Saturday, December 20, 2008

Tax Lien Investing in 2008

The year is winding down and the holiday season is upon us. We will soon ring in a new year and a new leader of our country. There have been a lot of changes this year in the real estate and banking industry, and you might be wondering how this has impacted tax lien investing. So what’s been going on around the country in tax lien investing over the past year?

I have just finished my tax lien purchasing for the year. I only went to a handful of tax sales this year, but I’ve been able to acquire a few new liens. This is what I’ve found in the industry this year and what I’ve heard from subscribers to my web site from around the country.

In the last half of this past year I’ve seen that there are more liens available at the tax sale. It seems that fewer liens are getting paid off before the tax sale. Not only are there more liens available, but there also seems to be liens left over, even in places that did not have left over liens in the past couple of years. Though many of the leftover liens are for worthless properties, some good properties have been leftover as well. This is a change from the past couple of years where not much at all was leftover and all of the properties that were left were junk properties.

Here are the reasons that I think this is happening and why now is a really good time to get involved in tax lien investing. First and most obvious is that we are in a recession and money is tight. People have stopped paying taxes on properties that they’ve been holding onto, thinking that someday in the future they’re going to do something with it. Secondly, loans are harder to get and it’s easier for a property owner to let their property sell at a tax sale and pay the interest on the lien than it is for them to get a loan and pay of the taxes right now. Thirdly, there are not as many investors at the tax sales.

Some investors may have dropped out of the arena because they got tired of the fierce competition that has been going on at tax sales in the last few years. Others may have lost money in other investments – like the stock market, or they may have real estate investments that they are loosing money on right now, and they don’t have the money to put into tax liens. All this means is that there is more available and with less competition.

Now is really a great time to get involved in tax lien investing. I don’t know how long this window of opportunity is going to last. If interest rates remain low, or drop even lower, than tax lien investing will attract more investors. If the economy gets better than there will be less liens available again. My advice is to get involved now while your chances of getting a good rate on tax liens are high. To find out more about the basics of tax lien investing go to If you’d like to find out more about tax liens, you can watch a free video on “An Introduction to Tax Lien Investing” at

Monday, December 08, 2008

Wealth Building Strategies: Ways to Purchase Real Estate Without Getting a Loan

My main wealth building strategy has been investing in tax liens. Now I love investing in tax liens for lots of reasons. You can watch a short video about Why Invest in Tax Lien Certificates on my web site at But I’ve always wanted to be a real estate investor. Regardless of what you may have seen on a late night infomercial, tax lien investing is a great wealth building strategy but it’s not a good way to purchase real estate. In my experience a tax lien on a good piece of property will almost always redeem. That means that you don’t get to foreclose on the property. What you do get is a great interest rate on your money.

The problem with investing in real estate as a wealth building strategy for me has been that usually you need a lot of money, so I’ve been researching ways to purchase real estate without having to put down a lot of money. After all, I’m used to investing small amounts of money at a time – in tax liens.

We finally did purchase our first investment property. We bought it at a real estate auction and got a great price. But what a rude awakening when we went to get the financing! Things have really changed in the past few months when it comes to getting a loan. Sure there are still some great programs out there for first time home buyers and even for people who are not first time buyers, but are purchasing a home to live in. The problem is that banks do not really want to lend to investors.

Fortunately my husband and I have a really good mortgage broker and a good credit scores, but we still had to put 20% down in order to secure a mortgage on this property. Last time we applied for a loan on an investment property (on a house that we ultimately decided not to purchase), we only had to put 10% down and we were able to lock into an interest rate 1% lower than what we were able to get now. And that was only about four months ago.

Because we intend to purchase more than one investment property, we realize that we’ll have to find another way to buy properties other than getting a conventional mortgage. Now I’ve been to various real estate trainings for different methods of purchasing real estate. I’ve taken trainings from different experts on short sales, subject to deals, foreclosures, etc. But I haven’t actually purchased a deal using any of these methods. Most of them, except for purchasing property “subject to,” require that you have some cash, which I won’t have after we close on this property. So my focus now is to purchase investment property without using my own cash and without bringing in other investors.

Even though I have taken courses on how to purchase property “subject to” the current mortgage, the method that I learned did not really work in my state so I abandoned this method before I even tried it. Then I heard a tele-training with Wendy Patton on lease options and subject to deals on I wanted to listen to the training because we intended to sell the property that we’re purchasing using a lease option, and I thought that was what this training was about. But it was actually about how to purchase properties using lease options and subject to deals without having to put any money down.

Wendy was awesome! I just had to have her training course that consisted of 4 separate real estate investing courses: Buying with Lease Options, Selling on Lease Options, Working with Realtors, and Taking the Deed Subject To. Wendy offered these 4 courses and personal coaching with her for under $1000. I jumped at the opportunity to purchase this because I had spent more than twice at much for just one of those courses from other real estate gurus. The good news is that if you act now you can still listen to Wendy’s free tele-training with, and get in on this special offer, but hurry because I don’t know how long this offer will last.

Monday, December 01, 2008

Tax Lien Lady’s Rant: Buyer Beware!

I’ve just yet another e-mail from a subscriber to my newsletter who tells me that they are very interested in my courses, but they’ve already spend a great deal of money with someone else’s coaching program. And since their investment is non-refundable, and it was a lot of money, they don’t want to buy any of my programs. And then they go on to ask me a very important question that they have about tax lien investing and they even give me their phone number just in case I would like to discuss their very important question with them.

