Also, be sure to watch my latest training videos on youtube. Click the link below to view our websites or the youtube video.
Selecting an Investment Strategy
It is a general misconception that Tax Lien and Deed investing consists of one primary investment objective. Many become involved because they have heard that they can acquire property for pennies on the dollar. Others become interested in a high rate of return on a secure investment. Much of the confusion can be attributed to the many marketers and promoters out there that attempt to lure people into their databases with catchy sales lines. The fact is that Tax Liens and Deeds are an incredibly diverse investment strategy. The approach you take as an investor will greatly affect the likely outcome of your investment. Those who wish to acquire property may do so through Tax Liens or Tax Deeds. Properties are acquired for 10% to 30% of their market value all of the time in states and counties across the U.S. However, there are also millions of Tax Liens out there paying, or ready to pay investors returns ranging from 10% to 30% or more. What's even more intriguing is that they can do so with nearly zero risk. Between these two common outcomes are a number of strategies that all require different levels of resources and dedication. From the individual with next to no time, to the full time investor, Tax Liens and Deeds have something to offer everyone.
County Websites: electronic OPEN signs for investors everywhere
It's hard to believe that just 15 years ago, the electronic world we know today didn't exist. While this has affected every aspect of our lives, lets specifically look at how it has affected counties, Tax Liens and Tax Deeds across the country.
Tax Liens (and Deeds) have always been an enforcement model for delinquent property taxes. What has changed recently is your average county's ability to sell liens. How has this changed. In the past, the only way that counties could sell liens was for local investors and the occasional out of state investor to purchase them. For some counties this approach worked well, but for others it failed miserably. Counties that were located in real estate hot spots, or in states that offered the highest returns could often draw a small group of locals, as well as financial institutions and out of state investors. Between them all, many counties could sell most of their liens every year. However, for every county that had a successful showing there were 10 more that had a mediocre turn out at best. Imagine counties with more than 5,000 liens available starting their Tax Sales with less then 20 people in the room (including county officials). This was a scenario that played out every year for decades.
So how has the new electronic age changed all of this? Two words, county websites.
County websites are being created and updated daily. Counties that couldn't reach investors in other parts of the country have now turned on their electronic OPEN signs and provided the same information investor had to do hours of on-site research to obtain just 5 years ago. Every county has the ability to sell their liens and deeds now and that equals more revenue for the county. As a result of this, counties that have been historically difficult to work with for Tax Lien investors have changed their tune.
If you're just getting started as a Tax Lien investor, or if you're new to the online aspects of investing, these are most important features to look for on a county website:
1. Look for information about delinquent property taxes or liens on the front page of the County Treasurer's or Tax Collector's web page. Sometimes the information you're looking for can be found on the home page of the county website. It's a good sign that they're going to be helpful.
2. Very Important! Look for a property records search tool on the website. What good is finding a Tax Sale list if you can't take parcel numbers and research the lien or the deed? Record search features are the single greatest tool for online investors.
3. Once you locate a records search feature, look for pictures of the parcels. Some counties have pictures of every parcel right on the county website. It doesn't get much easier than this.
Remember, if you're investing in liens you're not trying to figure out exactly what a property is worth. You're only interested in securing your investment by selecting liens that have been placed on properties that have value.
Ask yourself this question with every lien that you research, " Is the property owner going to redeem this property because of its value, or let it go to foreclosure because it has no use or value. " The answer to that question will tell you whether the lien offers a high level of security, or a higher chance of going to foreclosure.
Working in the same county every year...
The number one objective I have when I train students in any setting is to simplify the process. Anything that I can do to make it easier for students to learn Tax Lien and Deed investing is helpful and of value. Many students become frustrated early on with their training because they begin to get the feeling that Tax Lien investing has to be time consuming.
However, Tax Lien investing doesn't need to be time consuming at all. Much of the time required depends on the strategy that you utilize. It also depends on the county that you are investing in. I always recommend students find counties that make investing simple and stick with those counties. An example of how counties can save you valuable time is with second year liens. Let's say that you attended an auction and purchased some Tax Liens from a sale in a state neighboring your own. If the liens that you purchased are first year liens, some may redeem and some may not. For the liens that don't redeem, chances are that the property owner still isn't paying their property taxes. This means that there is a high chance that the county will issue another lien against the property. This new lien is a second year lien to your first year lien. Many counties will contact you prior to the sale to offer you the second year lien. It's a good idea to purchase this lien because you would be forced to pay it off if you were attempting to foreclose on the property. Foreclosure requires all delinquent taxes be paid before the process may be complete. Often times smaller counties that you invest in regularly will accept personal checks.
This same concept works well with Over the Counter Tax Lien investing. Some counties have thousands of liens available Over the Counter. If you can find a few good investments in a relatively short period of time, chances are there are more. Working in the same county over and over again can save you a lot time in the long run.
naco.org... a website every Tax Lien investor should use...
This might be old news to some of you, but if it's not... it's going to be the greatest thing since sliced bread. Naco.org stands for the National Association of Counties. This site is incredibly helpful for Tax Lien investors that are involved with internet based investing. Go to: www.naco.org
Once logged onto the website, click on the top left tab titled "About Counties". Once the drop box opens under the "About Counties" tab you will see a link for "Find a County". After clicking on the link you will be directed to page with a color coordinated map of the U.S.
Clicking on any state will take you to the contact information and county website for every county in the state. You will also find helpful information such as county population and the number of square miles in each county. This information is very helpful in determining how many liens a county might have. The higher the population, the bigger the Tax Lien sale. Each county name is also a link that takes you to a more detailed profile of the specified county.
At this point you are one click away from the county website if it exists. The county name once again acts as a link directly to the county website.
This is the easiest way to browse county websites across the country. I tend to focus on counties with record searches available online due to how easy it makes the Tax Lien research. Until tomorrow...
The Tax Lien Specialist
Internet based Tax Lien investing...a whole new world
I've been involved with Tax Liens for the last 7 years. When I started with Tax Liens 7 years ago I had to travel extensively and dedicate a lot of time to things like form letters to counties and on site research. It really took iron clad dedication. It was easy to see why Tax Liens weren't a mainstream investment, even though they earned great returns and were virtually free of any risk.
How times have changed......
What used to take all of that time to buy Tax Liens and Deeds can now be done in a few minutes on the internet. From what I can tell the number of Tax Liens and Deeds available online is more than twice what it was last year. Counties keep making it easier and easier to research specific parcels of land online. This means that everything you need to know to purchase a Lien or Deed can be found on the county website. This works incredibly well for normal pre-auction research and for Over the Counter purchases. You can check out the link below for more information, or you can check back on this blog that I will be updating daily with tips, major announcements and general Tax Lien and Deed strategies.
Until tomorrow......
The Tax Lien Specialist
Subscribe to:
Posts (Atom)
