Tax Lien Investing - An Introduction To The Process
Looking to make a safe, lucrative investment in the world of real estate
? You will likely find that tax lien investing is the surest way to make a profit on your stream of income.
First, you need to decide if you want to invest in certificates or deeds. Certificates are a worthwhile investment for the person with less capital who is looking for a simple rate of return on the initial investment. Deeds are for the kind of person who has money to throw around while buying and selling multiple properties, working on his or her portfolio in the process.
Once you have committed to a type of investment, is it time to find properties that will meet your criteria. Call your local treasurer's office to find the information you need. Ask about the date of the next tax sale and the exact time and location. See if you can obtain a list of the properties that are going to be auctioned. Often, they'll have a list at their office. An alternative route is locating a local newspaper with the listings. Find out the rules of the sale. The rules are never the same from state to state, and the winner can be decided by different circumstances. Ask about any possible interest rates and the processes that go into the calculation.
Next, you'll need to gather important details about each property that is under consideration for investment. Locate the address, the owner's name, an assessment of the value, and the size of the land. Also, find out the history of additions and improvements to the property. You can also find resources on the internet to learn about past sales in the area and the value of properties nearby. When you decide to partake in tax lien investing, ask yourself what kind of properties are worth your investments. Do you want to buy houses that were recently improved or ones that need improving? Does the quality of the neighborhood matter much? Do you want to invest in a residential or commercial property?
At the end of the day, you want to make sure that your tax lien investing is going to result in profits. This means finding properties worth more than the taxes that are owed. If you do this, one of two things will happen: the owner will be able to avoid losing the property by paying off the debt owed, or you will be given a property that can be sold at a profit, covering all the owed taxes.
Once you're ready to place a bid, educate yourself on how the bidding process works. Learn at what amount the bidding starts. Go out and attend at least one auction as a sort of a trial run. Get a feel for the competition and the vibe that surrounds the auctions. The more confident you feel, the easier it will be to place a bid for a property that may help put a little extra cash in your pocket.
by: Alfred Ardis
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