I guess they were not able to get the answer to their question from the coach that they paid thousands of dollars to, so they figure that they’ll just ask me. The problem is that if I do answer them, they may not like the answer that I give them. I may be telling them the exact opposite of what they’ve been told by their so-called “expert” tax lien investing coach. I may not think that the strategy that they’ve paid thousands of dollars to learn is any good in today’s market at all.

OK, this is my rant. I’ve had enough, so I’m warning everyone who subscribes to my newsletter and reads my articles now, “Buyer Beware,” just because someone says that they’re an expert in tax lien investing doesn’t mean they are. Check them out before you hand over your credit card number and spend thousands of non-refundable dollars to buy their program. You can google the name of the company and see if anything negative about them comes up and you can ask to see some proof that they know what they are doing. How about asking to see a sample of their tax lien portfolio before you give them your hard earned money? Do they have experience in your state, or the state that you are going to invest in?

You should find out exactly what support you are going to get. If you’re paying a few hundred dollars, you should at least get unlimited e-mail support to have someone answer your questions, and some regular coaching sessions or classes. If you’re paying thousands of dollars, that should include phone support and one-on-one coaching as well, not just teleseminars where anyone can call in and ask a question.

Beware of anything that sounds too good to be true. Sometimes in their zeal to sell you their product, companies will make claims about tax lien investing that simply aren’t true. Here are a couple of the buzz words in the industry that really make me mad:

“Government guaranteed” – they throw around this term to make you think that you’re guaranteed to get paid on a tax lien, when in reality no one guarantees that you will be paid. That’s why it’s important to do your due diligence on tax sale properties.

“You can get the property” – this almost never happens with tax liens, and even if in a rare circumstance you did foreclose on a property, in most states it would take at least a couple of years before you can even start the foreclosure process.

“You don’t have to go to the tax sale, you can do this from your computer,” – this is partially true. Some counties do have online tax sales, but there are only 4 states that I know of that have counties with online sales. And that’s only some of the counties in those states, not all of them.

“You don’t have to bid at the tax sale, you can buy left-over liens from the county” – also only partially true, some counties do have left-over liens, but many of them don’t. If you are interested in left-over liens, you have to get the list right after the tax sale, as all of the good liens get picked over pretty quick and all that’s left is the junk. So if you think that you’re going to get properties that are ready for foreclosure and foreclose on them, this is only likely to work with junk properties (properties with no value because it’s unbuildable land).

O.K., I’ve had my rant and vented and hopefully I’ll save someone from making the same mistake that I see over and over again – paying thousands of dollars for a program that they are unhappy with, and that doesn’t help them go out and buy profitable tax liens. When you’re ready for a program that will really show you step-by-step what to do to start your own profitable tax lien portfolio, then check out the courses at My most expensive course is way under $1000 and I have many courses under $100. And even before you’re ready for one of my courses, you can read all of my articles for free at and check out my free Tax Lien Investing Tips podcast on iTunes.

Monday, November 24, 2008

Now is the Time to Act: Part II

This is the second article in a two part series about what I think are two really good opportunities right now to get involved in real estate investing. In the first article I talked about why I think that this is a real good time to get started in tax lien investing, and in this article I want to discus what I think is another good opportunity right now in real estate – buying property at an auction. If you missed Part I in this series you can read it at

If you have more cash available and can qualify for a mortgage, another great opportunity in today’s market is purchasing property at real estate auctions. In some states it’s common for homes to be sold at auction instead of being listed with a real estate agent. Typically this is done for estate sales, when the property has to be sold in order to pay off debts for an estate and distribute what is left to the heirs. Many times the heirs do not want to wait out the process of listing the property with a realtor, or they may have already tried that and were unable to sell the property and now the estate has to be closed, so they hire an auction company to sell the property to the highest bidder.

In good times when the real estate market is strong, auction prices can be quite high. But in times when the real estate market is weak and loans are harder to get, there are not as many bidders at these auctions. Many investors find themselves holding too many properties and not enough cash. It’s also harder for them to refinance and take cash out of the properties that they own for the purpose of investing. If you have the cash you can get some great buys. It’s just a matter of being at the right place at the right time, and being prepared.

Just a week ago we were able to purchase a property at a real estate auction for quite a bit less than it’s appraised value. We didn’t even expect to buy this property, but we went to the auction prepared to bid. I did my due diligence on this property and had a bank check made out to the auction company in the required amount for the down payment. The auction happened to be on a miserably cold and rainy day. There were quite a few people there for the personal property but when it came time to bid on the real estate, not many were there with the required funds. Since the bidding started at a price that was less than half of what I had determined the house was worth, we went ahead and bid. There was only one other person bidding against us and he stopped bidding well below what we had determined would be good price for the property, where we could make a very nice profit on a lease option. We wound up purchasing the property for $70,000 less than what we had determined as market price.

The upside of buying property this way is that you can get a great deal, the downside is that you do not get to control the deal at all. You purchase the house “as is” and cannot negotiate anything that might need to be fixed. There is no buyer’s disclosure letting you know about any problems that may be there. You need to do a thorough inspection of the property before you bid. But many times these homes are well taken care off and the auctioneers do provide times that you can inspect the property before the sale, usually a few days before the auction.

Another thing that may be a problem is that you sign a contract at the auction to purchase the property in a given time frame and there are no contingencies. If you can’t get a loan for the remainder of the purchase price in the time given, you could loose your down payment. One solution to this problem is to line up your financing ahead of time so that you are confident that you’ll be able to close on time.

