tax lien certificates
Question: I’m trying to gather as much info as possible about tax lien certificates. I would appreciate any help that I can get from anyone who has experience in this type of investment. It seems like a good idea on the surface, but I have alot of questions. For example, if you acquire a property through this process, do you acquire the other debts, such as a mortgage, or do you own the property free and clear?? That scenerio seems almost too good to be true, and would make me wonder why everyone isn’t doing it. Any help would be welcome…
Answer: reality is that you normally do NOT acquire tha property. I have owned literally thousands of tax liens. I have earned 16% interest on them. then, if they get to the point where I can request a deed, the property owner pays me off. With a few exceptions, but rarely do you get the property.
Or, you may get a junk property. I say “buy in an area you would want to own, buy liens on nice properties (pay the $1,500 tax bills, not the $30 tax bills because you can ‘buy mre of them’), and then hold on to them until you can file for a treasurers deed. Earn what you can, NEVER pay the premiums in the states where biddig is by premium, and then be happy to earn a good return.
As for title. You get the property without mortgage. Although, the mortgage company will get a notice if you file for the deed. They will pay you off, since they don’t want to lose a $100,000 house for $4,000 in back taxes. they will pay you off, andt hen foreclose themselves ont he property. You can’t stop them from paying you off.
Other liens CAN stay on the property, mostly Federal tax liens. Those will KILL you. And, if the person declares bankruptcy (hey, if htey are not paing taxes, they are not in great shape to start) the court can say that your interst is null and void, or that you earn 2%. Period. NO argument, no recourse. (The courts SUCK int he way that they care less for those of us that are responsible, but only coddle those that want to abuse the system). Those are the biggest problem areas.
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