A Crash Course in Tax Lien investing

[realdealrealestate1]

Great Video! You explained the process to investing in tax liens very simply

[untitled101]

Where can I find tax liens to invest in? I live in Los Angeles, California.

[thetaxlienspecialist]

@untitled101 Tax liens can be found across the U.S. There are basically 3 property tax enforcement systems used in the United States, tax liens, tax deeds, and redemption deeds. Which system is used in a particular county depends on state laws. California is a tax deed state. Arizona is a tax lien state. Texas is a redemption deed state. Tax deeds are properties that have been foreclosed on by the county due to delinquent taxes. Liens earn interest rates. Deeds are to acquire property.

[XionXXXX]

This is exactly why I think the foreclosure housing crisis was actually artificially started by the banks, wall street, and ultimately state and local governments, it is stealing from the taxpayers and giving to the banks and wall street execs. Just think how much money bankers and real estate agents made off of all this, and its all untaxable too, government policies are failing the taxpayers of this country and no one seems to care in Washington either...

[thetaxlienspecialist]

@XionXXXX Tax liens and tax deeds haven't had much, if any effect on real estate value, or foreclosures. The main reason is that there simply isn't enough property tax based foreclosures to change anything. Counties are very slow to foreclose on property. It usually takes many years. No one wants to lose a property to foreclosure, especially when the amount owed is a small percentage of the overall value. Usually a lender or home owner will pay what's owed to avoid foreclosure.

[ElectricEntertaiment]

@XionXXXX This has nothing to do with the housing crisis. It was lending money to people who could not pay it back along with "Flippers" buying houses already way above fair market value then painting them, maybe putting tile floor in, then turning around and selling the houses for 3 times what they are actually worth, then banks give loans to buyers who cannot pay the loans.

[ShoutGlow]

Tax Liens needed by government to pay for services, yet by selling tax liens for under housing market values, government destroyed housing market & value of homes, caused most forclosures & bankruptcies. Those hanging on & paying property taxes now have hardly any value left to homes. In the meantime the courts are making money off forclosure & bankruptcy cases while neiborhoods are turning into slums. Just another way our government has ruined economy.

[thetaxlienspecialist]

@ShoutGlow Tax liens and deeds haven't harmed the housing market. Here are a few reasons why. First, tax liens only represent a lien against a property. In most cases the lien redeems and the property owner keeps the property. Tax liens redeem when the owner pays the bill in full. These properties are never foreclosed on. Second, while tax deeds are properties the county has foreclosed on, there aren't enough to make any difference in the housing market. They existed long before crash.

[thetaxlienspecialist]

Thanks for watching the video. This video is getting old and outdated. I'll post a new video series soon. The main point I would like to get across now is that there has never been a better time to get involved with tax liens and tax deeds. The internet has changed everything about the investment, and made it much easier for investors to pursue. We've never seen the types of opportunities we're seeing now.

[johndunktoomuch]

If the person living in the house eventually pays the taxes before those two years, does the investor make any money, or do they lose the money that they invested(the taxes they paid)

[thetaxlienspecialist]

@johndunktoomuch Sorry for the delay- The scenario you described is actually what happens most of the time. Yes, any time the property owner pays the county what they owe in taxes and fees to the county, the lien associated with the debt is removed. When the lien is removed the county sends the investor a check for their initial investment + interest rate return. Tax liens work best for earning high interest returns on a safe investment, but they should be considered a long term investment.

[johndunktoomuch]

@thetaxlienspecialist Thank You.

[JasonSpenc]

What risk does a homeowner declaring bankrupcy pose to the process and investor's return? Thanks in advance for your reply. Great video.

[ChocolatePoop1301]

How can you foreclose on the home if the bank hold a mortgage? Do you split it with the bank?

[thetaxlienspecialist]

@ChocolatePoop1301 That's a great question. I don' want people to get the wrong idea. The majority of the time tax liens against properties with mortgages redeem. No one wants to lose a property to foreclosure, especially for such a small amount when compared to the property value. However, foreclosure notices go out to anyone with financial interest in the property. If they don't respond, the property is foreclosed on and awarded to the lien hold. The mortgage company would lose out.