Another thing that you may want to consider is that there are different types of auctions. Some auctions have a reserve price and some are absolute auctions. In a reserve auction, the property will not be sold unless a reserve (minimum) price is met. I’ve been at a real estate auction where the highest bidder did not get the property because the reserve price was not met. At an absolute auction there is no reserve price and the property is sold to the highest bidder. In my opinion your best chance to get a good deal is at an absolute action. The auction that we went to last week was an absolute auction; hence we were able to sign a contract to purchase the property at a very low price.

If this is something that you think you might want to pursue, start checking your local newspaper for estate auctions. Then go to a few sales and see how they are conducted. Go to sales from different auction companies to see how they are run. Some auction companies are better than others. Make sure that they will guarantee insurable title on the property that they are selling at auction. If you have difficulty finding any real estate auctions in your area, or in your state, and you still want to invest than send an e-mail to me at I believe that even better buys than the one that I got will be coming up in my area and I’m looking for investors to partner with.

Now is the Time to Act: Part I

Now is a great time to jump on money making opportunities in real estate and tax lien certificates. In economic downturns like we’re in right now, many investors run out of investment capital. They may have lost money in other investments – like the stock market or mutual funds, and have to pull back from investing in real estate, just when it’s the perfect time to buy. That means less competition and more opportunity for you. I’m seeing some great opportunities right now in tax lien investing and in purchasing real estate at auctions. In Part I of this series I’ll discuss why I think this is a perfect time to get started in tax lien investing and in Part II of this series I’ll talk about why real estate auctions are a great opportunity for investors that have more cash available.

Now is the time to go to tax sales. I just bought three new tax liens at a tax sale last week. All three were purchased at 18%. A couple weeks earlier I had purchased three liens as well, two at 10% and one at 18%. And I’ve been hearing from clients that have been successful at tax lien sales as well. Now this might not sound like much to you, but I invest in New Jersey, where the municipality conducts tax sales, not the county. This means that there are more tax sales, but fewer properties in each sale, and you have to attend a few tax sales just to put together a small portfolio of tax liens. It’s not like other areas of the country where there are county sales with hundreds, sometimes thousands of liens available. In many of the tax sales that I attend there are more bidders than there are properties in the sale. I’m seeing a change in that trend, where now there are less bidders showing up to the tax sales and more properties available. It’s a sign of the times.

When tax lien investors run out of money, they stop paying the subsequent taxes on their liens and those properties wind up in the tax sale the following year. I am finding that a couple of investors who used to be regulars at these sales are no longer there. They are not paying the subsequent taxes on the liens that they purchased last year, and they are not showing up at the tax sale to bid on them. I was able to pick up a lien at the last sale that I went to that was someone else’s prior lien. I was able to pay the subsequent taxes on that lien as well, and get the maximum interest rate on my subs (18%). Usually I don’t recommend purchasing tax lien certificates that have prior tax liens on them. But if the prior lien holder does not show up at the tax sale, then I will go ahead and purchase the lien if I’ve done my due diligence on the property. If the prior lien-holder does foreclose on the lien, your lien remains on the property (if they don’t redeem it) and you can foreclose as well when the redemption period on your lien is over.

If you’re not sure how to get started in tax lien investing, you can learn the basics with my Tax Lien Investing Basics home study course. This course will teach you the basics of tax lien investing and show you where to get the tax sale information. You can find out more at

Monday, November 17, 2008

Tax Deed Investing: A Better Way to Purchase Tax Delinquent Properties for Pennies on the Dollar, Part 3

This is the 3rd article in a series about Jack Bosch’s Land for Pennies system of buying tax delinquent properties for pennies on the dollar. In the first article I introduced you to Jack Bosch and told you about his background and in the second article I told you about his program and how it’s different from tax lien and tax deed investing. In this last part of the series I’ll give you a summary of the steps that Jack used to make a fortune buying and selling tax delinquent properties.

Step number one, to buying tax delinquent properties for pennies on the dollar, is to get the delinquent tax roll from the county tax collector. This is not the same as the delinquent property list that is published before the tax sale. This list is never published. This is the list that the tax collector uses to contact delinquent taxpayers in order to collect the taxes and to notify them of their delinquency. Sometimes they will make this list available to you (for a fee) and sometimes they will not even know what you are talking about. In Jack’s course he gives detailed information on how to get this list and what form you need to have it in. It doesn’t do you much good for example to get this list as a print out. You need it in a specific digital format.

Step number two, to buying tax delinquent properties for pennies on the dollar, is to filter this list so that you have just the properties that you want. Jack has a method for filtering the list to give him a greater response rate. He is looking for certain properties, so he filters the list to find the properties that he is looking for. In his Land Profits Formula he tells you just how to do that. Also you will need to un-duplicate the list. You may have multiple properties with the same owner and you only want to send one letter to each delinquent taxpayer on the list.

The third step in the process is to send out letters to each of the property owners on your list. Jack’s Land Profits Formula tells you exactly what to do. Jack even tells you what kind of paper and envelopes to use and how to address the envelopes to have a better chance of getting your letters read. He also tells you when the best time to mail them is. And he provides some different sample letters that have worked for him. Once you send out the letters, you just sit back and wait for people to call you about their properties.

Your fourth step is to take the information from your prospects when they call. Jack gives you forms and software for keeping tract of these calls in his program. He even gives you a script of exactly what to say to prospects when they call. There’s no thinking involved, you just follow Jack’s formula for success.

