Tax Certificates - Posted by Tim W.

Posted by Rob on May 31, 2000 at 19:21:47:

Okay, so you take posession of the property because Joe Blow did not pay you off. What about the mortgage on the property? Are YOU now liable for this lien?

Tax Certificates - Posted by Tim W.

Posted by Tim W. on May 14, 2000 at 13:42:27:

I’ve heard about buying tax certificates for properties where the property owner is behind on their taxes, which then gives them a lien on the subject property.

Can anyone tell me the details of how this works and if it’s a good “investment”?

Re: Tax Certificates - Posted by CC

Posted by CC on May 18, 2000 at 23:02:24:

I used to do tax cert. investing through retirement accounts (i.e., self-directed IRA’s mainly.) My understanding of them has likely diminished somewhat over time but here’s what I recall from working with them:

  • Joe Blow is delinquent on his taxes at 123 Anywhere street (can be a residence, unimproved land – any real property) for a specified period of time (usually 3-6 months.)
  • A tax lien certificate is issued in the subject county and is subsequently put up for auction.
  • You, the investor, bids for the certificate. If you can find those areas that are less popular or less advertised, you can win the bid a majority of the time.
  • Mr. Blow has the right to pay the delinquent taxes once the cert. is issued within a specified period of time – depending on the county, usually 60-90 days. In addition to paying the taxes, Mr. Blow must also pay the holder of the tax lien cert. (you) a specified percentage of interest (I’ve seen as high as 15%.)
  • If Mr. Blow does not pay delinquent taxes, you take possession of the property for the cost of the taxes.
  • Not a bad deal either way…Either you get the specified return on your investment, or you pick up a significantly discounted property which you could then turn around and sell for an even better return.

Hope this helps some.

homework - Posted by RR Smith

Posted by RR Smith on May 14, 2000 at 19:31:13:

use the search engine and search under tax liens, or tax or…

the more you know about any risk the better off you are, for instance it will be another bad year for hurricanes in the gulf. So make sure your SFH insurance is up to date. Tax liens require a long time period (usually) and seldom exercised (you get the house). Like foreclosures, and Lease/options you work the numbers and come up with a winning ticket.