Tax Lien Investing

States With the Highest Return on Tax Liens

2010-05-13T21:28:00.001-04:00

Change: Posting to Tax Lien Investing Tips Blog

2009-04-21T11:55:00.004-04:00

All new articles will be posted to my Tax Lien Investing Tips blog at http://TaxLienInvestingTips.com.
I am combining my articles with my audios, videos, and anything else I can think of. The articles already here will stay here. So keep this blog site taged for reference, but make sure and note the new site for current,updated information. Look to http://TaxLienInvestingTips.com for continuing assistance with tax liens, tax deeds, and new strategies on investing in real estate.

Happy and Prosperous Investing,

Joanne Musa

April 2009 Q & A Webinar

2009-04-09T20:50:00.003-04:00

The April 2009 Q & A Webinar is now posted on the Members Area of TaxLienLady.com. In this webinar I answer some questions about deed sales in California and in Pennsylvania, and I talk about what you can expect from tax lien and tax deed investing. It may not be what you think!

I've also posted a bonus video to show you how you can use Bid4Assets.com to find out about California online tax sales, including how to register to bid at the sale, and how to get the tax sale list.

If you're already a member of TaxLienLady.com's Members Area, just go to www.taxlienlady.com/membersarea and put in your name and password. Then click on the teleseminars link on the left side bar to go to the page with all of the recorded webinars and teleseminars. The April call will be at the top of the page.

If you haven't yet taken advantage of the 30 day free trial to the members area, you can do so at http://budurl.com/30daytrial.

Many California counties have online tax sales, and many of them are in April, May and June. So don't miss out, get your free 30 day trial and listen to the replay of April's webinar and the bonus video to find out how you can start bidding on California tax deeds. Go to http://budurl.com/30daytrial.

Update to Tax Lien Investing Book Review: New Edition of The 16% Solution

2009-04-02T14:31:00.001-04:00

Just after I wrote a review of three of my favorite books about tax lien investing, I got a call asking me if I’d like to review a brand new edition of one of them. A second edition of The 16% Solution, by Joel S. Moskowitz, is now in bookstores and I’ve just finished reading it. It’s been a while (more than 6 years) since I read the original version of this book – which was somewhat outdated then, so I wasn’t sure just how different the second edition would be from the first.

I was pleasantly surprised! With all of the hype and recent infomercials lately touting tax lien investing as a way to get rich quick, this book is very refreshing. Right from the beginning Mr. Moskowitz sets the reader straight, giving honest and straightforward information. I was really impressed with the forward to this second edition where he likened the chances of someone getting a property for pennies on the dollar from a tax lien to someone winning one million dollars from a one-dollar lottery ticket. Yeah it happens every now and then, but it’s not likely. And then he tells you what you can expect from tax lien investing – “super-high interest combined with safety.”

This book is divided into four sections. In the first section Mr. Moskowitz explains what tax liens are, why they are such a safe investment, and why now, more than ever before you need to include them in your investment plan. At the end of the section he has a chart that shows how tax lien certificates compare to other investments in terms of income and growth potential, risk avoidance, safety, and liquidity.

Section 2 talks about how to buy tax lien certificates; how to choose a state and county to invest in and how to choose the properties to buy tax liens on. It also covers bidding at the auction and buying over-the-counter and assignment liens. There is even a chapter on how to get local officials to help you do your due diligence (This doesn’t always work in every county, but it’s certainly worth a try).

Section 3 of The 16% Solution talks about how you get paid on a tax lien certificate and how to foreclose on the property. Mr. Moskowitz explains how a tax lien certificate is redeemed, how to foreclose on a tax lien, and what to do with the property once you foreclose on it. Section 4 talks about avoiding and managing risks. Mr. Moskowitz explains just what the risks of tax lien investing are and how to avoid them. That’s something that most tax lien investing “gurus” never tell you until you give them thousands of dollars for coaching. I recommend that anyone interested in tax lien investing read this book for this section alone. Buy this book and save your thousands for investing in tax liens!

Also included in the book are a couple of appendixes with helpful information. In Appendix I there is a chart of state laws for all of the tax lien states. Georgia is included even though it’s technically a redeemable deed state. This chart is a good tool, but remember, just because a state has laws that allow it to have tax lien sales doesn’t mean that they actually have any. There are at least a couple of states on this list that either have only a couple of counties or municipalities that have tax lien sales, or have hardly any properties available in their sales.

Appendix II has some more detailed information for 14 of the tax lien states (these are the states that have an interest rate of 16% or higher). Some of these states are covered more thoroughly than others. My guess is that the states that are covered well are the ones that Mr. Moskowitz personally invests in. The states that are covered thoroughly are: Arizona, Colorado, Florida, Georgia, and Iowa. Detailed information on the other states is lacking. If you are investing in one of the above-mentioned states or planning to invest in one of these states I recommend that you purchase this book. Also if you are planning to invest in tax liens on commercial or industrial properties there are helpful forms for avoiding environmental problems in Appendix III.

This book is great for beginner investors in tax liens, it does not have information about tax deed investing, but it does have detailed information for 4 of the more popular tax lien states, and one redeemable deed state, plus general information for the other tax lien states. It also discusses investing online and purchasing leftover liens. You can purchase this book at a discount on Amazon at http://budurl.com/vdns.

Tax Deed Investing on Steroids Part 2

2009-03-29T13:42:00.001-04:00

In Part 1 of this series on tax deed investing, I introduced you to a strategy for cashing in on tax deeds without even going to the tax sale. In this article I’d like to answer some questions that you may have about the excess proceeds strategy that I introduced you to in Part 1. About a year ago, I did a very informative teleseminar interview with tax deed and real estate investing expert Cody Matousek. Cody divulged the “little known secret” of tax deed investing know as “excess proceeds.”

This seminar entitled “Cashing in on Tax Deeds Without Going to the Sale,” was the most popular teleseminar that I had by far. In fact we had over 200 people sign up for this call! Everyone was so excited about this little known method for making money on Tax Deed properties – without actually owning the property, at least, not for very long, that I got a lot of questions as well as some great testimonials regarding the teleseminar with Cody. Following are the answers to some of the frequently asked questions that we got about this seminar. You can find out more about this “secret” investing strategy at www.TaxForeclosureFortunes.com

Q1: How does it affect your credit if you buy a tax delinquent property and then let it go to tax sale (i.e. you don’t satisfy the delinquent taxes on the property)?

A: This depends on the state and county. Remember that the excess proceeds strategy does not work in every state. In most states property tax delinquencies, and foreclosures, are not reported to the credit bureaus. The counties simply to not have the wherewithal to report hundreds or thousands of delinquent property owners every year. You may want to check this out before you use this strategy. Just call the county tax collector and ask what happens if you’re delinquent with your taxes and your property is sold in a tax sale – do they report it to a credit bureau?

Letting a property that you own go to tax sale may affect your ability to purchase any other properties in that sale, however. In most tax deed sales, you have to sign an affidavit stating that you do not owe any property taxes in that county when you purchase a tax deed at the sale.

Q2: What about liens and judgments on tax delinquent properties? If you purchase a property before the sale from the owner, are you responsible for them?

A: Yes, you are responsible for any liens or judgments on a property that you purchase from the owner before the tax sale. If there is a mortgage on the property, for example, and you purchase it from the owner before the sale, you can be held responsible to pay that mortgage. You should do a title search on a property before you purchase it and stay away from properties that have mortgages or other liens on them.

Q3: How do you do a title search on a tax delinquent property? Do you have to hire a title company and get title insurance?

A: Although you should do a title search to find out if there are any liens or encumbrances on the property, you do not necessarily need to pay a title company to do this for you. Since you do not intend to hold on to the property and sell it, you do not need title insurance. You can either hire a title abstractor (these are the people who actually do the work for the title company) to search the title for you, or you can do it yourself. You search the title by going to the county Hall of Records (or where-ever the records are kept) and searching on the name of the owner or owners of the property. Any liens or judgments recorded in their name would attach to the property that they own.

Q4: Why would a person practically give their property away to someone they don’t even know?

A: Great question, and if this didn’t happen than this whole system of buying tax deed properties for pennies on the dollar – before the tax sale wouldn’t work. There are many reasons why someone would give you their property for little consideration. Remember you are looking for people that are just going to let their property go to tax sale anyway. They have already decided that they don’t want the property anymore, for whatever reason, and are willing to give it up. They don’t think (or they don’t know) that they can get anything for their property and you are going to offer them something for the trouble of signing over the deed. In many cases they have already left the property and it’s vacant, or they are living in another state and don’t want to be bothered with it anymore.

