I have recently become interesting in learning more about buying tax lien certificates. My concerns are where to find the accurate information to learn about them, the does and don’t of them and any legal issues that can arise from them that I would have to be leary on.
Tags: Accurate, Best, Buying, Certificates, Find, Information, Lien, Most
Each state has different laws dictating how to cash in or gain possession of the land the certificate is issued on. Go to the county tax office of the area you are getting a tax certificate on and ask them what is required to collect on a tax certificate.
Some states clear the deed on the land and you get the land when you buy the certificate, in other states you only get the right to sue for the taxes owed plus interest. The remainder of states fall somewhere between the two extremes.
The biggest pitfall is you buy a tax certificate and can’t find the guy to collect the money owed, or the guy simply is a bum and you can’t collect from him.
If they were a sure thing to make money on, everyone would be doing them.
The County Treasurer has the rules. You get a bidder number for free. At the auction, you raise your bidder paddle when they announce the property you want. You must pay 2 years of back taxes. The money must be paid in cash or cashiers check in 24 hours. If the owner of the house does not pay for 3 more years, you can go to court and get the deed. If he doesn’t pay for 5 more years (7 total) you don’t have to go to court; the Treasurer hands you a deed. All mortgages are wiped out. If the owner pays up later, you get all your money back plus interest (16% or more).
The only “issue” is that 5 of the properties i got were so flawed that they had no value. i had wasted my money and wished i had never heard of Tax Lien Certificates.
I caution you to thoroughly research this stuff. Tax lien sales have been around for decades. Each state has its own laws and regulations.
First start with the people who are trying to sell you on the concept. Then, verify that information with each county courthouse that you’re interested in buying tax liens from.