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| | | | | Avoid the Pitfalls of Investing in Tax Lien Certificates by Brad Owen | | | Today bank accounts may not be safe, the stock market is volatile, and investing in real estate may not be a good choice. Buyers beware of new exciting ways to invest your hard earned dollars. Many companies are standing by to take your money by convincing you that what they have is a secret, or difficult to accomplish, or even worse, guaranteed by the government. Buying a home for pennies on the dollar is by far the most misleading advertisement on the market today.
Typically, you will be watching an infomercial, where a sexy lady is half undressed standing next to a supposed successful real estate investor. The claim is made that you can invest your money into a guaranteed government backed program that allows you to purchase real estate at pennies on the dollar. They show examples of real estate that has been purchased for pennies on the dollar in order to prove the point.
The truth is that if you are going to purchase real estate for pennies on the dollar, it IS possible, but it takes time and knowledge in order not to loose money. First of all you will need to purchase a tax lien certificate on a property that you are interested in buying. Then you will need to wait for a period of time (up to 5 years) and hope that the owner does not pay his taxes. By the way 95% of tax lien certificates are redeemed by the owner of the property. Then you must foreclose on the property and it is yours!
Sounds easy? Wrong! First, tax lien certificates are not easy to find; second, the properties tax lien certificates are purchased on rights of way utility, mineral rights, and some may be worthless property; third, the county charges a fee to the investor, plus some counties require a deposit; and last of all, the larger counties charge a fee for just the opportunity to get your hands on the data showing all of the available tax liens.
Now to get to it... how to avoid making bad decisions when purchasing tax liens.
Tax lien certificates are issued from individual counties seeking to meet their budget. A tax lien is placed on real property when the taxes are not paid by the property owner. The investor buys the tax lien certificate for face value plus a fee, and then is promised by the county a fixed interest rate until the tax payer pays the taxes. Most tax lien certificates are redeemed by the tax payer. When the taxes are paid, the investor is paid the face value of the certificate, plus interest for the time that the taxes were delinquent.
It is not guaranteed that you will make money when you invest in tax lien certificates; in fact you can and will loose money if you lack the education and experience. Just a few examples include: buying tax lien certificates from online forums, EBay or other online auctions; purchasing tax liens directly from a government entity, paying the fees, then the tax payer pays the taxes the next month; buying tax lien certificates on a property that is not able to be sold for more than the taxes are worth.
With the proper education and experience any investor can take a good real estate portfolio and beat the interest rates given by money markets or the stock market. But there are ways to loose money investing in tax lien certificates... so investors beware!
Tax Lien School, LLC is a company dedicated to teach the truth about tax lien investing. They make it possible for educating anyone from any background to learn the business of investing in tax liens. They have an article entitled "Avoid the Pitfalls of Investing in Tax Lien Certificates" that contains more detail about this subject. They have a database that contains thousands of tax lien certificates available for purchase. They also have a one on one personal mentoring system to get you started quickly, without making mistakes. | | | | Article Source : Article-treasure.com | | Publication date : 11-07-2009 | | | | Article by Brad Owen | | | | The Author is the President of Tax Lien School at http://www.taxlienschool.com | | | | Keywords : tax lien, tax liens, investment, investments, safe investment, safe investments | | | | |
