There are seven steps that you need to follow in order to build a profitable portfolio of tax lien certificates or tax deeds. Regardless of which state you are investing in and whether you are investing in liens or deeds, you need to take these same seven steps. The details of how you accomplish each step may change depending on which state you are investing in and whether you are investing in tax lien certificates, tax deeds, or redeemable tax deeds, but the seven steps remain the same. In this article I will outline these steps and give you a brief description of each one.
Step One: Decide on the purpose of your tax lien or tax deed investment portfolio
Are you investing for the future or for current income? This will determine what type of investment will be best for you; tax lien certificates, tax deeds, or redeemable tax deeds. It will be a big factor in deciding where you will invest and in determining your bidding strategy and how you will profit from your investment later on. In short everything that you do to develop a profitable portfolio will be based on this decision.
Step Two: Determine where you will invest
You need to identify the area or areas that you will be investing in. If you want to invest in multiple areas or more than one state, I suggest that you start in one area and learn how to be successful with that one before moving on to another area. Each state and in some cases, each county may have different laws and procedures regarding tax sales. What worked in one area may not work very well in another and you may have a different learning curve for each area.
Step Three: Get the tax sale information
Now that you know where you are going to invest, you need to find out when and where the tax sale is held and obtain a list of properties that are in the sale. For most areas this step will be easy, you just need to know where to go and who to contact to get this information. Sometimes you will have to pay for it and sometimes you will be able to get it free of charge.
Step Four: Do your due diligence on the tax sale properties
This is the most important step in the process and whether you do this properly or not could mean the difference between being extremely profitable and losing money. Once you have a list of properties that are in the sale, you need to do your due diligence on these properties before you bid. The exact procedures that you follow will vary depending on which state you are investing in and whether you are investing in tax lien certificates or tax deeds. You have to do a little more due diligence for tax deeds than you do for tax liens.
Step Five: Prepare to go to the tax sale
Preparing to go to the sale consists of registering to bid at the sale along with getting your paperwork and payment in order. In most states you need to register before the sale in order to bid. Depending on what state and county you are investing in, you may need to register as far as two weeks before the sale, or you may be able to register as soon as right before. Some municipalities do not require you to register ahead of time, only that you submit the proper paperwork if you are the successful bidder on a property. Some counties will require a deposit in order to register. The deposit amount could be anywhere from $100.00 to a few thousand dollars (as in the case of many online tax sales). Large deposits are usually returned to the investor if nothing is purchased at the sale. Smaller deposits are sometimes returned and sometimes not returned, depending on the county. You also need to make sure that you have the proper funds for payment before you go to the sale. For most tax sales, only certified funds are accepted.
Step Six: Decide on a bidding strategy
Before you bid at a tax sale you need to know what the bidding procedure is and what your strategy will be. You'll have to decide before hand just how much you are willing to pay for each property that you want to bid on, or how low (in interest) you will bid. I suggest that you attend at least one tax sale before you bid so that you are aware of what is actually being bid and what the competition is like.
Step Seven: Protect your investment
Once you purchase a tax lien certificate or tax deed, you need to take steps to protect your investment and maximize your profit. Depending on whether you are investing in liens or deeds and which state you are investing in, these steps may include:
a) Recording your lien or deed with the county clerk
b) Paying subsequent taxes
c) Clearing the title to the property
d) Foreclosing the right to redeem
This is a summary of the steps necessary to building a profitable tax lien or tax deed portfolio. In subsequent articles I will take each one of these steps and go over them in depth to give you an idea of what each step involves. For more information about how you can build your own profitable tax lien or tax deed portfolio, I invite you to sign up for the free preview teleseminar to my new 8 week coaching course, "Build Your Profitable Tax Lien Portfolio." To register, go to http://tinyurl.com/f2hy4.
Thursday, November 30, 2006
Friday, November 03, 2006
Selling Your Tax Lien Certificates
I recently did my first tax lien assignment. I “assigned” or sold one of my tax lien certificates to another investor. This was a tax lien that I though I was going to lose money on. Why was I worried about losing money on this tax lien? Let’s just say that I purchased this tax lien certificate early in my tax lien investing career and did not do the proper due diligence. I had made three critical mistakes when I purchased this tax lien certificate. My first error was in purchasing a tax lien certificate on a property that I did not look at myself. I relied on the word of another tax lien investor, someone who was bidding for a large company and is actually my competition. My second mistake, since this was a vacant lot, was in not checking on the zoning. The lot turned out to be undersized thus un-buildable. My third mistake was in paying the subsequent taxes for almost 2 years before I checked the zoning.
By the time I had realized my errors, the redemption period was almost over and it was time to foreclose on the property. I did not want to start foreclosure because I didn’t think that there was anything I could do with the property, and I did not know if I would be able to sell it. I tried to sell this lien to other investors, packaged with a couple of good liens, but no one was interested. So how did I find a buyer for this tax lien and make over 40% on my investment?
