” This sort of questions shows me that someone is absolutely interested and is ready to take action. So, let’s answer some of these types of questions that are not answered in my own video series. So can be some frequently asked questions about tax lien investing here. Q1: How can I buy tax liens or tax deeds without going to the auction? A: In most says you have to attend the auction to be able to bid, or have a representative to bid on your behalf there.
But there are 2 techniques you can purchase a taxes lien or deed without actually heading to the sale. A few areas do have online auctions, but not all counties in these says online perform their auctions. Usually just the bigger counties do. Many counties in Florida, California, and Arizona have online tax sales.
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And I know that some counties in Colorado and Illinois have online tax sales as well. Yet another way that investors have obtained taxes liens and tax deeds without heading to the sale, is to bet on left-over liens, this can be done through the mail usually. The only problem is that as tax lien and tax deed investing become more popular, there are less and less good properties left-over following the tax sale.
Q2: I don’t live in the US, can I spend money on Taxes Liens or Taxes Deeds still? A: Yes, in most states you can invest in tax liens and tax deeds even though you are not a US citizen and don’t live in the US. There are always a couple of states you need to be a resident of the state to get, but they are not typically the most popular tax lien claims plus they don’t have online sales.
All you should do in order to buy a taxes lien is to complete a tax form called a W-8BEN form. In order to complete this form you will also need to use for a person Tax Identification Number (ITIN) if you are bidding in your own name. If you are bidding using a business name, you must obtain an Employer Identification Number (EIN).
This is only for tax liens. There is no need to do this to take part in taxes deed sale. Q3: Just how much money should you get started with the tax lien trading? A: The beauty of taxes lien investing instead of tax deed trading and other types of real property investing, you could start with a very small investment.
The first very profitable taxes lien that I purchased started with a short investment of only a couple of hundred dollars, on a small sewer lien. I QUICKLY could pay the next sewer taxes another couple of years and rather than seeking to foreclose I simply kept paying the next taxes. 5000 over another year or two. The lien finally redeemed and I gathered 18% per annum on most of my investment plus fines.
Q4: How often do you find the property with taxes liens? A: In the condition of NJ where I make investments, very, very rarely do you can foreclose on the house. If you’re thinking about owning property than tax deed investing or redeemable tax deed investing is the way to go. Only about 1% of tax liens will not redeem and of these properties, once you start the foreclosure process about 80% will redeem sometime during the foreclosure process. I’ve been investing for approximately 6 or seven years and I haven’t foreclosed on a house yet.
I do have a couple of liens that I possibly could start foreclosures on right now, but I know that when I do, they will redeem, therefore I let them go just. Q6: Are there risks involved with this kind of investing? A: Yes, there are risks included and that’s the actual gurus leave out, they make it appear so easy.
They prefer to use the term “Government Guaranteed” to make people believe they can’t fail with tax lien investing, that the federal government warranties that they’ll receive a commission on a tax lien. That’s really not true, what they mean by “government Guaranteed” is that there are laws that protect the investor but you not guaranteed to get paid. The promise is the house. One of the things that I really do in my own programs, John, is to teach people how to do due diligence for tax sale properties so that they can totally decrease the risk involved with the tax lien investing.