Advice from Donald Trump on How to Make Money Buying Tax Liens: Officially Tax Lien Certificates

He’s had his ups and downs over the years, but every time he’s been down, he’s found a way to get back up. Donald Trump is a survivor. He’s tenacious and determined—two qualities all investors must possess in order to be most successful.

Trump is a good businessman, and yet the best advice he ever gave has nothing to do with business; on the surface, anyway. It has three parts, which I’ll illustrate throughout this article.

Trump starts this quote out by saying, “Experience has taught me a few things. One is to listen to your gut, no matter how something sounds on paper.”

As an investor in tax defaulted properties, if you stopped right here and forgot the rest of what Trump said, it would have been worth your time to read this article. In fact, you can apply this advice to any area of your life.

Listen to your gut. Said another way; follow your intuition.

I teach courses on tax defaulted property investing and my students are confident they have the tools to make wise investments. This one is the most important. If you’ve done your homework and have followed every step to prepare for a tax defaulted property sale, or tax sale as it’s sometimes called, and something still doesn’t feel right, don’t do it. I’ll say it again, if it doesn’t feel right, don’t move forward with a bid. Trust your instincts, even if you aren’t sure why you feel the way you do.

Multiple Opportunities in Walker County, Alabama Tax Lien Certificates

Walker County, Alabama holds tax certificate sales (tax lien certificate auctions) on properties on which the owners have failed to pay the property taxes for the preceding year. While it varies from county to county, in Alabama the tax sales 9tax lien certificate auctions) typically take place in the spring time, around May. The State of Alabama offers a 12% annual rate of interest, and the certificates have a 3 year redemption period. So, it’s possible to earn a 36% return on your investment, if the certificate is redeemed in the final year!

If, after 3 years the owner of the property does not pay their taxes and redeem the certificate, the owner of the tax lien certificate is issued a tax deed and now owns the property. This process is automatic in the State of Alabama, and not necessarily so in other states. Sometimes, if the redemption period on a tax lien certificate expires, the investor must make use of the court system in order to foreclose on land. Luckily for those who purchase in Alabama, that is not the case.

It’s important to take this bit of information into account when attending a tax lien certificate auction. The winner of each auction is typically chosen by who is willing to pay the most for each certificate i.e. “overbid amount.” When you bid above and beyond the minimum starting bid for a parcel of land, it effectively reduces the profit gained via the 12% interest rate. As such, it is very important to be well-informed when attending tax sales (tax lien certificate auctions) in Alabama to make sure you don’t end up investing in a loss.

Water Ban Continues in West Virginia As County Governments Move Forward With Tax Lien Certificates for Sale

A major chemical spill that has contaminated the water supply in parts of West Virginia and left hundreds of thousands of people without clean water has compounded problems for tax delinquent property owners.

When payment deadlines are not met, counties issue tax liens on these properties and list them for annual tax lien certificate auctions throughout the state. For example, Upshur County begins processing tax defaulted properties with its first legal publication of a list in May of each year. In September of the same year, the second legal publication is made, listing potential tax lien certificates for sale.

Those who want to buy tax lien certificates should make note of the fact that they are sold on an “as is” basis and warranties are neither expressed nor implied by the county. That being said, any tax lien certificates for sale only allow the purchaser to assume the tax lien. Investors are not buying the property or parcel.  

The opening bid at an auction is set at the amount of delinquent taxes and fees due. The purchaser is required by West Virginia state law to pay the current year’s taxes as well as delinquent taxes on any property they purchase. A Certificate of Sale will be issued by the Sheriff and is good for 18 months from the date of issue. During this time the tax delinquent property owner is given the right to redeem by paying all taxes and fees due.

Although recovery of delinquent revenue is vital to the county’s operation, the state of West Virginia has many provisions to protect the property owner from loss. For instance, investors have no right to assume ownership until a deed is issued by the county clerk; in this case, Upshur County.

During the 18 month redemption period there are also requirements placed on purchasers. Purchasers, or investors are responsible for knowing what those requirements are and fulfilling them.

To be sure you are aware of these requirements, a copy of what they call “Obligations of Purchaser” may be obtained by contacting the Upshur County Clerk’s Office. Know them before you intend to bid on or buy tax lien certificates. Failure to follow the requirements could result in the county clerk issuing a Certificate of cancellation for your tax lien certificate.

The West Virginia Water Ban is expected to be lifted in sometime this week, but tax lien certificate investing is here to stay. For more information on West Virginia tax lien certificate investing, please go to: http://www.tedthomas.com/tax-deeds/tax-deed-states/west-virginia-tax-lien-certificates/ 

Remember: research every county auction, whether or not you've bid in the past. Things occasionally change and it’s vital to be abreast of new requirements. Keep in mind that West Virginia is only one of 50 states offering tax defaulted property investment opportunities.

This year there will be over 5,000 tax defaulted property auctions in any of 3,200 counties and 1,400 municipalities around the country. To learn more about how to make money buying tax liens (tax lien certificates), watch this [free tutorial video].

http://www.tedthomas.com/truth-about-tax-lien-certificates/