Anybody buy tax lein certificates at the auctions? I’ve read several books about them, just wondering what your experiences have been if you buy these.
The books sure make it sound good, but do they actually turn out yeilding the %'s they say? And do you ever actually wind up owning the property after the 2 year period is up?
Tax Liens are GREAT!!! Just plan on making the 12-21% and never owning the house very few people end up with a house out of it. I think you might get struck by lightning and win the lottery in the same day before you get a house.LOL On the other hand if you buy Liens on Land your chances more then double. Clark County Vegas I hear is paying 21% again. And you don’t have to buy them at Auction there are plenty left over after the auction date. I bet nobodys savings account is paying 12% or better
This was my thought…my state supposedly pays 10% the first year and 18% the second year. Seemed like a good place to get a good return on money. Do you research the property before you buy the lein, or do you just buy whatever is there?
Many tax lien auctions are bid on yield meaning the person willing to take the lowest yield wins the bid. If the competition for certificates is strong then don’t expect to earn the super high yields you read about.
IANAL, but:
This is something I have been looking into. My state (California) does not offer them, but Arizona does. My sister-in-law lives in Glendale, Arizona (maybe she can get me some Super Bowl Tickets) so a business/personal trip may be in order next month
In Arizona the interest rate is up to 16%. It is a bid process. The lowest percentage bid wins. Tax liens are superior to all mortgage (even 1st) liens. Because of this banks usually pay them off so don’t expect to forclose and pick a property for $0.50 on the dollar. I believe I read on one county’s website that 96% of the tax liens are eventually paid off. So don’t listen to John Beck.
Due dilligence is required.
Downfalls: I heard (haven’t finished researching this yet, can someone confirm/deny) that Arizona is the only state which an IRS lien is senior to a tax lien. Bankrupcy can wipe out your lien. It takes 3 years before you can start the tax lien sale process. If someone bought a tax lien from a previous year, they can “beat you to the punch.” You have the right to buy tax lien for the subsequent years, but you have to request this each year. They don’t go out of their way to tell you this.
You also need to visit the property. You may be purchasing a tax lien that’s worth more than the property, a barren wasteland of catus, and barrels and barrels of toxic waste on it.
Hope this helps.
Tgauchsin