When I attend tax sales I like to meet other investors and get to know them, especially the investors that see repeatedly at tax sales and have more experience than I do. I happened to find out that one of the investors who I often saw at these sales used to be a builder and he specialized in undersized lots. He knew how to apply and obtain variances on undersized building lots. I told him about the lien that I was looking to assign. I sent him all of the information about my tax lien certificate with a report of what I had paid in subsequent taxes and what the lien would redeem for. He took a look at the lot and determined that it was a good lot that he could do something with. He paid me the redemption amount of the lien and I assigned my tax lien certificate over to him. I gave him the certificate and signed an assignment contract. Since the tax lien certificate and subsequent taxes paid were at 18% per annum interest, and I had held the lien for more than two years, I received over 40% profit on my investment. I was happy to sell him the lien and get the interest and he was happy to have a tax lien certificate that was ready to foreclose on a property that he thought he would eventually be able to get a variance on and build on.
If you have tax lien certificates that are ready to foreclose, and you don’t want to go through the trouble of foreclosing on them, you may want to consider assigning them to another investor. Tax liens are hot right now; there is a lot of interest in them and it is usually easy to find a buyer for your lien. Not all states allow the assignment of a tax lien from one investor to another, however, so check with the laws in your state first. Assigning your tax lien certificates to another investor is one way that you can reap the rewards of tax lien investing without ever having to foreclose on a lien or own and manage the property. As always, make sure to do your due diligence and you’ll have no problem finding a buyer for your tax lien.
For more information on how to buy profitable tax lien certificates and tax deeds get my Tax Lien Investing Secrets II home study course at http://www.taxlieninvestingsecrets.com/.
By the time I had realized my errors, the redemption period was almost over and it was time to foreclose on the property. I did not want to start foreclosure because I didn’t think that there was anything I could do with the property, and I did not know if I would be able to sell it. I tried to sell this lien to other investors, packaged with a couple of good liens, but no one was interested. So how did I find a buyer for this tax lien and make over 40% on my investment?
When I attend tax sales I like to meet other investors and get to know them, especially the investors that see repeatedly at tax sales and have more experience than I do. I happened to find out that one of the investors who I often saw at these sales used to be a builder and he specialized in undersized lots. He knew how to apply and obtain variances on undersized building lots. I told him about the lien that I was looking to assign. I sent him all of the information about my tax lien certificate with a report of what I had paid in subsequent taxes and what the lien would redeem for. He took a look at the lot and determined that it was a good lot that he could do something with. He paid me the redemption amount of the lien and I assigned my tax lien certificate over to him. I gave him the certificate and signed an assignment contract. Since the tax lien certificate and subsequent taxes paid were at 18% per annum interest, and I had held the lien for more than two years, I received over 40% profit on my investment. I was happy to sell him the lien and get the interest and he was happy to have a tax lien certificate that was ready to foreclose on a property that he thought he would eventually be able to get a variance on and build on.
If you have tax lien certificates that are ready to foreclose, and you don’t want to go through the trouble of foreclosing on them, you may want to consider assigning them to another investor. Tax liens are hot right now; there is a lot of interest in them and it is usually easy to find a buyer for your lien. Not all states allow the assignment of a tax lien from one investor to another, however, so check with the laws in your state first. Assigning your tax lien certificates to another investor is one way that you can reap the rewards of tax lien investing without ever having to foreclose on a lien or own and manage the property. As always, make sure to do your due diligence and you’ll have no problem finding a buyer for your tax lien.
For more information on how to buy profitable tax lien certificates and tax deeds get my Tax Lien Investing Secrets II home study course at http://www.taxlieninvestingsecrets.com/.
Report on the Women’s Power Summit – Part 1
Last week I attended the Women’s Power Summit in Atlanta Georgia and what a great experience that was! The Women’s Power Summit is a one-day seminar held for women only. It coincided with the Big Seminar and is for businesswomen and woman entrepreneurs. The theme of this year’s seminar was how to “Play to Win” as opposed to playing not to lose.
I got to hear excellent presentations from five amazing women on topics from how to get organized to how to beating cancer and building a successful business at the same time. I’m a firm believer that the best way to learn something is to teach it to someone else, so I’m going to pass on to you what I’ve learned at the Women’s Power Summit. Since I took a lot of notes, and I learned quite a bit, I’m going to break it up for you into a series of 4 or 5 articles. Since one of the highlights of the seminar for me was meeting my long time mentor Jeanette Cates, I’ll start off this first article in the series telling you about Jeanette’s presentation.