Q6: How do I find the owners of the property if county can’t find them to deliver the tax bill?

A: Look in the Tax Foreclosure Fortunes Manual for some links to free sites where you can look up hard to find people. There is also a reference to low cost service that you can pay for if the free sites don’t work.

Q7: Which states can I do this in?

A: Only deed states that award the excess proceeds to the owner of record of the property at the time of the tax sale. Keep in mind that you have be the owner of record at the time of the sale, which means that the deed needs to be recorded a couple of weeks before the tax sale. This can be difficult if the tax sale list is not published until 4 weeks before the tax sale. Another way to do this more efficiently is to use the delinquent tax role instead of the tax sale list. You can get the delinquent tax role at any time – not just before the tax sale, but you may have to pay the county to get it. Also you need to contact the right person to get this list.

Q8: How do I get the excess proceeds once the property is sold at the tax sale?

A: Some states will notify you of the excess proceeds and tell you what you have to do to collect it. In other states you may have to request the excess proceeds. It is helpful if you talk to someone at the county tax office before using this method of investing to find out what happens to the excess proceeds and what the owner of a property needs to do in order to collect them.

Q9: Can the owner of record on a tax delinquent property collect the excess proceeds even if there is a mortgage or lien on the property?

A: Each state handles this differently. Some states will notify the owner and all the lien holders of the excess proceeds. Some states give the lien holders the first right to the excess proceeds, and then if it isn’t claimed in a certain amount of time the owner can request it. Other states will give the owner the first right to the excess proceeds. Again, you can check with the tax collectors office before you use this strategy in any given state to find out what the rules are. You can also do your due diligence a head of time to make sure that there are no mortgages or liens on the property before you purchase it from the owner.

California Tax Deed Sales

2009-03-23T13:54:00.001-04:00

I recently received an e-mail from a subscriber in California. He had paid to get a tax sale list for one of the counties in California. He got the list from the county, but it came too late for him to do his due diligence on any of the properties in the tax sale. His question to me was “where can I get the tax sale lists in time to do due diligence.” I happened to get his question as I was getting ready to go to San Francisco for personal reasons, but since I knew that there were a couple of tax sales coming up in that area, I decided to check out a couple of the California deed sales myself. In this article I’m going to let you in on the tools that I used to find out about tax sales in California.

First of all for those of you who are not familiar with tax sales in California, California is a deed state and many counties have online sales. Most of the online sales in California are conducted by Bid4Assets. You can sign up for free at www.Bid4Assets.com to get notified of upcoming online tax sales. Many of these tax sales do require that you put down a large deposit ($5000) in order to bid, but they do give you access to the list of properties even if you are not a registered bidder.

Some counties do a great job of providing the list of properties in the sale and property information, and some counties do not. The information given can vary greatly by county. Some counties will only provide the tax number of the property, a legal description, (which is impossible to decipher unless you’re a surveyor), and the minimum bid amount. Other counties will give you the address of the property and tell you what type of property it is and even tell you about any other liens, thus saving you a lot of time in doing your due diligence. Some counties will even provide pictures of the properties.

So what do you do when you find that the list only has minimal information and does not even give you the property address? There are two things that you can do when you find that the list that you get for free online does not supply all the information that you need. The first option is free, but will cost you your time, and is a bit tedious. Usually there is a link provided on the Bid4Assets web site to look up the assessment information. But you have to type the property ID number in for each property on the list and look each one up separately, and then transfer the information to a spreadsheet in order to keep track of it. I tried this for one of the counties and gave up after it took me an hour to research about 15 properties.

The second option will cost you some money but save you a lot of time. You can go to www.TaxSaleLists.com and purchase a detailed list, which most of the time will have all the information you need for the tax sale properties. There is one more option that I haven’t tried yet, but it may work for tax sales that are not held online. You could call the County Treasurer and ask if they have the information available either online or on a CD, and ask them if it includes the property owner’s name, and the address of the property. Those are the most important thinks that you need in order to do your due diligence.

Investing in Tax Liens: What if I’m in a Deed State?

2009-03-23T13:46:00.004-04:00

Frequently I get asked this question: “I really want to start investing in tax liens, but I live in a deed state. Should I look into investing in tax liens in another state, or try to invest in tax deeds in my own state.” In this article I’ll give you what I recommend for investors want to invest in tax liens, but find that in their state they only sell tax deeds. It’s not a one-size fits all answer, it really depends on what your goals are and on your particular state.

You really have two options, either find a way to invest profitably in your state, or look at some of the online tax lien sales, you may even want to do both. First, find out what goes on in your state. Are there many deed sales? How often are the tax sales? How many properties are available and how competitive are they? You will actually have to go to some tax sales and see what they are like.

Some states just don’t have very much available, if that’s the case, you may want to try the online tax lien sales. Other states may be very competitive and properties may get bid close to market value. If that’s the case there is still a way that you may be able to profit from tax deed sales in your state. Some counties give the excess proceeds – that’s the amount that’s bid in excess of the minimum bid amount, back to the owner of the property.

Here’s how the excess proceeds strategy works in a nutshell. Instead of waiting for the tax sale you contact the owner of the property before the sale and see if they are going to let their property go for back taxes. If they have already decided to walk away from the property, perhaps they would be willing to give you a quitclaim deed to their property for a small fee. You record the deed with the county clerk a few weeks before the tax sale. Let the property go tax sale and after it is sold you apply for the excess proceeds.

This strategy only works in a few deed states that give the excess proceeds back to the owner of the property – not all deed states do this. So before you try this strategy check with the county tax collector or county treasurer and make sure that the owner of record of the tax delinquent property can apply for the excess proceeds from the sale. Also you do have to check for any other liens, since you are buying the property from the owner and not purchasing the deed at the tax sale, you will be held responsible for any other liens on the property.

Tax Lien Investing: How I Got Started

2009-03-13T11:49:00.002-04:00

Nine years ago my husband and I sold our 2 bedroom condo thinking that we were going to rent for a while until we were able to find a three bedroom home for our growing family (we had three young boys). We were unable to find a place to rent or buy in the county that we lived in. We moved almost an hour away to a small 2 bedroom apartment in the town that I grew up in. The housing market was just starting to take off and for the next 4 years we looked for a home that we could afford in three different counties in NJ and were unsuccessful.

Because we couldn’t find a house to buy that we wanted to live in, we decided that we would look into purchasing real estate for an investment. The problem was that rents had not rose at the same rate as selling prices of houses, so if you had to purchase an investment property and get financing, the rent that you collected would not be able to cover the mortgage payments. Still I thought that real estate investing was the fastest way to build wealth. So I thought that we should try buying foreclosed houses or pre-foreclosures.

The real estate market was booming at this time and investors were paying close to market price for foreclosures because the market was rising so fast. At the foreclosure sales that I went to, small distressed houses sold for over $300,000, and that was out of my price range. Also at these sales you needed to have 20% of the bid price in certified funds on the day of the sale and the rest within 10 days. Since we found ourselves locked out of the real estate market, I wanted to do something with the little bit of money that we had left from the sale of our condominium to invest for our future. I had heard about tax lien investing, and I thought that was something that I might be able to do.

I started going to tax sales in NJ, the state that I lived in at the time. The problem was that I could not find any information about how to invest in tax liens in my state. At that time there was just one book in print about tax lien investing and it didn’t contain any specific information about my state. What information that I could find was very general. So I started going to tax sales and doing some research to find out more. I met someone else that was trying to do the same thing I was, only on a much larger scale, so we teamed up and helped each other.

We learned the tax lien investing business in NJ, and for a while I worked for my partner, building a sizable tax lien portfolio for him while I was building a smaller portfolio for myself. I hired a handful of people to help me and trained them on how to do due diligence for tax sale properties and bid at the sale. We even developed our own software to track our investments and automate a lot of the work.

Meanwhile I realized that there were a lot of people out there like me who wanted to learn about tax lien investing, but didn’t know where to turn. I started my web site, TaxLienLady.com, to answer questions about how to get started investing in tax liens. I researched tax lien and tax deed investing in every state and wrote a couple of e-books, which I sold through my web site. Then I started doing teleseminars, and interviewing experts in different states on aspects of tax lien and tax deed investing. I wrote step-by-step home study courses on tax lien and tax deed investing, and began doing live seminars for local investing groups.

Now I have multiple home study courses, web sites, and blogs for tax lien and tax deed investing. I have a tax lien investing podcast on iTunes, Videos on YouTube, and articles on tax lien and tax deed investing that appear all over the internet. My goal through all these mediums is to give you the truth about tax lien investing, without the hype, and to help you build your own profitable portfolio of tax liens or tax deeds. If you’d like to find out more about how you can get started investing in real estate secured tax lien certificates, or buying properties for pennies on the dollar with tax deeds, you can get my free report “7 Steps to Building Your Profitable Tax Lien Portfolio” at www.TaxLienInvestingBasics.com.

