond
Shed-Frame 1 1970 4 6 C A

It just looks like the taxes for the previous year based on the assessed value.

0 Votes

All Forum Posts by: N/A N/A

N/A N/A has started 0 posts and replied 18 times.

Post: Tax liens for sale in New York, Nassau County

Post: Need Infomation On Tax Liens/Tax Sales

Post: tax lien certificates?

Post: Tax Liens, Question ? (2)

Post: What I think I know about tax liens (am I right?)

Post: What I think I know about tax liens (am I right?)

Post: Tax Liens, Question ? (2)

Post: tax lien certificates?

Post: Buying in FL...

Post: Tax Liens, Question ?