Jeanette Cates has earned the reputation of being the Technology Tamer. Some of the things that I have learned from Jeanette over the past couple of years in her teleseminar courses include how to set up a web site and a blog, and how to do teleseminars. At the Women’s Power Summit, which Jeanette co-hosted with Alex Mandossian, she talked about how to make money from what you already know. She has a program called “Drain Your Brain” that teaches you to “Create Cash Flow From What You Know.” Jeanette’s formula for doing this is simple. First you must recognize your expertise, secondly you need to figure out a way to monetize your expertise, and lastly, you need to systematize your expertise.
According to Jeanette, we are all experts at something. The first step is to recognize what areas you have expertise in. You can do this by asking yourself the following questions. What is your hobby? What do others tell you that you’re good at? What do you really enjoy doing? What is your professional training? What do have a lot of experience in? From the answers to these questions you should be able to come with some areas in which you have expertise.
Once you discover an area of expertise, the next step to creating cash flow from what you know is to monetize it. Monetizing your expertise will create a revenue stream for you, reward the efforts that you are already putting forth in that area, and re-enforce your confidence and self-esteem in that area. One of the ways to do this is to create information products about your area of expertise. Along with this you will need a way to generate leads for your products and follow-up with customers. You can generate leads for your information products by giving something of value away in exchange for their contact information. One way to create an information product is to start writing tips on your topic of expertise. Once you have a collection of tips, they can be put together in numerous ways. If you have enough tips, you can turn them into a book or e-book.
Now that you know your area of expertise and you’ve created a product to sell, you need to systemize it. By systemizing your expertise you will expand your influence, save time, save money, and increase your rewards. You want a system that will let you start small – start where you are. For instance, you can take written content that you already have and develop it into audios. You can repurpose the content that you already have, add to it and make it more valuable. Your system needs to provide cutting edge ideas, methods to capture new ideas and should include the resources necessary to monetize your ideas.
If this sounds interesting to you and you would like to learn more about Jeanette’s Drain Your Brain Program and learn how to “Play to Win” with your expertise go to www.taxlienlady.com/drainyourbrain.html.
Happy and Prosperous Investing -
Joanne
I got to hear excellent presentations from five amazing women on topics from how to get organized to how to beating cancer and building a successful business at the same time. I’m a firm believer that the best way to learn something is to teach it to someone else, so I’m going to pass on to you what I’ve learned at the Women’s Power Summit. Since I took a lot of notes, and I learned quite a bit, I’m going to break it up for you into a series of 4 or 5 articles. Since one of the highlights of the seminar for me was meeting my long time mentor Jeanette Cates, I’ll start off this first article in the series telling you about Jeanette’s presentation.
Jeanette Cates has earned the reputation of being the Technology Tamer. Some of the things that I have learned from Jeanette over the past couple of years in her teleseminar courses include how to set up a web site and a blog, and how to do teleseminars. At the Women’s Power Summit, which Jeanette co-hosted with Alex Mandossian, she talked about how to make money from what you already know. She has a program called “Drain Your Brain” that teaches you to “Create Cash Flow From What You Know.” Jeanette’s formula for doing this is simple. First you must recognize your expertise, secondly you need to figure out a way to monetize your expertise, and lastly, you need to systematize your expertise.
According to Jeanette, we are all experts at something. The first step is to recognize what areas you have expertise in. You can do this by asking yourself the following questions. What is your hobby? What do others tell you that you’re good at? What do you really enjoy doing? What is your professional training? What do have a lot of experience in? From the answers to these questions you should be able to come with some areas in which you have expertise.
Once you discover an area of expertise, the next step to creating cash flow from what you know is to monetize it. Monetizing your expertise will create a revenue stream for you, reward the efforts that you are already putting forth in that area, and re-enforce your confidence and self-esteem in that area. One of the ways to do this is to create information products about your area of expertise. Along with this you will need a way to generate leads for your products and follow-up with customers. You can generate leads for your information products by giving something of value away in exchange for their contact information. One way to create an information product is to start writing tips on your topic of expertise. Once you have a collection of tips, they can be put together in numerous ways. If you have enough tips, you can turn them into a book or e-book.
Now that you know your area of expertise and you’ve created a product to sell, you need to systemize it. By systemizing your expertise you will expand your influence, save time, save money, and increase your rewards. You want a system that will let you start small – start where you are. For instance, you can take written content that you already have and develop it into audios. You can repurpose the content that you already have, add to it and make it more valuable. Your system needs to provide cutting edge ideas, methods to capture new ideas and should include the resources necessary to monetize your ideas.
If this sounds interesting to you and you would like to learn more about Jeanette’s Drain Your Brain Program and learn how to “Play to Win” with your expertise go to www.taxlienlady.com/drainyourbrain.html.
Happy and Prosperous Investing -
Joanne
Subscribe to:
Posts (Atom)
