Profiting From Tax Liens
56614
Finance > Wealth Building
Nov 25, 2007
mike01
Profiting From Tax Liens
Tax liens are liens placed on a house or other piece of real estate because the owner owes taxes on the property that he cannot pay. There is a potential investment for real estate investors in tax liens. However, there is a lot of competition in this field, so understanding the mechanics of the process is crucial to finding success in this field. When a homeowner does not pay the property taxes on his property, most counties will place a tax lien on the property. In many states, these tax liens can be sold at auction to investors. The winning bidder receives a state-issued tax lien certificate on the property in return for payment on the winning bid. After the sale of the tax lien, the investor has to wait for a predetermined redemption period.During the redemption period the homeowner has the chance to repay the lien with interest. This investor that holds the tax lien makes money off of this interest. If the redemption period ends and the homeowner or someone else has not paid off the tax liens, the lien holder can start the foreclosure process. This could end with the lien holder having the title to the home, or through a tax deed sale, which is similar to a foreclosure auction. The tax lien holder can participate in the sale, or can simply sell the property in return for the principal and interest owed on the tax lien. Now, there are several ways that you as an average investor can benefit from tax liens. If you choose to educate yourself further about the process, you can start purchasing tax liens and earning off of the interest on them. However, each state handles its tax liens slightly differently, so it is crucial that you carefully review the rules on your state carefully before you begin buying tax liens. Another way to benefit from tax liens is to purchase properties at tax deed sales. These properties sometimes are available at a deep discount. However, those properties with a high resale value are usually bought before they go to the tax deed sale. Often the properties available at these sales are not the best properties to invest in. The best way to benefit from tax liens is to purchase the property from the homeowner, giving the homeowner the chance to pay off the mortgage and taxes without going into foreclosure or a tax deed sale. This is the best way to get a good discount on a property that you can then sell for profit. To do this, you will contact the property owner before the foreclosure auction or tax deed sale with an offer for the property. Often if your offer is large enough to allow the homeowner to pay what is owed, you can purchase the property directly. If there is a decent amount of equity in the property, you can then turn it around and sell it for a profit. In this situation, both you and the homeowner benefit. You, of course, benefit from the profit you make reselling the property. The homeowner, on the other hand, benefits because he does not have to face the foreclosure or tax deed sale process, both of which can greatly damage credit ratings.
Mike Kar is a real estate investor and mentor who has been helping people succeed in real estate investing and offers an infoproduct on real estate investing even if you have bad credit, no credit and no money. Visit http://www.propertyforeclosureprofits.com
send email to mike01
Write a Review
Add to My Favorite
Refer it to Friend
Report Article
Other links at Finance > Wealth Building
Taxes are a drag for every US citizen who is forced to give away part of their earnings on a yearly basis. While most Americans simply complain over taxes, others are taking a more proactive approach: retirement abroad.
Category:
If you want to share in the riches of America's wealthiest citizens, it may be an excellent financial policy to buy shares in the companies that cater to society's upper income tier, Citigroup Smith Barney suggests. The brokerage firm
Category:
In fact, when used properly, credit cards are a very powerful wealth-building tool! I use credit cards for every single possible purchase. By using credit cards you get...
Category:
Do you know how to make quick money when you need it? Often there are times when you just need some extra money. Perhaps, you have an unexpected expense or you need cash during a trip. Regardless of the reasons, it is helpful to have some viable options a
Category:
Some individuals do obtain and come into contact with wealth at a certain point in their lives. Unfortunately, most people tend to be mistaken in their attitudes of being wealthy. Instead of using and building up what they have to their advantage, most of
Category:
Site Sponsor
Directory Statistics
Articles: 68252
Categories: 501
Yahoo Entertainment