[thetaxlienspecialist]

@ChocolatePoop1301 That's a great question. I don't want people to get the wrong idea. The majority of the time tax liens against properties with mortgages redeem. No one wants to lose a property to foreclosure, especially for such a small amount when compared to the property value. However, foreclosure notices go out to anyone with financial interest in the property. If they don't respond, the property is foreclosed on and awarded to the lien hold. The mortgage company would lose out.

[ChocolatePoop1301]

@thetaxlienspecialist If the other parties respond, then what would happen?

[ChocolatePoop1301]

What is the average time that it takes for them to repay if they are going to do so? Basically, am I looking at 18% every 2 year or will the average tax lien pay me 18% a year? I know it can very, but an average is helpful.

[tatsumakisempyukaku]

Did he say if owner does not pay back invested that investor gets to own house free an clear of any encumbrance? Does that mean if there was a mortgage the investor doesn't have to pay a mortgage if he gets ownership of the home????!

[DavidNelsonSkates]

how do you file for taxes if you are buying a tax lien from a different state? Do i need to have a lawer for both states? Also are you forced to foreclose on the property if the owner doesn't pay or could you chose to live in the property or fix it up and then sell it?

[Pkomisky]

I ordered information fron a county in Florida about their tax lien sales.

I received a brochure that stated that contrary to what tax lien gurus

teach you will not automatically get the property if they fail to pay

the taxes with penalities and interest. The brochure said the property

will be auctioned to the public to the highest bidder and you would

have to put in a bid if you wanted the house.

There is also the possibility the the owner of the house could file

for bankruptcy.

[thetaxlienspecialist]

@Pkomisky FL is unique. They offer both tax liens and tax deeds. Tax liens in FL are sold with a 2 year redemption period. In most states the end of the redemption period would be when the lien holder could begin foreclosing. In FL the county forecloses and sells the property as a tax deed. The proceeds are used to pay off lien holders. Most liens on valuable property redeem. Liens work best for interest rate returns. Deeds are best for property. BK's happen, but deeds have already foreclosed.

[magicpurple101]

So the way I see it, the risk lies in the scenario that the home forecloses and the investor now owns the property, the possible liability being the investor may not be able to pay the expenses that are associated with the home. i.e. mortgage, property taxes, utilities/maintenance, insurance, and maybe costs of trying to sell the home?

[thetaxlienspecialist]

@magicpurple101 In the event of foreclosure, claims such as a mortgage are extinguished in most states. Liens on valuable property rarely go to foreclosure. Liens work best for earning interest rate returns. In fact, they're one of the safest ways to earn rates of 10% to 25%. Deeds are properties that have already been foreclosed on. Upon foreclosure, any owner's rights are extinguished and the property is signed over the new owner. The risks lie in buying useless land, or lien against such.

[enntheta]

Single mom who falls behind on county taxes just THINKS she only owes say $2,000 to the county... but *I* get to jack that up 18%? sweet... I couldn't wait to see the look on their faces "what you mean I owe YOU?" dat's right bitches, your loss is my gain... could I bring in a lawyer and tack on extra fees too? would I as the investor get to physically throw them out? that'd be fun, 'specially if they got kids, fling their stuff into a tree grinder, charge THEM for the fuel to run it.

[powerkor]

@enntheta not to mention the short term MILF opportunities

[thetaxlienspecialist]

@enntheta Sorry for the delay- I didn't see this. It actually doesn't work like that. In most states a person could go for several years without paying their taxes before losing the property. If there is a mortgage, the lender will step in to avoid foreclosure. The lien holder never actually deals with the property owner. The agreement is between the investor and the county. When the home owner pays their taxes and fees to the county, the county cuts a check to the investor.

[TBONEMCT]

in this case: does investor jack get taxed on the total received, the 18% or not, if the property owner pays back delinquent taxes?

[darkvictoryy]

I don't think all States/Counties have the exact same 2 year right of redemption periods as your example indicates. Don't some jurisdictions allow immediate possession once the judge issues a judicial deed (after the auction to the winning bidder)?

[thetaxlienspecialist]

@darkvictoryy The video isn't meant to imply that all counties operate like the example shown. In fact, the opposite is true. The procedures every county follows are based on state laws, and every state has different laws. Some states use liens and some use deeds. The redemption period varies from state to state and ranges from 6 months to 4 years.