What’s Wrong with Tax Deed Investing?

2009-03-04T10:55:00.001-05:00

You may have heard that tax deed investing is a great way to purchase properties for back taxes. But here are the reasons why it doesn’t always work out that way. First of all these tax sales are competitive and though the bidding for tax sale properties may start at the back taxes owed, any property with a house on it is bid up at the sale, sometimes close to market value. Then what makes it even more difficult for the average person to buy a home at a tax sale is that in most counties is, you need to have the full bid amount, in certified funds on the day of the tax sale or the day after the tax sale. That means that you have to have all of your cash on the day of the sale. You do not have time to get financing. So what is a person in one of these competitive deed states to do? How can you buy tax sale properties for pennies on dollar in one of these states?

There are ways that you can purchase tax sale properties for pennies on the dollar, but not buy going to the tax sale. You can avoid the competition at the tax sale in tax deed states by contacting the owners of these properties before they are sold in the tax sale. You can do this by finding vacant properties that are on the tax sale list that have out of state owners and by contacting the owners of these properties. What you are looking for are property owners who have already decided, for whatever reason that they no longer want the property, and were prepared to let it go at the tax sale. Then you can offer them a small consideration for deeding the property to you before the tax sale. In this way you can pick up vacant properties for less than what they would sell for at the tax sale.

But why would someone just handover a quitclaim deed to their property to you? There are many reasons why someone would do this. There are many reasons why a person would do this. Here are just a few: Divorce or other life changes, loss of a job, or relocation to another area of the country. It is important to check for other liens on the property before you do this because since you are purchasing the property directly from the owner, you would be responsible for any liens, judgments, or mortgages they may be on the property. So check that out first.

Did you know that there is a little known secret about tax deeds that you can do in some states that will let you cash in on tax deed properties without going to the tax sale? You can find out all about it in my free Tax Foreclosure Fortunes mini-course. Get your copy at www.TaxForeclosureFortunes.com.

Tax Deed Investing on Steroids Part 1

2009-02-26T16:19:00.001-05:00

You may have heard that tax deed investing is a way to purchase tax foreclosed properties for pennies on the dollar. And you may also know that now is a great time to start investing in tax deed properties because there’s more available now then there has been in the last few years. But did you know that there is a way to Cash in on tax deed properties without even bidding at the tax sale? How would you like to be able to buy tax sale properties for less than what they would go for at the tax sale? And because you are purchasing the property from the owner, before the tax sale, you don’t have to worry about clearing the title.

But that’s just the beginning of how you can cash in on tax deed properties without going to the tax sale. I’m going to tell you a little known secret about tax deeds that not all investors know. In many tax deed states, when properties are bid up at the tax sale, the county will make the “excess proceeds” available to the owner of the property. The excess proceeds are the amount of money that is in excess of the back taxes and penalties, or the minimum bid. Many states give this back to the owner of record of the property at the time of tax sale, and you can use this knowledge to make money on tax deed properties without bidding on them at the sale.

Here’s how it works. You find the owner of a property that is going to be sold in a tax sale in a few weeks. You ask the owner of the property if they intend to let the property go to sale. And you ask them if they would give you the property since they are going to let it go anyway. Or you could offer them a small amount of money for it. You get them to issue you a quitclaim deed to the property. You record the deed at the county clerk’s office. You DON’T pay the taxes; you just let the property get sold in the tax sale. You track the property and find out how much it sold for at the tax sale, and then you apply for the excess proceeds.

The beauty of using the excess proceeds strategy of tax deed investing is that first of all you avoid the competition at the tax sale by purchasing the property directly from the owner and you don’t have to pay as much for the property as you would at the sale. Secondly, you don’t have to clear the title to the property and because you only own the property for a short time, your expenses are minimal.

There are a few things that you need to check out before you try this though. This process does not work in all deed states. Some deeds states do not give the excess proceeds back to the owner of the property, so you need to check that out first. The next thing that you have to check is that the property will be bid up at the sale. You have to make sure that the tax sale is competitive enough that the price of the deed will be bid up considerably higher than the starting bid if you are going to be able to make money at this. You can check this by checking on what happened at the tax sale last year, how high did properties that were in last year’s sale get bid up? But that doesn’t always let you know what will happen this year, since economic conditions may be a little different. So you might want to also check recent tax sales in nearby counties or nearby states with similar demographics to get a feel for what you can expect this year.

You also have to do your due diligence on any properties that you plan on purchasing before you buy them. You need to do this for two reasons. The obvious reason for checking out the property is to make sure that it’s worth enough money so that it will be bid up at the tax sale. But you also want to check and see if there are any liens or judgments on the property before you purchase it from the owner. Because you are purchasing the property directly from the owner and not at the tax sale or from the county, you would be responsible for any liens or judgments against the property at the time you purchased it. So if there is a mortgage on the property, you would be responsible to satisfy that mortgage. Therefore you want to stay away from properties that have any liens on them.

Since you have to do due diligence on tax sale properties anyway, for any type of deed investing, this strategy of tax deed investing is no more work than just purchasing properties at the deed sale. The great thing about using the excess proceeds strategy is that you need less money, so you can purchase more properties and make more money! In part two of this series I’ll give you some FAQs for the excess proceeds strategy.

You can get a free mini-course on this little known secret strategy for cashing in on tax foreclosed properties without going to the tax sale at www.TaxForeclosureFortunes.com

Tax Lien Investing Book Review

2009-02-25T22:13:00.001-05:00

Recently one of my clients asked me what I thought of one of a book about tax lien investing. The book that he asked me about is one that I do recommend on my web site. The name of the book is Profit by Investing in Tax Liens, by Larry Loftis. The problem with books about investing in tax liens and tax deeds is that every state is very different and there is no book in print that I’m aware of that does justice to every state in the U.S. My goal in this article is to give you a short review of some of the books that I’m familiar with and point out the pros and cons of each one.

Let’s start with the book already mentioned, Profit by Investing in Tax Liens by Larry Loftis. Mr. Loftis is an attorney in Florida, and I do find that the best books on tax lien investing are written by lawyers that are also tax lien investors. Mr. Loftis has personally purchased tax liens in nine states and the District of Columbia. In addition he has also either attended tax sales or bid on over-counter liens or deeds in four other states. He or a member of his staff has either interviewed or spoken with tax sale officials from all 50 states. This is probably the most comprehensive and accurate book on the market that I am aware of. It’s great for anyone that is just getting started in tax lien or tax deed investing and wants to know the basics. The drawback is that for some states there is very little information given. As I said earlier, there is no one book that does justice to every state. What I like about this book is that the author didn’t just look up the state statutes in each state (even though he is a lawyer), but contacted county tax offices in every state to find out what actually takes place. I give this one two thumbs up for beginners and one thumb up for experienced investors in tax lien investing.

Another book written by an attorney is The 16% Solution, by Joel S. Moskowitz. Though this book is written by an attorney, it was first published back in 1992, and last copyrighted in 1994, more than 10 years before Profit by Investing in Tax Liens. What I like about this book is that it does not attempt to cover both tax lien and tax deed investing but concentrates on only tax lien investing. As little as four years ago, this was the only book that I could find in print on tax lien investing. Even then, though, this book was already outdated. Not only does each state have different rules when it comes to tax lien and tax deed investing, but these laws and procedures are constantly changing. This book is still good to read and have in your library, but only as an introduction to tax lien investing. Any state specific information is outdated (it doesn’t give too much state specific information anyway), and any contact information is probably no good. I give this book one thumb up for beginners, no thumbs up for experienced investors in tax lien investing.

I’ve heard that the state of New Jersey is the second most popular state for tax lien investing. I don’t know if that’s still true, but I do know that NJ has the most complicated law and procedures for tax lien investing. It is also one of the most profitable and most competitive states to invest in. Until 2005, there was no book in print that discussed tax lien investing in New Jersey accurately. That’s the year that Tax Liens: The Complete Guide to Investing in New Jersey Tax Liens, by Michael Pellegrino, was published. Mr. Pellgrino isn’t just an attorney in New Jersey; he’s an attorney that specializes in tax liens. He specializes in tax lien foreclosures and related litigation, so he really knows the ins and outs of tax lien investing in New Jersey. Although this book doesn’t cover everything for the experienced investor, it does cover what you need to know to get started with tax lien investing in New Jersey. What I love about this book is that it concentrates on tax lien investing in one state, thus it covers what happens in that state more thoroughly than any of the other books about tax liens. This is a must have for anyone that is thinking of investing in New Jersey tax liens and a good reference for experienced investors in that state. I give this book two thumbs up, for both beginning and experienced investors in New Jersey.

