OfflineBetween $7 billion and $10 billion in property taxes go into delinquency each year. For state, county and local governments, failure to collect this much revenue is having a negative impact on their budgets and ability to continue funding obligations and infrastructure. In 29 states and the District of Columbia, governments turn to investors to make up the short fall.
Laws vary, but in most cases the governments can charge delinquent taxpayers from 12% to 24% in interest until they catch up and pay what’s owed. Investors purchase tax lien certificates with which the tax jurisdictions pass along some or all of this interest to the lien holder investors. In some auctions, investors bid the interest rate they’re willing to accept, sometimes much lower than the rate the governments are charging the delinquent taxpayer. Though lower, they’re still rates much higher than the investors can get elsewhere.
One example was an Ohio investor who purchased $20,000 in tax lien certificates returning 17% to 18% in interest. Within two years she got her entire investment back plus double-digit returns. Larry Loftis, an attorney, tax lien investor and author, was quoted in the article as saying: “I just [invested] $1 million last week, and most of the liens I won were at 7%, with a handful at 8%, a few at 9%, two at 10%, and one at 11%.”
But there is risk.
Most homeowners pay back their back taxes within a year. Eventually nearly all of them pay off what they owe in full. Colorado authorities state that 95% of back taxes are paid off within two years. However, that other 5% that don’t get repaid can force the investor to take possession of the property. The investor must work with authorities to evict the occupants. If they can’t, the lien will eventually expire and become worthless.
this is great information i attended a seminar last night in merrillville indiana and i must say that this topic was my favorite parts of the seminar. also i really think its great, that dean has offered so many options of resources to assist you and im currently re budgeting myself to purchase. i just wish there was a way to do more research on this at home. any suggestion would be greatly appreciated:-)
Does anyone have access to knowledge about tax liens? I have been reading a little about it. It sounds very interesting.
Milliem
There is a lot of info online if you just Google it.
Karen
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I'm almost embarassed to ask this "rank beginner" question after reading the many successul posts of deals closed and pending! Congratulations to all of you and hope to join y'll soon. After trying to partner with several REA over the past several months and finding them to take forever to never to provide info I need... I believe I've found my Rock Star REA. Hooray!! Within MINUTES of hanging up from our telephone conversation she had sent me 2 emails..the first, advising me that she had added me to their system and I could immediately go on line to view all the current For Sale listings in the County and the 2nd email she sent included 1400 Properties !! Purchased for Cash in the last 90 Days in the areas we had discussed. My dilemma..I don't want to lose this efficient REA by not being as professional as she is and taking too long to Sift, Sort the properties for Cash Buyers who buy multiple properties. (no names on list, of course)for Most Popular Areas where CB's are actually buying properties..the most popular Type of property purchased and Most popular Sale Price etc. and making a follow-up list as well.
Can someone please give me a clue as how to expedite this process??
Took me 5 hours to pull and list by hand just 26 Short Sales and Properties with a Price Change from her current For Sale listings. Got better at it as I went along, but still took far too long! Your help will be greatly appreciated and I promise to "pass it forward". Semper Fi D-LO