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.

Buy a Tax Lien (Tax Lien Certificate) in Lyon County, Iowa and Earn 24% Interest Per Year!

One of the more important determining factors when one is trying to choose a state in which to buy tax lien certificates online is the rate of interest offered in the state, and the bidding method at the auction. You see, some states offer very high interests rates, like Iowa’s 24%. However, the bidding process at auction brings these interest rates down because bidding requires that you “bid down” on interest, with the winner of the auction being the investor willing to accept the lowest interest rate.

In Lyon County, Iowa, though, that is not how it works. Investors will still “bid down” at the auction – but not on the interest rate attached to the home lien (tax lien certificate). Instead, the winner of the auction will be the investor willing to accept the lowest percentage of the property, should the certificate go unredeemed and the foreclosure process started.

In Lyon County, Iowa, the tax sale (tax lien certificate auction) is held the third Monday in June, and requires investors pay a $25 registration fee by the Friday before the auction. Individuals who win auctions for tax lien certificates will be eligible to purchase subsequent tax liens on the property one month and 14 days after said taxes become delinquent. Many investors choose to purchase subsequent delinquent taxes on parcels of land for which they hold tax lien certificates to keep competing investors from purchasing the liens and possibly foreclosing on the property.

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.

Crawford County, Pennsylvania Tax Deed Sale in January 2014 Was a Success!

On Friday, January 17^th, Crawford County, Pennsylvania held their tax sale (formally tax defaulted property auction) in the assembly room at the County Courthouse. Bidders showed up at 9 am, ready to get down to business and the bidding was fierce! The minimum bids began at $500, with bidders being obligated to provide certified funds up to $3,000 for each bid placed.

What this means, basically, is that there were a bunch of properties in Pennsylvania that were up for auction, with each item beginning at $500. With this information alone, it’s pretty easy to see how investing in tax deeds for sale (formally tax defaulted properties) can be a very nice way to begin creating the wealth you’ve always wanted.

It’s not uncommon at all to have the starting bids on tax deeds start this low. The county isn’t looking to turn a huge profit on the sale. As a matter of fact, the whole point of holding the auction is to get these properties sold and back on the tax rolls as soon as possible so the county can begin collecting on them once again.

This presents a fantastic opportunity for investors who are looking to quickly ‘flip’ a property. Odds are, the price one pays at a tax deed auction (formally tax defaulted property auction) is going to be well below market value. As you can imagine, putting the property on the market immediately at market value is going to garner a significant profit. Even if the property is sold somewhat below market value (in order to force a quick turnaround) the potential profits are still fantastic.

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How to Make Money Buying Tax Lien Certificates in Buchanan County, Iowa

One of the more low-risk investments in the real estate market is to buy tax liens (formally tax lien certificates). The reason for their low-risk is due to the fact that, when an individual is faced with the possibility of losing their property, they are quick to pay their debts. Not all delinquent taxes come from a lack of funds. Sometimes it’s just that the timing of the due taxes doesn’t quite match with the income of some households. When you buy tax lien certificates, you not only give a property owner an additional 12 months in which to pay that year’s taxes, but Buchanan County, Iowa, you can make a 24% rate of return on your investment!

Depending on the state, auction processes will vary. Sometimes the people at the auction will “bid down” on the acceptable interest rate, with the lowest bidder winning the auction. This is not the case in Iowa, and no matter what, you will receive your 24% rate of interest if you win the auction. Sounds pretty good, doesn’t it?

The way you buy a tax lien (tax lien certificate) in Buchanan County is that individuals at the auction will bid on percentages of the property they are willing to accept, should they end up foreclosing (after the redemption period ends). The person willing to accept the smallest percentage of the property will win the auction. The down-side to that is, if the property does go into foreclosure, as the winner of the auction you may end up with a very small piece of the property in the end.

However, tax certificate sales (tax lien certificate auctions) are one of the safest, lowest-risk forms of investment available. If you know which properties to buy (and why), then you have very little to fear. The real work is in doing your due diligence when researching the properties and avoiding those that raise red flags.

Even with all the proof of how tax lien certificate investing is safe and lucrative, many people don’t know how to begin to invest. Some are unaware that you can begin with less money than you’d think. Would you like to know the truth about this 100 year old process? Go to: http://www.tedthomas.com/truth-about-tax-lien-certificates/

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/