You can find all of the books that were mentioned in this article on my web site at TaxLienLady.com/resources and you can also find them at Amazon.com. When I first started investing a few years ago there was only one book in print about tax lien investing. Today there are several. There are more available than were mentioned here in this article. I want to caution you before you purchase other books that are written on this subject. There is only one other author I know of that I would recommend even though I haven’t read her books. That author is Lillian Villanova and the reason that I would recommend her books is that I know she is an experienced tax lien investor. In fact, I believe that she makes her living with tax liens; she is experienced in more than one state, and has taught others how to invest in tax liens. This is important because there are a few people out there writing books on tax lien investing that have limited experience. They buy a couple of tax liens, do a little research and then write a book. This is not the kind of advice or knowledge that you need in order to buy profitable tax liens. You want to learn from a real expert, who knows what the pitfalls are and can steer you away from them. Maybe that’s why all of the books that I recommend on my web site are written by attorneys.

Another Advantage of Tax Lien Investing

2009-02-04T23:13:00.006-05:00

I finally figured out why I’ve been successful at investing in tax lien certificates, but have not been very successful at other types of real estate investing. All this time I thought it was just because there’s less money needed for tax lien investing than there is for most other types of real estate investing. But now I think that I’ve found out the real reason. It’s my negotiating and communication skills, or should I say lack thereof.

Most types of real estate investing require negotiation and communication. You have to get on the phone and talk to someone, negotiate a price, and make a deal. Worse than that, you might have to make a few cold calls – you know call someone that has a property for sale or rent who doesn’t know you from Adam, ask them about their property, and determine if they’ll sell it to you, at a discount and preferable for no money down.

Well I don’t know about you, but when it came to these calls I was terrified of the phone. It wasn’t actually the phone that I was afraid of but the person on the other end of it. It didn’t matter if they were calling me and responding to one of my “we buy houses” ads, or I was calling them on their for sale or for rent ad. And then I had to meet them in person, look at their property and negotiate a deal. I just didn’t consider myself a good negotiator.

With tax lien investing on the other hand, there is nothing to negotiate. Usually, I never have to talk to the delinquent taxpayer. The only person that I have to talk to is the tax collector and maybe the other bidders at the sale. I don’t have to negotiate the terms of the deal. State law already specifies all of that. All I have to be concerned about is exactly how low in interest or how high in premium I want to bid. No negotiating skills needed - Another benefit of tax lien investing over other types of real estate investing.

Now is a great time to start investing in tax lien certificates because of the economy there are more tax liens available and less competition. The Arizona tax sales go on at this time every year (February and March), and some Arizona counties have tax sales online. If you’d like to learn how to build a profit tax lien portfolio now, I can help. I have a home study course that takes you through all of the steps that you have to follow to buy profitable tax lien certificates or tax deeds, including how to do your due diligence to illuminate the risks. Find out more about how you start your own profitable tax lien portfolio today at TaxLienLady.com/EquityTrust.

When NOT to Buy a Tax Lien

2009-02-04T22:47:00.015-05:00

Recently someone contacted me with a very “valuable” lien that they had for sale. They didn't have the money to foreclose on the lien and wanted either to sell it or partner with someone on foreclosing it. (Have someone else hire a lawyer to foreclose on the lien and share in the profits). When I checked into the property, I found out that it was a vacant piece of land with little value, and the lien holder had already invested more than $16,000.00 into this lien. They had paid subsequent taxes over a few years and when they stopped paying the taxes the lien was struck off to the municipality.

Because this was not a good property the municipality never foreclosed the lien as well. The original lien was purchased back in 1993. The municipality picked up the lien in 1997 and the back taxes owed on this property now are probably more than the property is worth. I had to give her the bad news that her lien is not worth foreclosing on and she won’t be able to sell it. If she only knew when NOT to buy a tax lien, this bad investment would have been avoided.

So here is a list for you of a few reasons not to buy a tax lien. Be sure check the items on this list for tax sale properties before you purchase a tax lien certificate on the property and you’ll avoid taking an unnecessary risk with your money.

* There are very low annual taxes for the property (lower than usual for the area)

* You can’t find the property on the tax map

* You can’t locate the property to look at it

* The property has an unknown owner

* The property is land locked with no right of way

* The property is not large enough or not the right shape to build on (check zoning)

* There are prior tax liens on the property and the prior lien holder is at the tax sale

* The property is or has been contaminated (check the state environmental web site)

* The property is condemned or about to be condemned (eye-ball the property or check with the municipality)

* The grade of the property is too steep to build on

* The property is in a flood zone

These are just some reasons not to buy a tax lien certificate. I don’t want to give you the wrong idea. Investing in tax liens can be very profitable. I believe that it’s an excellent way to invest your money safely if it’s done properly. You can find out all the reasons why I like in tax lien investing in my article Why Do I Invest In Tax Lien Certificates.

Now is a great time to start investing in tax lien certificates. As a result of the week economy there are more tax liens available now then there have been in the past few years. Right now (fall) the states of Indiana and Illinois are having their tax lien sales, An in the Arizona tax sales go on at each year in February, some Arizona counties even have tax sales online. If you’d like to learn how to build a profitable tax lien portfolio now, I can help. I have a home study course that takes you through all of the steps that you have to follow to buy profitable tax lien certificates or tax deeds, including how to do your due diligence to eliminate the risks. Find out more about how you can start your own profitable tax lien portfolio today at ProfitableTaxLienPortfolio.com>.

Real Estate Investing Training: My Quest for the Best Part 4

2009-01-15T23:14:00.002-05:00

In the last 3 articles in this series I told you about my quest for real estate investing experts that give the best value for their courses, and I told you about two women that I choose to mentor me in real estate investing this year. I don’t want you to think that just because I choose two women in a field that is dominated by men, that there aren’t any men in this business that are excellent trainers as well. In this article and the next article in this series I want to tell you about the men in my life – my business life that is; My tax lien investing to be exact.

The business of tax lien investing is such a small niche in real estate investing that it is almost totally dominated by men. There is only one or two other women that I know of that I would consider to be “experts” in this field. And while one of them has written a couple of books on the subject, neither of them give any formal training in this area that I am aware of. My mentors in the field of tax lien investing have been men. And the web sites that I consider to be indispensable tools for investing in tax liens are also owned and operated by men.

In this article I’d like to tell you about three web sites that I believe are indispensable tools for investing in tax liens. The web site that I use the most for investing in New Jersey tax liens is LienSource.com. LienSource is a registered servicemark of Savid Resource Corperation, a New Jersey Based company. Savid’s president, Steve Davis, has been a New Jersey certified tax collector for over 15 years. He has worked in 8 New Jersey municipalities through his career and is currently the tax collector for Bethlehem Township in Hunterdon County. LienSorce provides tax sale information and tax sale lists for New Jersey and Florida, Nassau County New York, and Washington DC.

To find out what tax sales are coming up all over the country, I use TaxSaleLists.com. TaxSaleLists.com is owned and operated by John Lane. John’s company has over 35 years of experience in buying tax liens in different areas of the country. He is one of the few tax lien investing “gurus” that is an experienced and successful tax lien investor himself. You can get a free membership to his site at TaxSalesLists.com and find out what tax sales are coming up all over the country.

The third web site that I consider to be one of my indispensable resources for tax sale information, especially for investors in Arizona, is ArizonaTaxLiens.com. Arizona Tax Liens is owned and operated by Brendan Monahan. Brendan has been helping people invest in Arizona tax liens since 2001. His site provides education and Arizona tax sale information and tax sale lists. Brendan started providing tax sale lists for Arizona counties a few years ago when he found it difficult to get these lists for his own investing. Many Arizona require that you send a request by mail (with a check for the required fee) and wait for your check to clear before they will send you the tax sale list. This can take weeks. Arizona Tax Liens provides updated lists instantly online and in many cases for less than the county charges.

Stay tuned for Part 5 in this article series in which I’ll tell you about the two gentlemen that are my mentors in tax deed investing and investing in tax delinquent properties.

Real Estate Investing Training: My Quest for the Best Part 3

2009-01-15T23:13:00.000-05:00

In the Part 2 of this series I introduced you to Wendy Patton, one of the 2 women real estate investing experts that I found to mentor me in my real estate investing this year. Now I want to introduce you to the second expert that I choose to work with this year, Heather Seitz.

