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Tools of the Trade For Tax Lien Certificate and Tax Deed Investments

By: Ted Thomas

Tax Lien Certificates are the perfect investment vehicle for everyone that wants a low risk and the safety of investing with the government. Tax Lien Certificate and Tax deeds don’t require years of study, and a person can start with less than $500. There are numerous tools; some are basic some are advanced, that a person needs to learn. It’s all very easy and can be accomplished in 3-4 weeks.

Basic Research Tools

The more you know, the better off you will be when it comes time to attend your first auction and start bidding on Tax Defaulted properties. As I’ve mentioned before, the essential information is knowing the who, what, when, and where.

When it comes to finding this information, you have several options. One is to refer to my course materials such as the Comprehensive Tax Lien Directory, Complete Tax Deed Directory, and my Platinum Tax Lien Certificate and Tax Deed Directory software on flash drive.

These days, using a computer is another great way of gathering information. Many counties now post the list of delinquent properties on a website along with the bidding requirements, the date and time of the auction, etc. online.

For the data you cannot find elsewhere, it’s helpful to give the appropriate agency or person a call, so obviously a phone is an important tool.

Transportation is another big one. Whenever possible, you will want to drive by any parcels you are considering purchasing. While you’re there, take pictures of the property and add them, along with your written notes, to a notebook (or other type of device/recordkeeping system, such as a iPhone, laptop or iPad) entry. Don’t rely on your memory to supply the details at a later date.

A final basic tool that everyone needs is time. Don’t rush into a deal without having completed the proper research. Take the time to delve deep into the specifics of a parcel before buying. Do your homework and determine if there might possibly be an environmental contaminant on the property, other liens that will compete against the property tax lien, zoning restrictions, etc.

To recap, the basic tools you need are:
- A directory of tax lien and tax deed offices
– Computer
– Phone
– Vehicle
– Camera
– Notebook or Software
– Time

Advanced Tools

In all cases, you will need to do research on the parcel going to the defaulted auction. Many times the list of properties you obtain includes little more than a tax ID number, perhaps a legal description, and the amount of taxes in arrears. For most of us, that’s not enough to determine if a parcel has any value. You need to get an address so either you or someone you are partnering with can do a drive by; the owner’s name is a big help, too.

In order to get that missing data, the best place to start is at the county office (usually either the Treasurer or Assessor). They may have a cross-reference tool you can use free or pay a small fee for.

There are sites online that aggregate this data. One is Bid4Assets.com.

Human Resource Tools

Not only do you need tools to help you with your tax lien certificates and tax deed investments, you need people, too. These people are your partners who function in a variety of ways to help you with the things you can’t do or can’t provide.

Knowing an attorney you trust can be a lifesaver. He or she will come in handy to advise you on various laws and possible action you can take to defend your assets against worst case scenarios.

A realtor is vitally important. A good real estate agent can give you comparable values, give you an assessment of future values in a particular area, and also easily dig up information on a property that you might have difficulty getting access to.

A home inspector and appraiser are two more human resources that are handy to have available when you need them. After you’ve brought your property, they can help you assess current condition and provide their estimate of value.

And finally a group of people who are willing to provide funds for your investments is always helpful, particularly if your capital stash is limited. Often the difference between getting a great deal or not depends on whether or not you’ve got the cash when you need it. At the Ted Thomas 3 Day Auction Preparation workshop we will show you how to get access to funds to do your Tax Lien Certificate And Tax Defaulted Property deals.

When it comes to being successful with tax lien certificate and tax deed investing, remember that old adage, “to be forewarned is to be forearmed.” There are many tools available and you would be wise to use each and every one.

Remember, too, that you are not going it alone. Join our coaching call every Wednesday night and learn from those who have been there, done that, and made great profits! Our Coaching calls are usually offered as a bonus with my many of my home study programs.


Ted Thomas

Ted Thomas is famous for showing newcomers and investors how to earn 6 figure incomes within 1 year of completing his training program. Conservative investors love tax lien certificates because they are predictable, certain and secure and sold by local government. Tax defaulted properties are sold at oral big auctions and online. Starting bid, only the back taxes…. More information at www.TedThomas.com

The Perfect Investment…One Of Real Estates’ Best Kept Secrets

By Reggie Brooks

When we look at the investment opportunities in the marketplace, we see the same old patterns. “The greater the risk, the greater the reward”. To see where this is played out, look at the stock market. While fortunes have been made in the stock market, fortunes have also been lost in the stock market. Well, if you’re anything like me, you’re going to want to invest where you can gain an edge over your competition. You’ll want to earn higher interest than you can get from anywhere else, and you’ll want to have your investment guaranteed by the strength of our government. Well, hold on to your hats! Such an rare animal actually does exist. It’s investing tax sale instruments. I’ll explain.

