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Nebraska one of the tax lien states, utilizes this bidding method. In a rotational bidding system, each registered property investor during the auction would receive a bidder number that would control the order in which they bid. Bidder numbers are sometimes assigned according to the order of registration or randomly. Investors who register early would benefit from the latter.
At an auction where rotational bidding is being followed, the opening bids and the interest rate remain constant. The auctioneer would begin the sale by starting with the first investor, and ask if he is interested in the tax lien certificate being offered. If he wants it, the certificate would be given to him. The tax auction then moves to the next property on the list. But if he does not want the property, it would be offered to the next bidders until each property is sold.
Remember to stick to your objectives when in an auction. Never bid on property that is not on your agenda. Bid wisely and keep an eye to those properties that would be worth your money and time.
It is crucial for you to know the types of bidding methods commonly utilized at tax deed or tax lien auctions. One of the popular methods is premium bidding. We are going to talk about premium bidding first and how it is used for both tax deed and tax lien auctions.
About thirty states in the U.S. use the premium bidding method and the process for both tax deed auction and tax lien are quite similar. Premium bidding is the amount over the minimum bid. Bids begin at a minimum and auctioneer asks the people during the auction if there are any bidders for each property. Bidders who are interested raise their bid cards and place their bids until there is only one bidder left. Furthermore, you would only acquire interest on the minimum bid amount at a tax lien sale, and so any amount is not recovered by the investor. It is because of this fact that you are willing to pay for the properties you’re interested in by knowing how much premium.
Premium bidding in a tax deed auction is just like in a tax lien sale, where the successful bidder is the investor willing to pay the highest premium on a tax sale property. The increments in the bid amount would depend on the minimum bid set by the county and state. Tax deed auction premium bidding method is also known as a competitive or open format. Also, put into mind that you are bidding to acquire the deed to the property in a tax deed auction. So, you would not think about the interest rate here unlike in a tax lien. Premium bids can go as high as eighty percent of the assessed property value which is not common at tax deed auctions.
Remember that it is very important to stick to your plan. Do not go over the limit and budget you have set for yourself, no matter how the bidding goes on each property. And before you go to the sale, do some research ahead to get a good idea of the market and appraised values of the properties. In this way you would get good deals on properties at high discounts on both tax deed and tax lien.
In a tax lien sale, you actually get the lien certificate of the purchase and not the property itself. This certificate documents you as the holder of the lien. What make a tax lien certificate an attractive purchase are the powerful rights that come with it.
The great potential for making profits with tax lien certificates is just simply amazing. You can earn big profits from this real estate investment. If you work with an effective and sound strategy and always sticking to the basics, you would surely earn good profits on every transaction. Plus, take note that there are properties that only need a small investment but has high market value.
Overall, tax lien investment is very safe because the government handles the sale process and you get your return of investment. But if anything goes wrong which is just slim, you can always secure the rights of the property by foreclosing the lien certificate in order to acquire a deed.
Every successful business venture needs a support team in order for it to work. It takes a team to be successful at tax deed and lien investing. You, the investor are the most important part of the team but cannot do all the hard work by yourself especially with a tight schedule. So who is on your team?
Realtor – the one who will handle the selling or rent of the property
Rehabilitator- the one who will fix a neglected property
Lawyer – the one who will clear the title of the property
Title Searcher – the one who will check the title of the property
Office Manager – the one who will take care of all of your paperwork
Investments are profitable as you’d like them to be if you have the team to help you be successful. You can also do this all yourself if given enough vacant time to do due diligence.
One of the best real estate investment opportunities where you can expect a good return on your money is by purchasing tax liens homes. Here is an insightful explanation to provide you a better understanding on what tax lien investing is all about.
The sale of tax lien properties happens when a homeowner fails to pay his tax dues. The government would then set a lien on the property, and put up for sale to the public in order to recover lost taxes. Tax sale properties are sold to the highest bidders but do not give any property rights yet to the lien certificate holder. The certificate would only allow them to collect taxes, and any interest earned in the process when the homeowner pays up.
A lot of people are facing tax foreclosures with the economic downfall. It is a sad reality for the homeowners to lose property rights that they have invested for many years because of tax debt. Still, tax dues would be paid eventually before the redemption period ends, and this assures you as the lien certificate holder to claim sure profits.
Would it be a wise decision on your part to invest money in tax lien certificates? The answer is yes but let’s explain firs what it is in order for you to understand its process.
A lien is levied against a tax delinquent property whose owner has not paid his taxes on time. Liens are made public. This gives opportunity for investors to bid on lien certificates at a tax sale. When you bid and win at a tax sale, you’re going to become the holder of the lien certificate. You have agreed to pay the tax debt of the property owner and in return the right to collect the taxes and interest plus any penalties. However, this does not give you the right to the property yet. The interests you get depend on the rate of the state and could go as high as twenty-four percent. Now this is the reason why tax lien certificates are an ideal investment.
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- Exactly How To Start Buying Tax Liens Today
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