Heather is a dynamic young lady who in a few short years became not only a very successful real estate investor, and trainer, but a very successful internet marketer as well. I love Heather’s style of teaching real estate investing. She’s honest and straight-forward and tells it like it is – she doesn’t candy coat the business of real estate investing. She teaches about real estate investing much the same way I teach about tax lien investing. Her trainings are top-notch and she gives a tremendous amount of value in her courses, which are very reasonably priced. That’s why I choose Heather to be one of my mentors in real estate investing in 2009.

I’m currently taking her “Back to Basics” 8-week webinar training course. I just couldn’t resist the opportunity to take her 8-week training that goes over all of the basics of investing in real estate and puts all of the pieces together. This training was just what I needed because I’ve purchased a few real estate investing courses over the last few years but still haven’t made money in real estate investing (except for tax liens). I was so impressed with the first lesson – and it fits right in with Wendy Patton’s program (see Part 2 of this series), that I can’t wait for the next lesson.

I also have Heather’s Probate Profit System – another great value for the money. Along with this course Heather gives all her form and contracts along with her step-by-step system for investing in probate properties, which is one of her favorite ways to find investment properties. This course includes CDs and transcripts from her live 2-day workshop, her contracts, and deal coaching with Heather or a member of her staff. All this for less than $500! I know that I’ve paid double that for similar courses.

I’m so excited about working with Heather this year that I’d like to share with you one of her special reports that you can get at no charge. Heather has a very informative special report on the lies that real estate gurus tell you and how to avoid getting ripped off. You can get her complimentary special report at http://budurl.com/rant.

Now just because I choose 2 women investors to be my mentors this year in real estate investing, a field that is dominated by men, doesn’t mean that there aren’t any men in this business that are excellent trainers as well. Stay tuned for Part 4 of this article series in which I’ll tell you about the 3 web sites (created and run by men in this business) that are indispensable tools for tax lien investing. And in Part 5 of this series, I’ll tell you about the 2 men that I consider to be my mentors for tax deed investing and investing in tax delinquent properties.

Real Estate Investing Training: My Quest for the Best Part 2

2009-01-10T18:08:00.001-05:00

In part one of this series I told you about my quest for the real estate experts with the best trainings at the most reasonable prices and I told you a little bit about the 2 women real estate investing experts that I have found. Now I bet that you want to know who they are. In this article I will introduce you to them and tell you how you can get more information about them.

First I want to introduce you to Wendy Patton. Wendy started her career as a real estate investor when she was 21. She went on to become one of the most successful real estate investors in Michigan, and to earn her real estate brokers license. She is also a licensed builder, and has her own real estate company, Majestic Realty LLC. She has experience in many different aspects of real estate investing including land development, commercial and residential real estate, foreclosures, and rehabbing, but her favorite way to buy and sell real estate is through lease options. In her seminars and home study courses Wendy teaches clients how to control real estate with little or no money down using lease option, lease purchase and subject to techniques. She is a featured trainer on REIBlueprints.com.

I have Wendy’s Wealth Building Arsenal which includes 4 of her home study courses: Working with Realtors, Getting the Deed, Buying on Lease Options, and Selling with Lease Options. It also includes 2 books - Investing in Real Estate with Lease Options and Subject to Deals and Remarkable Women, as well as 2 special reports, Investing in Lease Options with Your IRA and Tax Aspects of Lease Options. Unlike other training programs, this program has EVERYTHING you need to be successful at investing in real estate using Lease Options including contracts and forms that you can customize for your business. Wendy offers all this for $1998. I know that I have paid almost twice this much for similar courses that did not offer me the one thing that I got with Wendy’s course that I didn’t get with any other – an action plan that I could follow. You can find out more about Wendy’s program at http://budurl.com/wendypatton.

I just received all of the course materials a couple of weeks ago and I have finished Wendy’s book on Investing in Real Estate with Lease Options and Subject to Deals. The best part of her book is that it includes an action plan to help you get started. Wendy gives you a complete business plan to earn $120,000 in one year from real estate investing using the strategies in her book. She even tells you how to set up your office. Using her plan as a guide I was able to write my own business plan for the first quarter of 2009. If you can’t afford her entire program right now, but you’re interested in doing something with real estate investing this year, I recommend that you at least buy Wendy’s book. You can get Wendy’s book at Amazon.com at http://budurl.com/wendysbook for only $14.93.

Stay tuned for Part 3 of this article series where you’ll find out about the second expert that I’ll be working with in 2009.

Real Estate Investing Training: My Quest for the Best Part 1

2009-01-10T18:05:00.004-05:00

This past year I have been on a quest to find the best real estate investing training at the lowest price available. I've been successful in tax lien investing, but now I want to use my profits from tax lien investing and put my money into real estate deals. Real estate investing is something that I have wanted to do for a long time. I just found it easier to invest in tax liens.

I believe that 2009 is the opportune time, both to get involved with tax lien or tax deed investing, if you've been sitting on the fence and to purchase investment real estate. The problem that I have found in learning how to invest in real estate without getting burnt is that there are tons of programs out there. How do you know which one is right for you? And most of the trainings, boot camps, and home study courses cost an arm and a leg. Instead of putting $10,000 down on your first property, it's not uncommon to spend that on training - I know I did. And where did it get me? We'll it didn't make me a millionaire. It didn't even get me my first deal.

My husband and I got our first deal at an auction. And then we were shocked to find out that we needed to put 20% down in order to get the financing for this deal. We only had 30 days till closing and the contract was not contingent on getting the financing. Fortunately we had financing lined up and had just enough money to put down 20% instead of the 10% that we were expecting to need. Now we knew that if we were going to do any more real estate deals we would have to use other methods to find and buy properties: Methods that required little or no money down.

The good news is that now I have found a couple of real estate experts that I can honestly say offer an excellent value for the price of their training. I will be working with these 2 women this year to maximize my efforts in real estate investing. That’s right, these 2 experts that I have found are women, in a field that is dominated by men. And these 2 women are more successful at real estate investing than most of the men out there.

One of them has been in the business for over 20 years – since she was 21, she is an extremely successful real estate investor. She even became a real estate broker and runs 3 successful real estate offices. And she travels the country giving very successful real estate trainings and boot camps. The other expert started her real estate investing business less than 10 years ago, and she has built one of the most successful internet marketing businesses as well as several successful real estate training programs and a very successful real estate business.

Join me on my Tax Lien Lady Recommends blog at http://www.taxlienladyrecommends.com/ in 2009 as I review the coaching and training programs from these 2 incredible ladies and keep you updated on my progress. Stay tuned for the next article in this series to find out who these ladies are and how you can have access to them.

Tax Lien Investing in 2008

2008-12-20T01:08:00.001-05:00

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 TaxLienLady.com 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 TaxLienInvestingBasics.com. 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
TaxLienIntro.

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

2008-12-08T13:02:00.023-05:00

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 TaxLienLady.com. 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 REIBlueprints.com. 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 REIBlueprints.com, and get in on this special offer, but hurry because I don’t know how long this offer will last.

Tax Lien Lady’s Rant: Buyer Beware!

2008-12-01T11:22:00.000-05:00

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 www.TaxLienLady.com. 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 www.taxlienconsulting.blogpot.com and check out my free Tax Lien Investing Tips podcast on iTunes.

Now is the Time to Act: Part II

2008-11-24T12:57:00.002-05:00

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 http://taxlienconsulting.blogspot.com/2008/11/now-is-time-to-act-part-i.html

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 joannemusa@taxlienlady.com. 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

2008-11-24T12:52:00.000-05:00

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 www.TaxLienInvestingBasics.com.

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

2008-11-17T21:01:00.001-05:00

This is the 3^rd 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 http://www.TaxLienLadyRecommends.com .

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

2008-11-10T10:45:00.002-05:00

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.

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

2008-09-30T14:47:00.003-04:00

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 http://taxlienconsulting.blogspot.com/2008/09/tax-deed-investing-can-you-still-get.html. 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 www.TaxLienInvestingTips.com

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

2008-09-14T21:07:00.000-04:00

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 http://www.TaxLienInvestingTips.com. Look for the sequel to this article, Advanced Strategies for Buying Tax Delinquent Properties, for more about Jack’s Land for Pennies system.

I'm in Training

2008-07-07T21:51:00.005-04:00

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, TaxLienLady.com, 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 www.LouBrown.com. You can get a free online demo of Prop Stream real estate software at www.propstreamdata.com. Make sure you tell them that you heard about it from Joanne Musa, the Tax Lien Lady.