Your next step is to make an offer. You’re going to take a look at the information that you collected from the homeowner and verify it. You need to know what the property is worth. To do this you’ll need to know the assessment information. You’ll also want to do your own title search to make sure that there are no liens or judgments on the property which could cloud the title. Jack tells you how to do that in his Land Profits Formula. Then you’ll decide how much you want to pay for the property and send a written offer to the prospect. Once the offer is accepted you’ll complete a contract and close the deal. Jack provides some different contracts that you can use and discusses different ways to close the deal in his course.

I have simplified Jack’s program for you in this short article, he goes over everything in detail in his Land for Profits Formula. Find out more about Jack Bosch’s Land for Profits formula at .

Monday, November 10, 2008

Five Mistakes New Investors Make When Buying Tax Lien Certificates and Tax Deeds

Here are some mistakes that can lower your rate of return in your tax lien or tax deed portfolio. These are mistakes that I, or one of my clients, or another investor that I know, has made in the process of investing of tax liens or tax deeds. I’m sharing them with you so that you do not make the same mistakes that we did when we were just beginning to invest in tax lien certificates and/or tax deeds. Hopefully you can learn from our mistakes.

Mistake#1: Doing your due diligence too soon before the tax sale.

New investors are always eager to get started. They frequently want to start researching the tax sale properties right away, as soon as they can get the tax sale list. I also made this mistake when I first started; until I realized that I was wasting my time doing due diligence on properties that were never going to be sold at the tax sale. People can pay their taxes and remove their property from the tax sale list, sometime up until right before the tax sale. In my experience, at least half of the properties that are on the original tax sale list will not be there on the day of the sale. So if you start your due diligence early, many of the properties that you research will not be sold at the tax sale and you’ll be wasting your time. I’ve learned to wait until a few days before the tax sale and get an updated list from the tax collector, so that I’m only doing due diligence on the properties that are still on the list a couple of days before the tax sale. Of course if you’re going to a very large sale, you might need a week to do your due diligence, but you shouldn’t need longer than that.

Mistake #2: Not doing due diligence on tax sale properties.

For tax liens this may be as simple as looking at the assessment information on the property and driving by the property to take a look at it. I myself have made the error of bidding on a tax lien on the assessment information alone and not actually looking at the property. Last time I did this, I wound up with a shack that was falling apart, and it was right next to a stream. It looked like if the stream flooded it would be washed away. Because everything around it was overgrown and it was hard to see from the road, I had a real hard time finding it. But the problem was I didn’t go look at it until after I had bought the lien. I should have looked at it before I bid.

Mistake #3: Not knowing the rules of the tax sale.

Since every state, and in some states each county, has different rules regarding their tax sales, you need to know what they are ahead of time. I got an e-mail from a subscriber who had purchased a tax deed at an “upset” tax sale in Pennsylvania. Later he found out that there was a $200,000 mortgage on the property that he was responsible for. He didn’t do his due diligence on the property, so he didn’t know about the lien. He thought that he was buying a deed to vacant land and he didn’t know that a new home had been built on the property, and that there was a mortgage on it. So his first mistake was not doing the proper due diligence for a tax deed property.

But he also didn’t know that when you purchase a deed in the upset sale you are responsible for any liens or judgments on the property. Many counties in Pennsylvania have two different tax sales. The upset tax sale is held in the fall and the properties in that sale are sold subject to any liens or judgments on the property. Then if a property is not sold in this sale it goes to the judicial sale in the spring. The properties in the judicial sale are sold free and clear of any liens or judgments, so there is a big difference between purchasing a tax deed in the upset sale and purchasing a tax deed in the judicial sale. Know the rules of the tax sale that you are bidding at!

Mistake #4: Not knowing what you are bidding at the sale.

I was at a tax sale in New Jersey where a new investor was bidding on some small utility liens. In NJ the interest rate is bid down and then premium is bid on tax liens. She bid large premium (a few hundred dollars) on a small sewer lien, which she won. When I talked to her after the sale, I realized that she did not understand how premiums in NJ work. You do not get any interest on the premium or on the certificate amount. She was not aware that she was not going to get any interest on the amount that she bid at the sale.

The reason that other investors were bidding big premiums on larger liens is because once they have the lien, they can pay the subsequent taxes and get the maximum rate (18%) on their subs. With small sewer liens, like the one that she got, the subsequent taxes that you get to pay are small, usually no more than $500 per year and you only get 8% on the first $1500. Although she didn’t loose any money, she was going to make very little on this tax lien!

Mistake #5: Not starting foreclosure at the right time.

In some states you are only given a certain time frame where you have to foreclose the lien if it does not redeem, or you loose your investment. If you don’t start the foreclosure proceedings as soon as the redemption period is over, you could loose your lien. But in other states, where you don’t have to foreclose right away, you are better off letting your lien go longer for 2 reasons. The first reason is that 99% of the time, when you start the foreclosure process the lien will redeem. The second reason is that the longer you hold the lien and pay the subsequent taxes, the more money you will make. Of course this only works in states were you could pay the subsequent taxes and get interest on your subs.

Tuesday, September 30, 2008

Tax Deed Investing: A Better Way to Purchase Property for Pennies on the Dollar

This is the second article in a series about advanced strategies for buying tax delinquent properties. You can read the first article in the series at In my last article "Tax Deed Investing: Can You Still Get Property For Pennies on the Dollar," I introduced you to Jack Bosch and his Land For Pennies system of buying tax delinquent properties. In this article, I'd like to tell you a little more about Jack's method and explain how it's different from investing in tax lien certificates or tax deeds.

