Is Your Tax Lien Investment Profitable?

Just how profitable is your tax lien investment? If you’re not sure how to check that information, this article will give you helpful tips on how to know how profitable you are.

First off, enter in all tax liens into a spreadsheet or any other software program and then index them according to tax ID and county. Place in the interest rate and the certificate amount. Also put in the paid premium. You will then have to have a formula that will calculate the interest that is due and the penalty amount. Now these formulas will need to consider the days lapsed since buying the tax lien certificate. Make sure that you can check the subsequent taxes along with the interest paid. You will have to learn the method of tracking down all expenses – those that have been reimbursed during the redemption period and those that have not.

So how do you calculate? Take the interest and due penalties of both subsequent taxes paid and certificate amount and then add it to the original certificate amount investment plus subsequent taxes that are paid plus reimbursed expenses during redemption period. The total would be the amount that you will be paid once your lien certificate will be redeemed. If you subtract the total investment amount from this number, the total investment is what you have paid for the lien certificate plus subsequent taxes that you have paid plus both reimbursable and non-reimbursable expenses connected to the lien certificate. This would be your profit. Now, when you have your profit amount, you can then calculate the yield or the percent yield for each tax lien certificates that you have. To get this information, you must divide the profit by the total investment. To convert this to a yearly yield, you must know the days the tax lien was being held for. Then multiply the yield by 365 and divide by the number of days that you have hold on to the certificate.

Just remember that for every state, the calculations for the interest and penalties will be different so you might need another spreadsheet or software program for every state that you invest in.

Why Choose Tax Lien Investment?

Are you looking for a safe investment that still grows even when you’re asleep? Would you be glad there is actually an investment that is guaranteed by the government? Well, you will be lucky to learn more about tax lien certificates.

Looking at the state of the stock market and traditional real estate business, you know you can’t help yourself but think that you’d like something better, something more consistent. And with tax lien certificates, this sure is possible – and you don’t even need millions of cash to start!

You see, when you buy the property’s tax lien, you are not actually buying the property off, instead, you are paying for the property owner’s delinquent taxes. What you get in return is you will be receiving the tax amount that you have paid plus the interest that is being charged by the county. True, tax lien investment is a win-win situation for everyone involved.

Get a load of this:
– The investor can get returns from 8% to 36% per year depending on the state
– The property owner gets more time to acquire money to pay off the taxes
– The county will get the funds needed for the government services

Now if the tax lien has not been paid within a specific time frame set by the state then the tax lien holder has the right to foreclose the property. Sounds great, huh?

What if you want to purchase liens but your state doesn’t hold tax lien sales, what can you do? You don’t have to worry as it is possible to join in online tax lien sales these days. Note that not all tax lien states conduct online sale auctions though but it’s still advantageous that you can participate any online tax sales any time of the year as they have different schedules.

Just remember that the methods and rules may differ from state to state or county to county so it is best to always research and learn before you start investing. Also, don’t forget to always do due diligence so as not to have any regrets in the future.

Checking Out for California’s Tax Deed Property List

If you’re in California and you want to buy tax deeds in your state, you might want to follow these helpful tips and strategies to a successful tax deed investment.

If you want to buy tax deeds online, sign up at Bid4Assets which is for free to be informed of any online tax sales that are upcoming. Just remember though that these tax sales may need you to deposit around $5000 before you are allowed to bid. Though you are not a registered bidder, you are still able to view the list of auctioned properties.

Now, some counties may provide very detailed information about the properties for auction while others may not – it actually depends on the county. While other counties give the property’s tax number, minimum bid amount, and legal description only, others will provide such details as property type, address, and other liens that may be helpful when doing due diligence. If you’re lucky, you may even come across information such as pictures of the properties.

So what to do if the property list does not provide much information online? Well, you can still look up more details on the properties on the link provided by Bid4Assets but this requires you to enter in the ID number for a specific property and you have to check them out individually. Just an advice, transfer the information you have researched on a spreadsheet so it is easier to keep track.

If you think the above free option is tedious then you might like to visit the TaxSaleLists website where you can buy a detailed property list. This option of course will cost you some money.

Another method you might want to try is contact the County Treasurer and inquire if they have information available online or placed on a CD. You can also inquire if they can provide the property address and the property owner’s name. These information is indeed helpful when doing due diligence.

Buying Tax Liens Online

If you’re not able to attend to county tax sale auctions maybe because you’re out of the county or the county is in a different state, you don’t have to worry as you can very well purchase tax liens online. Note that not all states hold online tax lien sales but at least states that do hold online auctions have their sales at different times each year.

