| tax lien certificates as an investment for a (very) newbie? |
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shortgrass
First Time Poster
Cash: $ 0.25
Posts: 1
Joined: 05 Sep 2006
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| tax lien certificates as an investment for a (very) newbie? |
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Forgive me if my post sounds a bit naive, as I'm still trying to gather information regarding an upcoming tax lien sale for properties in my area, and whether it's something I should consider doing....
When I first heard about the possibility of buying a tax lien certificate on a house that had deliquent taxes, and then learning that after my states mandatory two year waiting period, that the possibility is there that I could obtain the whole deed to the house (basically , becoming the new owner) , it seemd to good to be true. I was initially looking thru the list of properties with the idea that if I selected , say, 10 houses I liked, the possibility that ONE of them I may end up owning, assuming the other 9 have the owners pay the deliquent taxes...Of course, I would have to pay the deliquent taxes on those 10 houses for the opportunity, I realize. The rate of interest they earn in my state is 8%.....The average of taxes due per property that I'm possibly interested in, ranges from about $150 up to about $1400 per property, but I've noticed some with a ridiculously low amount due, like about $50-$200!....Now, I'm more inclined to think that it is NOT too likely I would end up owning these houses lock, stock, and barrel after the mandatory two year waiting period, because I'm assuming the current owner would never lose their house over such a small amount of deliquent taxes! Then, the idea of just purchasing these tax cerificates as more of an investment, what with the 8% percent interest rate, started to sound intriguing on it's own....Now I'm sort of wondering just what I can or should do, considering my personal financial sitution....I don't have alot to invest....maybe just over $1000, with some careful searching (of the 900 page .pdf file of listings for my state!) , I'm wondering if this is something worthwhile to pursue, as an investment, but also with the remote hope that 1 (or more) property may make it all the way into my hands after 2 years, and I end up owning it outright....so what do you think? Should I make the effort to obtain these , given our states 8% interest rate (my understanding, is that if the owner ever pays the deliquent tax, I'd get my money back for the price of the tax lien certificate , plus the interest earned, I think)......Thank you for any information on this fascinating topic!
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Tue Sep 05, 2006 10:16 pm |
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JPopkin
New Poster
Cash: $ 0.40
Posts: 2
Joined: 09 Sep 2006
Location: Hawaii
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Tax Liens can be great investments. Here is one thing to keep in mind, especially since you mentioned limited funds. Because of the 2 year agreement, to stay in 1st position, you must pay the second years deliquent taxs. So if you purchase a tax lien of 1,000 dollars, but don't have the money to purchase the 2nd years tax lien, you will be put into second possition. You will still get the 8% you mentioned, but will not get the property if taxs are not paid.
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Sat Sep 09, 2006 3:43 am |
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