When you purchase a tax lien certificate you very rarely get the opportunity to foreclose on the property. On the very small percentage of liens that you might get to foreclose on, it can take years from the time you purchase the tax lien certificate to when you actually get the property. You have to purchase the lien, wait the redemption period, and then go through the foreclosure process. This can take 3 years, or even longer in some states. So tax lien investing is not a good way to get property for pennies on the dollar.

A better way to purchase properties for a fraction of market value is tax deed investing. But tax deed investing is getting very competitive. It is not uncommon in some states for properties to get bid up to 80% of market value at a tax deed sale. In most states, when you purchase a deed at a tax sale, you do not get clear title. You have to then go and clear the title before you can sell the property to someone else. This takes more of you time and money, reducing your profit in your investment.

There are a lot of advantages to using the Jack Bosch's Land for Pennies system of buying tax delinquent properties over investing in tax deeds or liens. With his system, you don't even go to the tax sale, so you avoid a lot of the competition. You purchase the property from the property owner before it ever goes into the sale. By focusing on land in more rural areas, you can further reduce your competition. Since you are purchasing the property directly from the owner, you get clear title to the property and can sell it fast for quick profit. And you can even get these properties at a lower price than if you you had to bid on them at the tax sale.

This Land for Pennies system is a way that you can purchase tax delinquent properties for pennies on dollar without going to the tax sale, with minimal competition from other investors, and get clear title to the property. Tune into the next article in this series to learn about Jack's steps for success. You can find out more about Jack's Land for Pennies system and his new Land Profits Formula on my podcast blog at

Sunday, September 14, 2008

Tax Deed Investing: Can You Still Get Properties For Pennies on the Dollar?

I’ve been investing in tax lien certificates for a while now – since 2002, and I’ve been fairly successful at it. I now invest in 2 different tax lien states, and this past year I’ve started investing with money in my self-directed IRA. In spite of what you may have seen on a late night infomercial, tax lien investing is not a good way to obtain property.

In my experience, when you purchase a tax lien certificate on a good property, it almost always redeems. I’ve purchased hundreds of liens and have never actually got a property through foreclosure. But I have always wanted to own investment real estate. I believe that the buy and hold strategy of real estate investing is the fastest way to wealth, but I could never get myself to sign my life away and put a whole bunch of money down on an investment property. So three years ago when my husband and I moved our family to the Commonwealth of Pennsylvania, I dabbled in investing in tax deeds.

At first I thought that tax deed investing was a good way to get property for pennies on the dollar. I saw that it was possible to buy vacant land for as little as a couple of hundred dollars – less than I pay for most of my tax liens in New Jersey. But then you have to pay the realty transfer tax (2% of the value of the property in PA), and you have to pay the auctioneers fee (2% of the bid price), and the recording fee. On top of that you need to clear the title to the property (in PA that’s a minimum charge of $750 if all goes well). So now your $200 property has cost you about $2000, but you still have to pay the taxes and since most property in my area exists in communities, you may also have to pay a hefty association fee. For one of my lots that I purchased at a tax sale I pay over $800 a year to the homeowners association. That’s twice what I pay for taxes – and I don’t have a home, just a lot.

After all this you still may not be able to sell the property. Only a couple of developments here in the Pocono Mountain region are hooked up to city water and sewer treatment systems. Most of the properties have wells and septic systems, and there are strictly enforced state regulations regarding how far your well has to be from any septic system. This alone limits if and where you can build. If the property doesn’t pass a perk test – which can cost more than $1000, then for all practical purposes it is un-buildable and almost impossible to sell.

Now before you start thinking “Why didn’t you just purchase a property with a house on it instead of vacant land,” there’s something that you need to know about tax deed sales. Tax sales can be extremely competitive and anything with a house on it is going to bid up to 80% or more of its value. So when you see a picture on a late night infomercial, or anywhere else, of a cute house that somebody bought at a tax sale for a couple of hundred dollars, ask to speak to the person who actually purchased it and get the full story. In my experience and in my neck of the woods, it just doesn’t happen that way. But don’t take my word for it. If you live in a tax deed state, go to a tax sale and check it out for yourself.

After realizing that purchasing property at a tax deed sale was not the best way to get property, I kept looking for a way to purchase property at a fraction of its real value. One day, quite by accident I found what I had been looking for. I stumbled across a gentleman – a German immigrant by the name of Jack Bosch, who has perfected a system for buying tax delinquent properties for pennies on the dollar – without even going to the tax sale.

Jack had left a post on one of my blogs, and with that he left a link to his website. I went to his website to check it out and I was impressed by what I found. Jack had developed a system for contacting delinquent taxpayers – months, or years before their property would be in a tax sale. He had a method for finding the delinquent property owners who wanted to get rid of their property and would make them a very low offer. In the last few years, he has done over 5000 of these property transactions, and has become a millionaire in the process.

In part two of this series I’ll tell you more about Jack’s, Land for Pennies system. In the meantime if you’d like to find out more about Jack Bosch and how he got started you can listen to podcast #19 on my podcast blog at Look for the sequel to this article, Advanced Strategies for Buying Tax Delinquent Properties, for more about Jack’s Land for Pennies system.

Monday, July 07, 2008

I'm in Training

I recently came home from an intensive 2-day training in Columbus Ohio. My husband and I attended Lou Brown’s Street Smart* Millionaire Jump Start training course. It was a full 2-day event; jam-packed with information on how to start a successful real estate investment business. If you’ve been a subscriber to my web site,, for a while, then you know that I have always been interested in real estate investing for passive income. Although I have a nice tax lien portfolio, my husband and I are looking for ways to invest in real estate for consistent income so that he can quit his job.