Now is the Time for Short Sales

2008-04-27T20:02:00.001-04:00

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 Bloomburg.com 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 http://www.shortsaledeals.com/cmd.php?af=751335

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 – http://www.shortsaledeals.com/cmd.php?af=751335

Happy and Prosperous Investing,

Joanne

Tax Lien Investing FAQs

2008-04-09T15:58:00.001-04:00

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.

Invest in Tax Lien Certificates and Tax Deeds Tax Free

2008-02-26T14:17:00.001-05:00

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 http://www.entrustcama.com/ and you can listen to a free teleseminar/interview with Carl Fischer of EntrustCAMA at http://www.audioacrobat.com/play/WmTmzsXs. You can find out more about Equity Trust Company at http://www.trustetc.com/ and you can listen to a free teleseminar/interview Liz Koos of Equity Trust Company at http://www.audioacrobat.com/play/WvX8Qr1Q.

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

2008-02-05T23:58:00.000-05:00

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 www.TaxLienInvestingBasics.com.

Why do I Invest in Tax Lien Certificates?

2008-01-10T18:22:00.000-05:00

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

Safety.

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.

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.
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.
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.
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.
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.
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.
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
goals.

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: http://www.taxlienlady.com/ProfitablePortfolio.html

Happy and Prosperous Investing,

Joanne

How Much Money do You Need for Tax Lien Investing?

2007-12-07T13:54:00.000-05:00

I am frequently asked, “How much money do I need to start investing in tax liens.” Well, that all depends on what your goal for investing is. If you’re using tax lien investing as a way to invest for the future, then you can get started with a couple of thousand dollars. But if you want to create an income from tax lien investing than you need to invest much more.

One thing that you have to remember is that tax lien investing is not a get rich quick scheme. It’s not like other types of real estate investing like buying and flipping properties, or owning rental properties. With foreclosure properties, you have an idea of when your going to cash out of your deal, and with rental properties you have a steady income. With tax liens, you don’t get paid until the delinquent taxpayer decides to redeem the lien or redeemable deed. This may not be until the redemption period is over and foreclosure notices are delivered.

How much money you will need to invest in order to meet your goals also depends on what state your investing in. In redeemable deed states, like Georgia and Texas, the price of the deed is bid up, so you will need more money to purchase a redeemable deed than you would to purchase a tax lien certificate in a state where the interest rate is bid down. But it can also be more lucrative and give you a faster payout than lien states.

In Georgia for example, the penalty is 20% and the redemption period is one year. You would have to invest $100,000 over the next year to make $20,000 the following year. And if you needed to foreclose on any properties you would need to pay a lawyer, which would cut into your profits. In Texas, where the penalty is 25% and the redemption period on non-homesteaded properties in only six months, you would need to invest only $80,000 dollars in the first six months of next year to make $20,000 in the following six months, and you don’t have to foreclose on the property. In Texas when the property doesn’t redeem by the end of the redemption period, it automatically reverts to the tax deed purchaser.

You need the least amount of money to get started in tax lien investing in tax lien states where premium is not paid for tax lien certificates. In these states either the interest rate, or the percent ownership (should the property not redeem and you foreclose) is bid down, or they use a random selection or round robin procedure for awarding bids. You need the least amount of money in these states because the price of the tax lien is not bid up. In these states it is possible to buy a tax lien with very little money, but in states where the interest rate is bid down, you might not be getting as much of a return on your money as you would in one of the redeemable deed states. I advise that you attend one or two tax sales before you actually start bidding on properties. This way, you’ll know just how much money you’ll need to start investing in tax liens or redeemable tax deeds in your state.

Tax Lien and Tax Deed Investing: How do You Begin?

2007-11-19T19:20:00.000-05:00

The most asked question that I get about investing in tax lien certificates and/or tax deeds is “How do I get started?” So many people have heard about the benefits of investing in tax liens and tax deeds and want to learn how to do it, but they don’t know where to begin. Here is some practical advice for you if you want to learn how to get started investing in tax lien certificates, tax deeds, or redeemable tax deeds.

The first thing that I suggest that you do to get started building your own profitable portfolio of tax lien certificates or tax deeds is to find out what happens in your state. Does your state sell tax liens, tax deeds, or redeemable tax deeds? Next you need to find out who is responsible for the tax sale. Is it the municipal tax collector, the county tax collector, the county treasurer, or a special department just for handling delinquent taxes? Then you need to contact the office that is responsible for the tax sale and ask the following questions:

Ø How often do you hold your tax sale?
Ø Where and when are the tax sales held?
Ø Do I need to register ahead of time to bid at the sale?
Ø Do I need to be present at the sale in order to bid?
Ø What happens to properties that are not sold in the tax sale?
Ø How can I get a list of tax sale properties?
Ø How do I register to bid at the tax sale?
Ø Do I need to have a deposit in order to register?
Ø What is the bidding procedure at the sale?
Ø What are acceptable forms of payment?

Once you get the list of properties that are in the tax sale, you can do your due diligence on these properties and determine just how much you will bid. Remember, you want to invest in PROFITABLE tax lien certificates or tax deeds, not just anything that you can get. In order to make sure that your investment will make you money, and not cost you money, you must do your due diligence before you bid at the sale.

Before you go to a tax sale and purchase a tax lien certificate or tax deed, you may want to attend a tax sale just to see what it’s like. In this way you can become familiar with the bidding process in your state and know what to expect. You’ll have a better idea of what the competition is like and how much money you will need to invest. Bidding procedures differ considerable from state to state and sometimes even from county to county within a state. By attending a tax sale before you actually bid on anything you will be more prepared and have a better chance of winning a bid on a desirable property.

If you want specific information on how to get started in your state, you can try my Jet Start personal consultation. My Jet Start program can help you Jet Start your tax lien or tax deed investing. It is a 30-minute personal consultation with me, but that's not all. You also get my e-books, "Tax Lien Investing Secrets: How to Buy Tax Lien Certificates in New Jersey and Other States," and "Tax Lien Lady's State Guide." You get to download the e-books immediately and then schedule a consult with me after you have the chance to read them. This way you know the right questions to ask. You can find out more about my Jet Start program at www.taxlienconsulting.com.

Tax Lien Investing: How to Profit from Selling Your Tax Lien Certificates

2007-08-09T19:25:00.000-04:00

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 thought 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 lien and afterward. 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 not checking the zoning. The lot turned out to be undersized thus unbuildable. 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 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 www.taxlieninvestingsecrets.com.

What Happens at a Tax Sale?

2007-08-09T19:20:00.000-04:00

What happens at the tax sale depends on what state you attend a sale in, and on whether it is a tax lien sale or a tax deed sale. Tax lien sales can be very different from state to state or even from county to county within a state. Tax deed sales are pretty much the same around the country.

At most tax deed sales the properties are read off by the auctioneer in the order that they are listed and the price of the property is bid up. The exception to this is in counties that have online deed sales, like some counties in California and Florida. In order to bid at an online auction, you have to register online and put up a deposit. The properties are usually listed in batches and a time frame is given for each batch. You put bids in on the properties that you want to bid on, but you don’t know who else is bidding and what the other bids are. You may not even know if you are the successful bidder on a property until after the sale.

Tax lien sales can differ greatly from state to state. In some states the interest rate is bid down. This happens in Florida, Arizona, (two of the most popular tax lien states) Illinois, and in Nassau County, NY. In other states the interest rate is kept constant and the price of the lien is bid up. The amount bid up from the amount due is referred to as “over-bid” or “premium,” and each state handles it a little differently. In some states you receive interest on the premium paid for tax liens (Alabama and Indiana are two state that give you interest on your premium), and in other states you do not (West Virginia is one of these states). Some states do not pay interest on the premium amount and do not return the premium to the investor should the lien redeem (Colorado and Vermont are two of these states). New Jersey is the only state where the interest rate can be bid down to zero and then premium is bid. You don’t receive any interest on the premium paid, but you do receive your premium back if the lien is redeemed within five years.

In some states, something entirely different than the interest rate or the premium is bid. In these states, what is bid down is the percent ownership interest in the property should the lien be foreclosed. The tax lien certificate is awarded to the bidder willing to accept the lowest percent ownership interest in the property. As you can imagine, this makes for some sticky situations should you have to foreclose on a lien and is not the ideal situation for the investor. Tax sales are conducted in this way in Rhode Island, Nebraska, Louisiana, and Iowa.

Some states will use a random selection or round robin process to award tax lien certificates at the tax sale. With the random selection process, the tax collector or auctioneer randomly selects bidders, usually by bidder number for each parcel as it is read out at the sale. With the round robin procedure, the tax collector will go around the room, offering the next parcel on the list to the next bidder in line. The downfall to both of these procedures is that you cannot pick which properties you want to bid on and only do your due diligence on those properties. Here you do not know which properties will be offered to you and you can only accept or decline the ones that are offered to you. The random selection process is used in Wyoming and in Oklahoma. The round robin procedure is used in some counties in Colorado for liens under a certain amount (the amount differs by county).

