Being The Biggest Loser isn’t Always a Good Thing Avoid Being The Biggest Loser at a Tax Sale (Tax Defaulted Property Sale)

In recent weeks, the popular show, The Biggest Loser has been in the news. Issues around whether contestants, whose goal it is to lose—weight in this case—are losing too much. If you buy tax lien certificates for the purpose of investing, any amount of loss is too much.

If you follow specific guidelines for investing and then adhere to the rules set forth by counties for each tax sale; i.e. tax defaulted property sale, there is little risk of losing. The Biggest Losers are those who act out of ignorance and fail to follow through with research. I’ve met some of them. It’s easy to tell who they are. They’re the ones who make decisions that bury them or saddle them with investments they shouldn’t have made. 

Most tax defaulted property investors will be winners if they learn to use a set of skills that increase their probability of success. Simply stated, those skills are:

Knowledge

Learn everything you can about tax defaulted property investing: what exactly is it? This method of investing has been around for over 100 years. Investors have been using it to increase cash flow, plan for retirement and build wealth. Whether or not you’re familiar with tax defaulted property investing watch this short video for the truth before you go any further: http://www.tedthomas.com/truth-about-tax-lien-certificates/  

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.

Investors: Here is How to Buy a Tax Lien Home (Formally Tax Lien Certificate) in Kosciusko County, Indiana

Kosciusko County, Indiana represents a fantastic opportunity for the budding investor to buy tax lien certificates. The State of Indiana offers an initial 10% interest rate of return for those who win tax liens (formally tax lien certificates) at Kosciusko County’s annual auction. If the certificate is redeemed within the first 6 months after the auction, the investor will receive 110% of what they paid, representing a flat 10% interest rate. That, alone, isn’t a bad rate of return – but it gets better! If the certificate is redeemed in the second 6 months after the auction, then the buyer will receive 115% of what they paid, meaning a return of 15%!

Apart from that, for any home lien (formally tax lien certificate) that is purchased above the minimum starting bid, the purchaser shall receive an additional refund in the amount paid above the minimum bid, plus an additional 10% interest per year on the price difference between the amount paid and the minimum bid.

Lastly, the redemption period on tax lien homes (formally tax lien certificates) is only 1 year. So, if after 1 year the property owner fails to pay the taxes, an investor can foreclose on the property and own it themselves. What this basically means is that, it is quite possible to end up owning incredibly valuable parcels of land for the price of the delinquent taxes owed by the owner.