Of all the real estate investing seminars that I have been to, and programs that I have purchased, Lou Brown’s Street Smart* system provided me with the most useful information and tools in order to finally get in the game. I found that Lou provides his students with the best prices for state of the art technical tools for the serious real estate investor. Tools like Prop Stream, a web-based, multi-tasking software program that can find foreclosures and pre-foreclosures in any city in the US, get comparables on properties, calculate closing costs, and more. It even has a mortgage accelerator, to help you pay off your mortgage quicker. And the best part about it is that you get a 30-day guarantee to try out the system and make sure that it works in your area.

What made this training event even more valuable was the free coaching sessions with certified lifestyle and business coaches. We met privately with a business coach who helped us put together our business plan. When we left the Millionaire Jump Start training we left with our own business plan that was tailored to our needs and our goals. We already had purchased Lou Brown’s Whole Enchilada Jr. (the first 5 books and CDs in his Street Smart investing program), and now we have a road map to get from where we are now to where we want to be!

I found this program to be the best that I have purchased yet. I say that not only because the Street Smart* program takes you step-by-step through buying real estate, negotiation deals, and selling properties for the most profit. But it also contains all of the forms that you need for every step, including contracts, deeds, and affidavits. It’s like having your own lawyer in a box! But it doesn’t stop there; it also goes into asset protection and trusts, including land trusts and personal property trusts. And this program provides all of the paper work that you need to write your own trusts agreements.

Lou Brown’s Street Smart* Real Estate Investing program is not your typical real estate investor training. Lou teaches his students how to purchase property “subject to” the existing mortgage, something that many investors think is not possible in today’s market. The biggest “Ah-haa” that I took away from this training is that with the Street Smart* way of buying properties, sellers would even pay me to take their house. How would you like to find a seller willing to pay you to take their property?

Street Smart is a registered trademark of Trust Associates and Louis D. Brown. You can find out more about the Street Smart Real Estate Investor training at You can get a free online demo of Prop Stream real estate software at Make sure you tell them that you heard about it from Joanne Musa, the Tax Lien Lady.

Sunday, April 27, 2008

Now is the Time for Short Sales

By Joanne Musa and Carl Williams

It's no secret that we are in a slumping economy. All you have to do is read the headlines. For the average person without many other options outside of their current job, these times can be difficult. According to an article in on March 13, home defaults and foreclosures rose 60% nationwide in February of this year. Leading in foreclosures were Nevada, California and Florida, and February was the 26th consecutive month of foreclosure increases. Recently in my own local paper there was an article about the increased number of animals for adoption due do families being forced from their homes by foreclosure.

Yet there are a select few people who have chosen to take advantage of the fact that lenders are working directly with investors like you and I by accepting huge discounts on active mortgages just so the property does not have to go into foreclosure. You can actually help people that are loosing their homes to foreclosure by negotiating with the bank. In this way you can help homeowners that can’t afford to stay in their home avoid foreclosure and possibly save their credit, thus making it easier for them to get into another home or rental that they can better afford. That means that you can find a property today with no equity, negotiate a lower payoff, and literally turn a profit overnight just by understanding how to do a short sale. What this means for you is that there is no better time for you to start doing short sales than now. When home prices were continuing to rise, banks did not want to deal with investors. They would just list foreclosed properties with a realtor and most likely make all their money back and then some. But now the tables have turned. They are not likely to sell foreclosed properties and break even, much less make a profit. So they are willing to make deals, and they have a large inventory of properties that are in default.

So how do you do it? How do you find these deals and negotiate short sales with the bank? I’ve found an excellent and affordable course that explains the whole process. You can find out all about it at

It not enough to just have a desire to become a real estate investor, you need to find a niche based on the current market conditions. And this is the PRIME OPPORTUNITY to do short sales.

A few years ago the amount of U.S. foreclosures were nowhere near what they are today. A vast majority of homeowners owned a great home with growing equity. Not to mention a mortgage payment that was comfortable. Homeowners and investors alike were able to enjoy the fruits from a thriving real estate market.

Fast-forward to 2008 and the tables have turned. Mortgage payments have ballooned, interest rates have skyrocketed, and that thriving real estate market has literally disappeared overnight, unless you are looking at the market through the eyes of a well-trained short sale investor. Do yourself a favour and take this opportunity to learnstep-by-step how you can locate and close your first short sale in less than 45 days.Even if you decide that short sales are not for you the fact that you have a no questions asked money back guarantee makes it totally risk free. Don't miss out! Go to –

Happy and Prosperous Investing,


Wednesday, April 09, 2008

Tax Lien Investing FAQs

Recently I sent an e-mail out to my subscribers asking them some questions to find out what it is that most people want to know about tax lien investing. I got a lot of good questions and I won’t be able to answer them all in this article, but I want to try to answer those that were asked most often that weren’t answered in my new free video course.

I especially like to answer questions that start out with the words “How do I…” or “How can I...” This type of questions shows me that someone is really interested and is ready to take action. So lets answer some of these types of questions that are not answered in my video series. So here are some frequently asked questions about tax lien investing.

Q1: How can I buy tax liens or tax deeds without going to the auction?