One tax lien state does something entirely different than any other, and that is the Commonwealth of Kentucky. In Kentucky, nothing is bid, or randomly selected. There is no auction. They accept bids for the amount due plus costs by mail, e-mail, fax, and in person, and the first bid to be received is awarded the tax lien. Although you can mail or fax your bid in, you have to be present at the “sale” to be awarded the tax lien certificate.

If you need help deciding what state to invest in or with getting ready to invest in tax lien certificates or tax deeds, you may want to take advantage of my JetStart Coaching Call. My JetStart call is a one-on-one coaching call with me for only $99.00. I’ll spend one hour with you answering your specific questions about what you need to do to get started. You can find out more about this call and see if it’s something that you’re ready for by filling out the form athttp://www.yourtaxlieninvestingcoach.com/.

Happy and Prosperous Investing,

Joanne

Creating Cash Flow From What You Know

2007-08-09T19:12:00.000-04:00

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 coincides 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 systematize it. By systematizing 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 re-purpose 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.

How To Get Tax Sale Lists for Free

2007-06-19T17:02:00.000-04:00

Once you know when the tax sale is coming up in your area, you need to get the list of properties that are in the sale. I use naco.org to find tax sale property lists online for tax lien and tax deed sales. This only works for counties that have this information online. For counties or states that do not have this information online, you can either call the tax collector and ask how to get the tax sale list or you can buy the tax sale list from a tax sale list provider. To find out which counties have tax sale information and tax sale lists online, you can consult my State Guide.

To go to the county’s web site, first go to naco.org and click on the link to find a county. This will bring you to a page with a map of the United States. Click on the state that you are interested in and you’ll be taken to that state’s web page with a list of all of the counties in the state. Find the county that you are interested in and click on that link. You will be taken to the NACO page for that county. Click on the link to the county on the top of the page and you will go to the county’s web site. Note that this will only work if the county has a web site.

Once you’re on the county’s web site, look for a link to the department or county office that is responsible for conducting the tax sale. For most states, this will be the county treasurer or county tax collector. If you’re not sure who is responsible for the tax sale in your state, then consult my State Guide. Once you get to the web site of the person or department that conducts the tax sale, look for a link to a list of tax sale properties. For larger counties, you can usually find this online. The exception to this is the counties in the Northeastern states. A lot of the Northeastern states do not have county tax sales. Instead the tax sales are conducted by the municipality, so instead of looking for the county web site, in Vermont, New Hampshire, Maine, Rode Island, Connecticut, Massachusetts, and New Jersey, look for the municipal tax collectors web site – not county web site. New York has both county and municipal sales in some counties.

If you can’t find the tax sale list that you want online, you can always buy a list from a tax sale list provider. Even if you can find the tax sale list online for free, you still may want to purchase the list from a tax sale list provider. That’s because the list that you get from the tax collector does not always have the information that you need. Frequently it will only have a parcel ID number, owner name, and amount due. What you want to know is what is the address of the property, what is the assessment and value of the property, what type or class property is it, and how big is the property. All of this (and sometimes even more information) is included in the detailed list that you can get from tax sale list providers. I talked about some different tax sale list providers in the last podcast episode, “How to Find Out About Tax Sales.” You can listen to that episode to get the names and urls of tax list providers for different areas of the country. Purchasing a detailed tax sale list from one of these companies will save you a lot of work in doing your due diligence.

How do You Find Out About Tax Sales?

2007-05-29T22:42:00.000-04:00

How do you find out about tax sales that are coming up in your state? There are three ways that I know of to find out about tax sales for free or almost for free.You can look in the newspaper, call the tax collector, or go to a web site that sells tax sale lists.

The first way to find out about tax sales coming up in your area is to read the legal notices in the local newspaper. Most counties have to post an announcement about the tax sale, as well as the list of properties that are being offered for sale, in the local paper anywhere from two to four weeks before the sale. This method is not entirely free because you have to buy the paper. You also have to know when the sale is held so that you know when to start looking for it.

A better way to find out when and where the tax sale is held is to call the tax collector, or whoever is responsible for the sale in your state, and ask. Most of the time, this will be the county Treasurer or tax collector, but sometimes tax sales are conducted by the sheriff’s office (particularly in some deed states). One to find out who is responsible for the tax sale is to consult my State Guide. My State Guide is available as an e-book along with another e-book on how to invest in tax liens. Both books are available for $39.95. My state guide is different from the other resources that you can get online, because I don’t just give you the type of investment, interest rate and redemption period for each state. I tell you who is responsible for the tax sales in each state, so that you know who you have to contact, and I tell you whether or not you can get information online and give you a link to that State’s website with links to the counties.

The third way to find out about tax sales is to go to a web site that sells tax sale lists. Sometimes they will provide information about what tax sales are coming up for free. TaxSaleLists.com is a web site that you can register with for free and find out about tax sales throughout the US. For New Jersey and some of the eastern states I use LienSource.com to find out about tax sales. LienSource is the best provider of tax sale information for New Jersey. It’s $49.00 per year for a membership to LienSource but you can get a six month free membership if you mention that you were referred by The Tax Lien Lady. Just call the phone number on the home page of www.liensource.com to find out how to get your 6 months free membership. Bid4Assets.com is a web site that you can go to, to find out about online tax sales. You can check this site periodically to see what online tax sales are coming up. Not all online tax sales are conducted by Bid4Assets. For all Arizona tax sales, I use www.ArizonaTaxLiens.com. Here you can get information on all tax sales for Arizona and order any tax sale lists for counties in Arizona, including lists of leftover liens.

To recap here are the three ways that you can find out about tax sales in your state
Read the legal notices in the local newspaper
Call the tax collector or whoever is responsible for the sale
Go to one of the following web sites to find out about upcoming tax sales:
www.taxsalelists.com
www.liensource.com
www.bid4assets.com
www.ArizonaTaxLiens.com

If you need step-by-step information on how to get started, I have a $7.00 Special Report on the 7 Steps to Building Your Profitable Tax Lien Portfolio that is available at http://yourprofitabletaxlienportfolio.com.

Where is the Best Place to Invest?

2007-05-29T22:36:00.000-04:00

Where is the best place to invest in tax lien certificates or tax deeds? Most people are concerned about which lien states have the highest interest rates and which deed states start bidding at back taxes. I believe that the best place to start investing is in your own backyard. I think that it’s best to invest in an area that you know, because you’ll know what the property values are and you’ll know what to look out for. Each state has different problems that you have to be aware of, especially if you’re purchasing raw land.

In Pennsylvania where I invest in tax deeds, for example, I have to worry about whether a property will perk or not. If I buy a lot in a deed sale that doesn’t perk I won’t be able to get a septic design approved and won’t be able to build on the property. Its resale value will be a fraction of the price that I could get for it if it had an approved septic design. In another state you might have other concerns. In dry states, like Arizona for example, you may have to be concerned about water rights.

Don’t be too concerned about which state has the highest interest rate. In states with high interest rates, the interest is typically bid down extremely low. What you should be concerned about is will you have the opportunity to pay the subsequent taxes, and will you get the maximum interest rate on your subs, and are there other penalties that you are entitled to.

In New Jersey, for example the interest rate is typically bid down to 0% and then premium can be bid as well. The reason that investors do this is because they know that once they have the lien, they can pay the subsequent taxes and get the maximum interest rate on their “subs,” which is 18%, and they will also receive a penalty on the certificate amount of the lien.

In Florida where the maximum interest rate is also 18%, the interest is typically bid down to as low as ¼ %. In Florida you are not allowed to pay the subsequent taxes, actually you can pay them, but you do not receive any interest on subsequent taxes, nor will you get any subsequent tax payments back should the lien redeem. However, in Florida there is a minimum penalty of 5%, so if you bid less than 5%, you get the penalty instead of the interest rate that you bid.

Don’t be too concerned about which deed states start bidding at back taxes. The more important thing to be concerned about for deed states is, “what will the competition typically bid the price up to.” In some states, real estate is so valuable and the demand outweighs the supply of affordable homes. In these states (California, Florida, and the Northeast States) any property with a home or business on it will be bid up close to market value. Remember, tax sales are auctions and sometimes people get carried away at actions and pay too much money. Online auctions can be especially competitive, and may California and Florida counties have tax sales online.

