The tax lien is not redeemed by the property owner within the time allotted by the county
If the state just sells tax liens, than the tax certificate holder can foreclose on the property and receive the deed free and clear of any mortgages. If the state also sells tax deeds, when the tax certificate holder forecloses on the property a second sale will be held, and the property will be auctioned off with the starting bid being the total amount of unpaid taxes. If another investor purchases the property at this sale, at that time the tax certificate holder will receive the initial investment back plus all of the interest he or she earned. If no one bids on the property at the tax deed sale, the property is awarded to the tax certificate holder who started the foreclosure process with all of the mortgages extinguished.
Initial deposits required for the tax sale
Some Counties will require an upfront deposit to be able to register for the sale. The initial deposit can vary from as little as $100 and can sometimes be as high as a few thousand. Almost all of the sales that will take place online will require some type of deposit. Many Counties will require a 10% deposit. For example, the sale in Tampa, FL which is in Hillsborough County requires that you maintain a 10% deposit of the total amount you intend to spend on tax lien certificates. If nothing is purchased at the sale, the larger deposits are normally returned to the investor. Depending on the County, smaller deposits may or may not be returned to the investor, this depends on what is stated in the County Rules for the sale.
I’m the winning bidder
You might have to pay immediately upon walking to the back of the room. You might have 2 hours, or you may have 24 hours like in most Florida Counties. Just keep this in mind…the property owner can redeem the property up until you pay for it in full. So it is definitely in your best interest to provide the County with the funds as soon as possible so it doesn’t get redeemed while you go to get the money out of your bank. You need to know these things, so if you have to get the money or if you need to take the money with you to the sale. It becomes very important. Also, make sure that you have or can obtain the proper funds accepted by the county. Only certified funds are accepted at most tax sales.
Knowing how much to pay for the property
The answer will differ on every property you are interested in. You need to take a close look at the appraised value, market value, and assessed value. You need to weigh the condition of the property. You need to adjust the total amount you are willing to bid based upon if there are any special assessments or liens that will survive the issuance of the tax deed. Next you need to have an exit strategy for the property you hope to acquire. What good is purchasing a property if you have not planned out what you intend on doing with it? You can rent it out, sell it, lease it to buy, move in, etc. Whatever you want to do with the property, just make sure you have thought it through.
After you have developed your exit strategy, you are ready to attend the sale and bid. Bid with confidence and assurance. Just take action and go to the sale. This is the fun and exciting part. This is where you will make your fortunes and take them straight to your bank. Go bid and have some fun in the process. Here is to your financial success and well being in 2010. Happy Investing! Make 2010 your most productive and profitable year ever. There has never been a better time to get involved with Tax Lien Certificate & Tax Deed Investing, ever!
Once I get the deed now I can sell the property
Well, no one in the business teaches you selling like Ted Thomas. Ted will teach you everything you need to know to sell the property and maximize your profits on every deal. Selling properties purchased at tax sales is the fastest way to the bank. When you work with Ted you’ll become a selling sledge hammer. Your head and your notebook will be filled with dozens of selling ideas.
All of the sales strategies you will learn will require you pay no commissions! You will learn how to sell using E-Bay online, how to sell using Craig’s-list online, how to sell using classified Ad’s online, Ted will be giving you his Million Dollar Ads to sell properties in your local and city newspaper, how to sell using classified networks online, and how to sell your bargain purchase using Round Robin Auctions right there on the property. You will learn all the best techniques to get the property sold in days & weeks, not months, and while always maximizing your profits.
Investing in Central Florida
The only guarantee I know of in life is that there are no guarantees (except for death & taxes.) I believe that there is nothing wrong or unsafe about investing in central Florida right now, or in the past, or in the future. You just have to be safe & make cautious decisions. Basically, you have to be well educated in whatever area of real estate you want to invest in. Many of you have heard the saying, “knowledge is power.” Well, this is one statement that I definitely agree with. Research the area you are looking to invest in, find out what the properties are selling for(not what they are listed for, what they are actually selling for)…to do this just get some comps from properties that have recently sold from some local realtors.
Then you can determine what is the most you should pay for a property at tax sale, and still be able to make a nice profit. You live in Florida, so you live in what I consider to be the best state for tax liens & deeds. There are more properties for sale here than any other state (TX will have more sales, over 3,000 a year)…but many consider FL to be the best state because they offer tax certificates in every county once or twice a year…and then every county has tax deed sales sometimes every week, every other week, once a month, or even once a quarter like in Jacksonville.
A lot of people talk about Georgia being a great state for tax sales
Yes, Georgia is a great state for purchasing redeemable tax deeds. In fact, if you know Ted, then you have heard Ted say before that Georgia is his favorite state. For example…if the back taxes are $4,000 and you bid the prop up to $50,000…if they homeowner redeems anytime in the first year, they have to pay you back your investment of $50,000 plus 20%…which would be a cool $10,000…and you never took ownership of any property. All you did was raise your hand, bought the deed, and went home and put it on your desk, and waited for the tax collector to contact you to come and pick up your fat check of $10,000…Even Ray Charles could see that’s a good deal!
Investing with a self directed Roth IRA
Everybody on should have a self directed Roth IRA. Let me say that again, “Everybody, if you don’t already have one, should set up a self directed IRA account.” This is a no-brainer.
The number one thing to understand is that if you talk to your broker, or you talk to your financial planner, or your CPA, or your attorney, or whoever assists with your finances, they will tell you that they don’t know if it is possible to invest in tax liens & deeds through your self-directed IRA.
They will tell you that it is not possible, and if they know anything about it, they’ll say, “Well, it might be too risky to do.”
So, because of all the different reasons of each one of these people…if it’s a banker, they want to keep your money at the bank, and if it’s a stock broker, he wants to keep your account at the stock brokerage firm, and the financial planner the same thing.
So the first thing that you need to know is you CAN use your IRA through a self-directed IRA, like equity trust, to buy tax liens & deeds. Since you are in control of where your money goes, you can make these transactions happen very easily. Just know that you can invest in tax liens & deeds through a self-directed IRA, and know that Ted will be teaching you exactly how to at the Cash Flow Summit. Ted will be going over the 3 different types of IRA accounts. The 3 are the traditional or Roth IRA, then there are the retirement plan IRAs’, and then there is also the educational IRA for children or grand-children.
The last thing I’m going to say about IRAs’ is compounding interest. Compounding interest is the one thing that the wealthy don’t want you to know about. When you use it to your advantage compounding interest can build financial wealth fast. There is a famous quote by Albert Einstein, “The greatest creator of wealth known to man is compounding interest.”