A: In most states you have to attend the auction in order to bid, or have a representative there to bid on your behalf. But there are 2 ways that you can purchase a tax lien or deed without physically going to the sale. A few states do have online auctions, but not all counties in these states conduct their auctions online. Usually just the larger counties do. Many counties in Florida, California, and Arizona have online tax sales. And I know that some counties in Colorado and Illinois have online tax sales as well. Another way that investors have bought tax lien and tax deeds without going to the sale, is to bid on left-over liens, this can usually be done through the mail. The only problem is that as tax lien and tax deed investing become more popular, there are less and less good properties left-over after the tax sale.

Q2: I don’t live in the US, can I still invest in Tax Liens or Tax Deeds?

A: Yes, in most states you can invest in tax liens and tax deeds even if you are not a US citizen and do not live in the US. There are a couple of states that you have to be a resident of the state to invest, but these are not the most popular tax lien states and they don’t have online sales. All you have to do in order to purchase a tax lien is to fill out a tax form called a W-8BEN form. In order to complete this form you will also need to apply for an Individual Tax Identification Number (ITIN) if you are bidding in your own name. If you are bidding using a business name, you must apply for a Employer Identification Number (EIN). This is only for tax liens. You do not have to do this to participate in a tax deed sale.

Q3: So how much money do you need to get started with tax lien investing?

A: The beauty of tax lien investing as opposed to tax deed investing and other types of real estate investing, you can start with a very small investment. The first very profitable tax lien that I purchased started with an initial investment of only a couple of hundred dollars, on a small sewer lien. Then I was able to pay the subsequent sewer taxes the next couple of years and instead of trying to foreclose I just kept paying the subsequent taxes. After a couple of years, the homeowner moved out of state and stopped paying the taxes on the property, so then I got to pay even bigger payments $5000 over the next couple of years. The lien finally redeemed and I collected 18% per annum on most of my investment plus penalties.

Q4: How often do you acquire the property with tax liens?

A: In the state of NJ where I invest, very, very seldom do you get to foreclose on the property. If you are interested in owning property than tax deed investing or redeemable tax deed investing is the way to go. Only about 1% of tax liens will not redeem and of those properties, once you start the foreclosure process about 80% will redeem sometime during the foreclosure process. I’ve been investing for about 6 or seven years and I haven’t foreclosed on a property yet. I do have a couple of liens that I could start foreclosure on right now, but I know that when I do, they will redeem, so I just let them go.

I know some investor who have foreclosed on a couple of properties, but either it is not recent – we’re talking a few years ago when property values were not what they are today and it was much harder to get a loan, or they have a really huge portfolio with thousands of liens.

Q6: Are there risks involved in this type of investing? What are they?

A: Yes, there are risks involved and that’s what the gurus leave out, they make it sound so easy. They like to use the term “Government Guaranteed” to make people think that they can’t go wrong with tax lien investing, that the government guarantees that they’ll get paid on a tax lien. That’s really not true, what they mean by “government Guaranteed” is that there are laws that protect the investor but you not guaranteed to get paid. The guarantee is the property. Tax Liens are guaranteed by the property that you have a lien on, so if you buy a tax lien on a worthless piece of property, then you made a poor investment and it is possible that you could loose your money. Yes, there is risk involved, but that risk is minimized by doing your due diligence on the property before you purchase the lien, just like you would do due diligence on property before giving someone a loan against it. If you do your due diligence properly than tax lien investing is a very safe investment because it’s secured by something tangible, not just a piece of paper.

One of the things that I do in my courses, John, is teach people how to do due diligence for tax sale properties so that they can totally reduce the risk involved with tax lien investing.

Q7: Can you invest in tax liens and tax deeds in your IRA?

A: We all want to keep more of those profits for ourselves and not give half of it away to Uncle Sam. The good news is that you can use money in your IRA or Roth IRA to invest in tax lien certificates or tax deeds, but only if it’s a true self-directed IRA. With a self-directed IRA, your profits can grow tax-differed, and with a Roth IRA, your profits can be totally tax-free.
In my courses I have 2 audios from different experts from 2 different self-directed IRA companies that explain how to do this.

Tuesday, February 26, 2008

Invest in Tax Lien Certificates and Tax Deeds Tax Free

Did you know that you could use money from a self-directed IRA account to invest in tax lien certificates or tax deeds? I’ve interviewed retirement account specialists from two different self-directed IRA companies; EntrustCAMA and Equity Trust Company, and I’ve learned that it is possible to invest tax free in tax lien certificates and tax deeds with a self-directed IRA.

If you use money from a regular self-directed IRA account to invest in tax lien certificates or tax deeds, than your money grows tax free until you withdraw from your account after retirement. But, if you use money from a Roth self-directed IRA, and you do not take any withdrawals until retirement age – you do not pay any taxes on your profits! So if you are using tax lien or tax deed investing as a way to save for your retirement, you need to look into this.

Although many brokerages will say that they have self-directed IRA accounts, they are not true self-directed accounts. You can only invest in anything that they sell. A true self-directed retirement account will allow you to invest in anything that is not prohibited by law. Allowable investments include real estate, tax lien certificates, tax deeds, and notes, along with other of the more usual investments. True self-directed IRA companies are prohibited to sell you investments. They can recommend types of investments that you can use your self-directed IRA for and show you how to do the paper work for them, but they are not allowed to make a commission on what you buy. There are only a handful of these companies in the country. I personally only know of three of them and I’m familiar with only two. I’ll tell you how to find out more about these two companies later.