The first five states that conduct online tax sales are Colorado, Arizona, Florida, Maryland, and Indiana. Just remember though that not all counties of these states have tax sales online. The process may be different for each county so it is recommended to research and learn about your specific county’s tax lien sale procedure and rules.

Most of the counties require you to register weeks or days ahead prior to the sale. After registering, you can then bid on the tax lien certificate online. Since you are participating a tax lien auction online, there’s a big possibility that they may require deposits while others may have registration fees that are non-refundable. If you do win in the auction, you have to pay within a day or two if the sales use wire transfer. But for those that use ACH Debit, it is required to pay during the day of the sale closing. You also have to agree for the county treasurer to be able to debit from your account.

If you come to think of it, it is fairly simple to register and bid on tax liens online. The hard part is doing due diligence for the properties that are auctioned. Instead of seeing the list of properties to be auctioned beforehand, the properties are actually listed by ID numbers wherein you have to click on a specific property ID number to be able to read more information about the property. There are also cases wherein the properties are individually listed. For other counties, little is to be known about their auctioned properties.

Know More About Tax Lien Investments Before Purchasing Online

Before you purchase any tax liens or deeds online, you might want to consider these facts first:

1. You must know that not there are currently not many states that offer tax lien sales online. But it is definitely not impossible that every year, more counties allow tax lien and tax deed investing online. To make sure, contact your county office if they do have a website that allows online tax sales.

2. The bidding in online tax sales is pretty much competitive rather than physical tax sales because it is rather convenient. Take note that many online tax sales require big deposits before you are allowed to bid and are usually required days prior to the sale.

3. There are online tax sale auctions that may need you to register twice – once with the county tax collector and once with the auction site treasurer. Other counties’ online auctions require just one registration.

4. In order to take part in online tax sales, you have to have a U.S bank account. Other online sales require proof of age and Tax Identification Number.

5. Almost all online tax sales occur only once per year.

6. Do a due diligence on the properties that you are thinking of investing especially with tax deeds. At least learn about the property’s tax assessment details, its market value, and visit the property or if not, have someone check the said property for you. If this is not possible, try to look for its aerial map or its satellite photo.

7. Remember, if you bid on a property and you won, you are definitely stuck with the property, and yes, no refunds. If somehow you don’t plan in paying for the property, just think about the deposit money that you are going to lose just like that. There’s a big possibility that you will be excluded in the next tax sales of that county.

Build Your Successful Tax Lien Portfolio Now

In order to establish a portfolio of tax lien or tax deeds certificates portfolio, follow these helpful steps:

Realize the real intention of your tax lien or tax deed portfolio. Do you invest for current income or for future profit? This question will check the kind of investment that will work best for you – you could be better off investing in tax liens, tax deeds certificates, or tax deeds that are redeemable. Whatever you do in order for you to build a worthy portfolio will always be based on your answer to this question.

Learn where to invest. Know more about the areas that you plan to invest in. So if you decide to invest in many areas or in different states, it is recommended to start in one area first and then prove that you can be successful in that area before moving to invest in another. Remember, not all counties have the same laws and ways in tax sales. Make sure you know all about the procedure before jumping into any investment.

Know all about the tax sale details. Research on things like: where to invest, where and when the tax sale is held in that specific county, where and how to get the list of properties that will be put up in sale or auction, and who to call or ask for help to get all the information you need.

Due diligence on properties for tax sale. This is considered to be the most significant step in the process. It is always recommended that before you bid, you have to do due diligence first on the tax sale properties. You might have to spend more time with tax deeds than with tax liens.

Always be ready when going to tax sales. Be ready with your paperwork and other necessary documents when attending tax sales. There are certain states where it is required to register prior to the tax sale before you are allowed to bid. Others need you to register two weeks before while some states accept just minutes before the tax sale starts. Some municipalities need you to deposit around $100 to $1000 to register. Large deposits will be returned to you if you have not purchased anything at the sale while smaller deposits may not be returned. Also, you have to make sure that you do have the funds before you go to tax sales.

Have a bidding strategy. You have to understanding the bidding process and from there; you can create your own bidding strategy. With this, make sure that you know your limit on how much you are going to pay for a property or how low the interest rate you will be bidding.

Always protect your investment. When you have purchased a tax deed or tax lien certificate, think of ways for you to protect your investment and increase your profit. You might want to follow these tips:

1.) Record the lien or deed with the county clerk
2.) Pay taxes
3.) Clear the property’s title
4.) Foreclose the redeeming right