We use so many services that are provided by our various counties that we tend to take them for granted. For instance, our firefighters, our police departments, some hospitals, and our school districts are all services that would strongly affect us if they were to suddenly loose funding. So, where do they get their funding? I’m glad you asked. They get it from “property taxes”. But you have to understand this part. This is where you and I as entrepreneurs can make money…

Our government is smart. They know that the average person has an aversion to paying their taxes. That’s why the various state and local governments have enacted laws that provide for very heavy penalties when a person does not pay their property taxes. Then, the government will allow us to pay up the owner’s back property taxes and whatever other fees that have accumulated, and essentially step into the government’s lien position (this is BIG)! Now, the delinquent property tax payer has to pay you instead of the government. And they’ll pay you big! I’ll explain.

When you invest in tax sale instruments, be aware that there are certain states that are tax certificate states, and other states that are tax deed states. A tax certificate state essentially sells to an investor the right to collect interest on unpaid property taxes. The state law sets the amount of interest that the investor can collect. On the other hand, a tax deed state will let the interest and penalties pile up against the delinquent tax payer. If the delinquent amount is not paid within a certain period of time (this is the Redemption period. We’ll talk about the Redemption period in a few minutes) the property will be sold at public auction.

This is our opportunity to possibly acquire property for pennies on the dollar, or make significantly higher than market returns on our investments. These high return on investment interest rates are guaranteed by law to stay high. They don’t adjust based on what any market is doing. They are set by law, and they don’t change. If you invest in Arizona for instance you will earn 16% on your money. Even if you tell them that you only want to be paid 12%, they’re going to pay you 16% anyway.

The only thing that can change the amount of money you make in your investment is a change in the state law. What are the chances of that happening?? Many counties will allow you to invest in these tax instruments by simply mailing in a check. Some will allow you to pay with a credit card, and some will even allow you to invest in these money making tax sale instruments over the internet! Can it get any better?

Here’s something else you need to know. A delinquent tax payer will be given a short grace period where they can pay their taxes without having to pay a penalty. When the grace period expires, the Redemption period starts. The Redemption period can run anywhere from 6 months to 5 years, and will allow our delinquent tax payer to pay the delinquent taxes, accumulated interest, and penalties, and they would then redeem their property. If payment is not received by the end of the redemption period, the local taxing agency will generate a list of liens to be offered at the next tax sale, a “Notice Of Sale” is advertised in a newspaper of general circulation, and the “public auction” scenario is initiated. In some cases the notice of sale will appear in the newspaper 2 to 3 weeks before the auction date. This period is to allow the delinquent tax payer a little more time to pay the back taxes, interest, penalties, etc. If these amounts are not paid, and after many public and private notifications to the delinquent owner, the property can be seized and sold at public auction.

You can greatly reduce your risk by diligently doing your research. It might be wise to do a title search just to make sure there won’t be any unpleasant surprises. Watch out for property that have an IRS lien, or that might be going through bankruptcy. These can become nightmares.

Are you ready for some more exciting news?? This is the part that I like best – all of the junior liens get wiped out! Understand just how big this is. Some of you might not know that in a foreclosure sale, liens that were recorded after the lien that initiated the foreclosure, will be wiped out. Keeping in mind that the laws can differ considerably from state to state, a tax lien is usually considered senior or ahead of the first lien. If you foreclose on a delinquent tax lien and you end up with the house, you’ll own that house free and clear of any liens!!

If you’re looking to improve on the meager little return you’re getting at your local bank, how would you like to earn 18% interest on your money guaranteed, and your checks come straight from the government? If you wanted to invest in tax certificates in West Virginia, you’d earn your 18% return! And if the property is not redeemed within 18 months, you could foreclose and end up with the property.

Maybe you’d like Delaware a little better. Delaware is one of the best places to invest on the East Coast. Investing in Delaware can get you a big 20% return, and if the delinquent tax payer doesn’t redeem his property within 12 months, you get the deed.

In Maryland, you can earn 24% on your money, depending on which county you decided to invest in. The Redemption period is usually 1 year, although it can be as little as 6 months.

If you want to go to Illinois, you can do pretty well. Depending on the type of property involved you can get 18% return if the delinquent property owner redeems the property within 6 months, and 36% return if the property is redeemed after the 6 month period.

Or, maybe you might like to invest in Texas. As an investor, you’ll earn a 25% return on your money if the property is redeemed within the first year. If the property is redeemed after one year and one day, you’ll earn 50% return on your money. Depending on the type of property, the redemption period can be as little as 6 months.

Investing in tax deeds and tax lien certificates can be a fun, risk free strategy to create big income, or an opportunity to capture investment properties for pennies on the dollar. Remember, when you take over ownership of one of these tax delinquent properties, you own them free and clear. There is no better way to get your money working super hard for you than by investing in real estate secured tax sale instruments.