[darkvictoryy]

@thetaxlienspecialist I just want to tak immediate posession. I think in PA there is no redemption period (except for Philly).

[NoogLeader]

@darkvictoryy Nebraska has a 3 year redemption rule. SO you are exactly Right.

[thetaxlienspecialist]

@darkvictoryy You're correct, the redemption period varies by state. State laws control much of how taxes are collected and enforced. Most redemption periods range from 1 yr to 4 yrs. You're also correct that some states allow counties to foreclose on delinquent properties. Counties foreclose and create a tax deed. They hold tax sales where they sell those deeds to investors. Buying a tax deed is like any other foreclosure. Ownership is immediate. Good questions...

[Dadoctor777]

So if the owner doesn't pay the lien off to the country and you/the investor forecloses on the property, do you take on the mortgage debt as well? or are you free from that debt?

[me2me23]

What if I acquire the property and I want to sale it, do I need to hire an attorney to do a quiet title since no title insurance want to insure the property until all entity have been notified before the sale? A reply would be greatly appreciated.

[goldboii1]

how much can i buy a tax lien for

[MrJavi010101]

is this a win win for the invester

[tracyjoiner1]

What if a person is in bankrupcy how does that work ? if i want to invest in a property that still has a mortgage but its in bankrupcy?

[brian95240]

Beware of New Mexico (since they don't extinguish any existing liens + mortgage!) This is important if property ever gets redeemed and YOU end up with it. That would be the worst situation possible for an investor looking to invest very little. Arizona is very similar in this area as well. Just check the titles in AZ and NM to make sure there are no encumbrances first.

[skaterdudeabides]

What if the property is foreclosed on for some other reason, such as the property owner failing to pay his mortgage?

Does the investor still collect his money?

[thetaxlienspecialist]

You bet. The delinquent taxes must be paid, whether that's by the property owner, or by the lender. Someone with interest in the property will need to pay the delinquent taxes before the redemption period expires. Otherwise, the property will still be foreclosed on. That's part of the beauty of Tax Lien investing. There are only 2 possible outcomes, either they pay the taxes off or they don't. You either end up with an interest rate return, or you foreclose on the property.

[heightboosting]

@thetaxlienspecialist What if a homeowner declares bankruptcy while the tax lien is outstanding, the bankruptcy court could outweigh the rights of investors, leaving the tax lien certificate worthless in the wake of the IRS ? If a company owns the property and files for bankruptcy, then the tax lien investor will get nothing. What are your thoughts on this ? Thanks

[747Phoenix]

@skaterdudeabides Once you purchase the tax lien you hold first position befor the leander,so even if there's a foreclosure the leander must satisfy your tax lein

[japanz1984]

i love this video,i couldn't be more satisfied..

[edgardospainting]

great video...so let me c if i got this i as an invester have 2 possible out come i pay the bill lets says its $100 low but just an ex..so if he pays within the year i get my 100 bucks back plus $18 so ill get 118?? and if he does not pay i own a new house.and i just paid $100 for it??? just like dat????..if u can reply directly 2 me plz

[thetaxlienspecialist]

Ya, that's pretty much how Tax Liens work. Tax Deeds are another story. They are basically properties that the county has already foreclosed on. There is no redemption period. It's just like any other foreclosure. One works best for earning interest rate returns and one works best for acquiring property.

[unytcommsys]

You oversimplified, but the 'short' answer is YES.

[unytcommsys]

I have been trying to get into this for a few years, but I haven't been able to find a simple internet means of investing in it.

[thetaxlienspecialist]

The rate of return and the redemption period used in the demonstration are only examples. AZ and FL are great places to invest, but the fact is there are great opportunities all over the U.S. Times are changing with Tax Liens and Deeds. The internet is making it easier all of the time. I don't know that there is such thing as "the best area in the U.S." anymore.

[waiting4guffman]

I believe he is speaking of Florida only. My state has a 1-year redemption period. From what I have gathered, The best states for tax lien investing are Arizona, Indiana and Florida.

[taxlienstephen]

Great training - Thanks