You might be wondering if you can transfer or “roll-over” money from your present 401k or IRA into a self-directed IRA with one of these companies. What I’ve been told from retirement account specialists is that you can only roll over money from your 401k if you are no longer working for the company that your retirement account was set up with. I know that you can roll over money from a regular IRA account into a self-directed IRA because I’ve recently done that. I took money from my IRA account with TDAmeritrade and rolled it over into a new self-directed IRA account with EntrustCAMA. It was easy to do. I was able to transfer the money when I opened my new account. I downloaded the forms that I needed from their web site and mailed them in. They took care of the rest.

You also might be wondering if there are any fees associated with opening and maintaining a self-directed IRA. Yes there are some fees, but they are minimal compared to the taxes that you would be paying the government on your investment income or capital gains. Each of these companies handle fees differently and in order to see which company would work better for you, I suggest that you visit their web site or talk to a representative.
You can find out more about EntrustCama at and you can listen to a free teleseminar/interview with Carl Fischer of EntrustCAMA at You can find out more about Equity Trust Company at and you can listen to a free teleseminar/interview Liz Koos of Equity Trust Company at

Tuesday, February 05, 2008

Tax Liens Vs. Tax Deeds: Which is the Best Investment?

Frequently I’m asked the question what is more profitable, investing in tax lien certificates or tax deeds. Whether tax lien investing or tax deed investing is better for you depends on the state that you live in and your what your goals are. If you are looking to pick up property under market value than you are better of with tax deeds than with tax liens. If you do your homework and purchase tax liens on good properties, the chances of foreclosure are slim. And in some states, even if the lien is not redeemed, you may not be able to get the property.

In the State of Florida for example, if your lien does not redeem during the redemption period, the property goes into a tax deed sale in order to satisfy your lien. If you did your due diligence and purchased a lien on a decent property, in order to get the property, you will have to bid against other investors at the deed sale. So if you want to invest in Florida, and you are interested in obtaining property, then deed investing is the way to go, not lien investing. If, however, you are not interested in owning property, but just want to get a higher return on your money than you could in the bank, then tax liens are the way to go. In Florida, as long as you do your due diligence, you won’t have to worry about the possibility of owning the property.

If you live on the west cost, you might want to consider investing in tax deeds instead of tax liens. That’s because the states on the west cost are deed states and not lien states. Yes, you could travel to the closest lien state, but that would eat into your profits. And yes, you could invest online but then you have to deal with increased competition and higher costs. Also, would you purchase a property that you did not physically look at first? Even though with tax lien investing, you are not purchasing the property, you’re only buying a lien on the property; your lien is only as good as the property that guarantees it.

If you are interested in either owning the property or getting a very good return on your investment and you live in or near a redeemable deed state, than you should consider investing in redeemable deeds. Redeemable deeds are kind of in-between tax liens and tax deeds. You purchase the tax deed at the sale, but there is a redemption period in which the previous owner can come back and redeem the deed from you. They have to pay a pretty hefty penalty in most redeemable deed states in order to do so, and the penalty is on the total amount that you bid at the sale. In Texas the penalty is 25% and in Georgia it’s 20%. Not a bad rate of return! Another great thing about redeemable deeds is that the larger counties with bigger cities can have a tax sale a few times a year or even every month. That’s better than waiting for a tax sale only once a year sale as in most states that sell regular tax deeds or tax liens.

If you live in a state that sells tax liens, and you are not interested in purchasing property, but are interested in investing your money safely at a high rate of return, than tax lien investing is the best choice for you. To find out more about tax lien and tax deed investing, go to

Thursday, January 10, 2008

Why do I Invest in Tax Lien Certificates?

Sometimes I’m asked the question, “Joanne, why do you invest in tax lien certificates?" I have a one word answer to this question.


There is no other investment I know of, that gives me such a high rate of return with the degree of security that I have with tax liens. Tax Lien Investing offers other advantages that I like as well.
  1. Consistent Return. Regardless of what of what the stock market does or what the housing market does, you get the same high return on your investment. Your interest rate does not go up and down with the market.
  2. Low Initial Investment. Unlike other real estate investments, you don’t need tens of thousands of dollars to get started. You can purchase your first tax lien for under $1000.
  3. No Liability. Unlike other types of real estate investing, there is no liability with a tax lien. When you purchase a tax lien, you are not purchasing the property and you don’t have any liability for it. You don’t need property insurance.
  4. No Brokerage Fees. Unlike investing in the stock market or other types of securities, you don’t need a broker to purchase a tax lien. There are other costs, like recording the lien with the county clerk, but this paid back to you when the lien redeems.
  5. Higher Interest Rates. Rates on tax lien certificates are higher than you can get with other safe investments, like a money market account at a bank or a CD.
  6. Tax Free Investing. You can legally avoid paying taxes if you invest through a self-directed IRA. If you use a self-directed Roth IRA, your profits can be totally tax free.
  7. First Position. In most states a tax lien takes first position over other liens. That means that if the lien doesn’t get redeemed and it goes to foreclosure (which doesn’t happen
    very often), you are first to get paid.

Think about it, we all a better place to put our hard earned money, to make it work harder for us. The stock market does not have a very good track record. And right now the real estate market in a lot of states is taking a licking. But if you have a tax lien on a property, it doesn’t matter if the value of the property goes down, the tax lien still makes the same interest rate that you got at the tax sale.

As long as I buy tax liens on good properties, in good areas, and get great interest rates, the return on my investment will help me live a very comfortable life and meet my financial

Why not start building your own profitable tax lien portfolio today, one tax lien at a time, and start saving for your future. Click here to find out how you can get started:

Happy and Prosperous Investing,