After working with thousands of tax lien and deed investors we
have noticed an increase in the students that would like to use
their retirement savings for investments. These students have the
motivation and desire to invest in the lucrative world of tax liens and
deeds, but may not have the initial capital to get started. Many of
these students simply want to increase their investment portfolio and
are tired of seeing minimal returns, and in some cases, losses.
Many students have money sitting in a 401K, 403B or a Tax Sheltered
Annuity generating a very limited return. They may have even set
up an IRA, but are not getting the full benefits and the returns they
desire. To understand how this works it is vital to first understand
what an IRA is and how it works:
IRA stands for Individual Retirement Account. A traditional IRA account is a tax deferred
account for personal retirement funds. The IRA account can grow tax deferred until withdrawn. IRA’s can be established for a tax yea401k can be transferred to a self directed account, but when done correctly it puts you in the financial driver’s seat.
There are many companies that set up these accounts. We don’t
recommend one over the other. You can find them through an internet
search engine or by calling the Tax Lien Hotline. We will give you a list
of companies that our students have previously worked with. Whatever
company you choose to set up your self directed IRA with will have
similar processes and requirements. We recommend checking into
several different companies to find the best rate and the company that
is easiest to work with. They will help you set up your account and
give you the guidelines pertaining to investing. You will also be given
a Tax Id number that will be connected to you IRA account.
"What Forms and Information will be required before
Investing?"
It depends on the custodian you are working with but most will ask for
the following:
• General account info, name, address, Tax ID number, etc.
• Description of the lien or deed.
• Amount of funds needed.
• Which county to make the check to.
• How funds are to be remitted.
The History of Tax Liens and Deeds
It is widely known that the forefathers of this country made the treacherous journey to American
to escape the government rule of several European countries. Along with religious freedom, they sought to escape a tax system that provided taxpayers with very little protection. In England three hundred years ago, a property owner that was delinquent in paying their property taxes would most likely lose the property altogether. People were thrown into jail for not paying their taxes all of the time. Our current tax system was implemented early in the history of the country. The system’s objective was to enforce property taxes in an effective manner while still offering property owners a fair chance to settle their debts.
Today property owners are given a grace period following the date taxes are due. This grace period is referred to as the redemption period, or time in which the property owner may redeem all property rights and remove the impending lien. The duration of the grace period is set by state statute, and ranges from 3 months to 4 years. Most property owners have three to five years without paying their property taxes before losing a property.
The Tax Lien and Deed systems in use today are a testament to the great thought and planning that went into the fair collection of property taxes. They were determined not to repeat their past experiences with taxation without representation.
Today, property owners enjoy the peace of mind that if they are late paying their property taxes they won't be sent immediately to jail or lose their property to Foreclosure.
to escape the government rule of several European countries. Along with religious freedom, they sought to escape a tax system that provided taxpayers with very little protection. In England three hundred years ago, a property owner that was delinquent in paying their property taxes would most likely lose the property altogether. People were thrown into jail for not paying their taxes all of the time. Our current tax system was implemented early in the history of the country. The system’s objective was to enforce property taxes in an effective manner while still offering property owners a fair chance to settle their debts.
Today property owners are given a grace period following the date taxes are due. This grace period is referred to as the redemption period, or time in which the property owner may redeem all property rights and remove the impending lien. The duration of the grace period is set by state statute, and ranges from 3 months to 4 years. Most property owners have three to five years without paying their property taxes before losing a property.
The Tax Lien and Deed systems in use today are a testament to the great thought and planning that went into the fair collection of property taxes. They were determined not to repeat their past experiences with taxation without representation.
Today, property owners enjoy the peace of mind that if they are late paying their property taxes they won't be sent immediately to jail or lose their property to Foreclosure.
The New Foreclosure Opportunity
Foreclosures have been hot topic for real estate investors for years and they’re typically the first place new real estate investors look when they wish to get started. With so much publicity and competition is it still possible to make money investing in Foreclosures? The short answer is an emphatic “YES”. There will always be money in Real Estate Foreclosures.
This is important because it is the basis for one of the best real estate opportunities on the market today. Imagine the opportunity to foreclose on tens of thousands of properties for less than 20% of their market value. Imagine a wealth of opportunities held back by their location and accessibility.
Tax Lien Foreclosures
Counties need a source of revenue. The number of services the county government provides might surprise you. Services such as Police and Fire Departments, public education, road construction and maintenance, and the county government itself. Property taxes are the county’s primary source of revenue. We’ve established the importance of the services the county provides with these funds, as well as the steady funding most of them require. The county must have a way of enforcing property taxes. Consider the effects delinquent property taxes could have if not collected.
Depending on the size and population of any given city annual expenditures are likely to be in the millions or billions of dollars. Each state government has statutes and laws regarding the collection of property taxes.
Property Taxes are enforced through Tax Liens and Tax Deeds. A tax lien is a claim made by the County Government against a property within county boundaries due to delinquent property taxes. This claim prevents the property from being sold until the delinquent taxes have been paid. The lien itself is sold at public auction to local investors.
Is it possible to pay your taxes late and not pay some kind of penalty?
Delinquent taxes always have some kind of penalty attached to them. The individuals that purchase tax liens are guaranteed a set rate of return when they purchase the lien. In order to remove the impending lien against his or her property, the property owner must pay all delinquent taxes, penalties and fees.
Upon receiving payment in full the county will cut a check to the lien holder for their initial investment plus the total rate of return accrued to that point. It benefits counties to sell as many liens and deeds as possible. Many counties have had no choice but to sell liens and deeds directly to the public following the sale due to a low turn out for the annual tax sales. It’s not uncommon for counties to have more than 5000 liens or deeds available for a sale, but begin the bidding with less than 20 bidders in the room. In the past there have been far more delinquent taxes than investors in attendance to purchase them in many counties.
This has created a back log of liens which have sat on the books for years. The Redemption period for a lien begins on the day the lien is offered at the annual sale, whether the lien sells or not. This means that liens can be purchased directly from the county with a shorter redemption period than the county's standard time. It's actually possible in many counties to purchase liens that are beyond the redemption period and eligible for Foreclosure immediately after being purchased.
What does all of this mean?
The internet has made small counties just as accessible as large counties, regardless of location. There are literally thousands of opportunities to Foreclosure on properties that are eligible for foreclosure right now.
This is important because it is the basis for one of the best real estate opportunities on the market today. Imagine the opportunity to foreclose on tens of thousands of properties for less than 20% of their market value. Imagine a wealth of opportunities held back by their location and accessibility.
Tax Lien Foreclosures
Counties need a source of revenue. The number of services the county government provides might surprise you. Services such as Police and Fire Departments, public education, road construction and maintenance, and the county government itself. Property taxes are the county’s primary source of revenue. We’ve established the importance of the services the county provides with these funds, as well as the steady funding most of them require. The county must have a way of enforcing property taxes. Consider the effects delinquent property taxes could have if not collected.
Depending on the size and population of any given city annual expenditures are likely to be in the millions or billions of dollars. Each state government has statutes and laws regarding the collection of property taxes.
Property Taxes are enforced through Tax Liens and Tax Deeds. A tax lien is a claim made by the County Government against a property within county boundaries due to delinquent property taxes. This claim prevents the property from being sold until the delinquent taxes have been paid. The lien itself is sold at public auction to local investors.
Is it possible to pay your taxes late and not pay some kind of penalty?
Delinquent taxes always have some kind of penalty attached to them. The individuals that purchase tax liens are guaranteed a set rate of return when they purchase the lien. In order to remove the impending lien against his or her property, the property owner must pay all delinquent taxes, penalties and fees.
Upon receiving payment in full the county will cut a check to the lien holder for their initial investment plus the total rate of return accrued to that point. It benefits counties to sell as many liens and deeds as possible. Many counties have had no choice but to sell liens and deeds directly to the public following the sale due to a low turn out for the annual tax sales. It’s not uncommon for counties to have more than 5000 liens or deeds available for a sale, but begin the bidding with less than 20 bidders in the room. In the past there have been far more delinquent taxes than investors in attendance to purchase them in many counties.
This has created a back log of liens which have sat on the books for years. The Redemption period for a lien begins on the day the lien is offered at the annual sale, whether the lien sells or not. This means that liens can be purchased directly from the county with a shorter redemption period than the county's standard time. It's actually possible in many counties to purchase liens that are beyond the redemption period and eligible for Foreclosure immediately after being purchased.
What does all of this mean?
The internet has made small counties just as accessible as large counties, regardless of location. There are literally thousands of opportunities to Foreclosure on properties that are eligible for foreclosure right now.
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