To find out about tax sales in your county or municipality go to a sale and see what it’s like. Talk to the tax collector, or whoever is responsible for conducting the tax sale in your area to find out more about how to register for the sale and what the procedures and requirements are for bidding. If you need help determining whom you need to contact, you can consult my State Guide.

My State Guide is available as an e-book along with another e-book on how to invest in tax liens. Both books are available for $39.95. My state guide is different from the other resources that you can get online, because I don’t just give you the type of investment, interest rate and redemption period for each state. I tell you who is responsible for the tax sales in each state, so that you know who you have to contact, and I tell you whether or not you can get information online and give you a link to that State’s website with links to the counties.

What if you live in a deed state and you want to invest in tax liens? I’m in Pennsylvania, which is a deed state, but I’m close to New Jersey, which is a lien state, so I do my tax lien investing there. If you’re not close enough to travel to a state that sell tax liens, is there a state that you vacation in or do business in that sell tax liens? If there is maybe you can right off your next vacation if you go to a tax sale? If not, then you may have no other alternative than to invest online. There are only 2 tax lien states that I’m aware of that have online sales – Arizona and Florida. Arizona sales take place in February and March each year, and Florida lien sales (Florida has both lien and deed sales) are in May and June. Be very careful to do your due diligence on these properties. I don’t advise investing online unless you can go look at the properties or you have someone that can look at them for you.

Here are four action steps that you can take right now to find the best place for you to invest.

Call the tax collector and find out what happens in your state. Do they sell tax
liens, tax deeds, or redeemable tax deeds?
Go to a sale and see what it’s like.
If you are in a deed state and you want to invest in tax liens, then find out what
states sell tax liens, if you need help with this get my State Guide.
Find out about online tax sales at http://www.bid4assets.com.

Bid4Assets has mostly deed auctions, In order to find tax lien auctions online; you will have to go to the county’s web site. For this I recommend going through the links on my State Guide.

If you take the action steps above, then you’ll have a good idea of what state is the best for you to invest in. And if you read my State Guide, you’ll have a good idea of what happens at tax sales in each state. If you need step-by-step information on how to get started, I have a $7.00 Special Report on the 7 Steps to Building Your Profitable Tax Lien Portfolio that is available at http://yourprofitabletaxlienportfolio.com.

Tax Deed Investing: Don’t Wait for the Leftovers

2007-05-02T01:56:00.001-04:00

I recently went to the Monroe County Judicial tax sale in Pennsylvania. I didn’t actually go to the sale. I came in after the sale to see what was left over. When the sale is over the county gives everyone an hour or so to go to the bank and get the funds to pay for the properties that they bid on. All payment has to be in certified funds or money order, no cash and no personal checks are accepted.

When the time limit is up, the county will re-bid any properties that weren’t paid for along with any properties that didn’t sell in the morning auction. I went to this sale to see if there were any decent properties left over at the end of this final auction. What ever does not sell at this auction goes onto the “repository” list and is sold by private bid. When you buy a property from the repository list, you do not need to clear the title, since the county has taken the property. This can save you some money, since to do a quiet title process with an attorney would cost about $750.00.

There were not many properties in this sale, only 9 properties that were bid, but hadn’t been paid for and 16 that were not sold in the morning auction. Half of these properties were sold in the second auction. The only properties that didn’t sell were either undesirable lots or trailers. Trailers are not worth purchasing at a tax sale because you are only given the deed to the trailer, not to the property that the trailer is on. You will either have to pay rent to whoever owns the land or move the trailer. Undesirable land is also not worth purchasing because you can’t build on it, but you would still have to pay the taxes and any homeowner association fees if it’s in a community.

Basically there was nothing left of any value after the tax sale, so next year I will go to the sale and plan on spending an extra $750 to clear the title on anything that I might purchase. I often get inquiries from people who want to invest in tax liens or tax deeds, but they don’t want to attend the tax sale. They either want to invest long distance, where traveling to the sale is not practical, or they just don’t have the time to go to the sale. They want to know if they can buy liens or deeds through the mail from the leftover tax sale list. This may work in some states where counties have thousands of liens available, but it doesn’t work very well for deeds here in Pennsylvania.

Tax Lien Investing: Know What You’re Bidding!

2007-05-02T01:53:00.000-04:00

I attended a tax lien sale in New Jersey yesterday. This particular sale is in the township that I used to live in, and I know it well, so I attend this sale every year. Last year I was able to pick up a couple of small sewer liens there for 18%. This year I came away with nothing. Almost everything went at premium, even small sewer liens.

Investors were bidding hundreds of dollars in premium on small sewer liens with no open taxes. They are sure to make very little profit if anything at all on this type of lien when they pay that much premium. So why do they do it? Some of the investors there I knew were bidding for large funds or tax lien investing companies, they paid quite a bit of premium for tax liens that had amounts due of over $1000.00. The largest lien in the sale was for $22,000.00 and went for $205,000.00 to one of these institutional buyers.

But this I understood, I know that these companies figure out just how much they can pay on these larger liens and still make a profit. Once they have the lien, they can pay the current taxes and make 18% on all of the subsequent taxes that they pay, and when the lien is redeemed they will also receive a hefty penalty on the certificate amount (6%). And as another bonus, in certain municipalities, if they more than $10,000.00 in subsequent taxes for the year, at the end of the year another 6% penalty will be added to the subsequent taxes that they paid. So for instance in the case of this particular lien, the annual taxes were around $68,000.00, (this was commercial property assessed at over 2 million). If they held the lien for a year and it redeemed, they would be able to pay in another $68,000.00 and make 24% (the 18% plus the 6% year end penalty) on that. Although they got 0% interest on the certificate amount, they still get a 6% penalty on it, so their total profit would be $17,640.00 on a total investment of $295,000.00, for a yield of 5.98%.

What I didn’t understand is why would someone pay a few hundred dollars for a small sewer lien with no open taxes. Some people see all the money that is bid for larger liens and think that they can apply the same percentages to smaller ones, but it just doesn’t work. A newbie investor paid $1000.00 for a small sewer lien that was a little more than $200. In this case it doesn’t really matter what the annual taxes are, since you will not get a chance to pay them. You may be able to pay the subsequent sewer amounts, but that is probably no more than $500.00 per year. And because the delinquent tax amount is so low (under $1500.00) the penalty that you receive on the certificate amount is only 2% and the interest received on the subsequent sewer payments will only be 8% until the delinquent amount reaches $1500.00. It would take you almost three years to pay enough subs to reach that amount and most sewer liens will pay off within the year. But in this case let’s assume that the lien will be held for one year and then redeem like we did in the example above and see how the investor does.

If the lien redeems in a year the investor will get back their $1000.00 premium – with no interest or penalties along with the redemption amount. Lets say that sewer tax is $500.00 per year and they paid the subsequent taxes for one year. They would receive back the certificate amount with no interest and a 2% penalty, which is only $4.00 and the subsequent sewer amounts that they paid with 8% interest, which is $40.00. So their total profit would be $44.00 and their total investment was $1700.00, giving them a yield of 2.3%. Right now they could get more than that in the bank without doing any work. But most sewer liens redeem in a few months, so it is not likely that an investor will even to that well.

These examples are a little simplified and it doesn’t work out exactly this way. In New Jersey taxes are paid quarterly, so instead of paying the taxes all at once, you pay them 4 times a year. So the actual returns are a little lower than the examples here, simple because you usually don’t get to pay a whole year of subsequent taxes at one time. But the moral of this story is “know what you’re bidding” when you go to a tax sale.

In this case the newbie investor did not know that she wasn’t going to receive any interest on the premium that she was bidding, or on the certificate amount. She really did not know what she was doing, but she kept bidding because other investors were also bidding. Sometimes seasoned investors continue bidding because they want to bid new investors up to the point where it is not profitable for them. Their reasoning is that they think they are getting rid of the new competition. And some investors that are bidding with fund money, or appropriated funds, must use a certain amount of money per year, so sometimes they pay more than they should for liens. Don’t let them bid you up to numbers that don’t make any sense.

Know what your bidding before you bid at a tax sale. It you’ve never been to a tax sale before, you might want to go and observe what happens before you actually bid. After the sale, if there’s something that you don’t understand, ask someone in the tax office. Different states have different bidding procedures. In some states the interest is bid down, and in other states premium is bid for liens. New Jersey is the only state where interest is bid down and premium is bid. So a lien can go quickly from 18% to $1800.00 in premium with no interest.

What’s Holding You Back?

2007-04-20T09:20:00.000-04:00

What’s holding you back from building your profitable portfolio of tax lien certificates or tax deeds? Could it be any of the following reasons?

I don’t know how to start
I’m afraid that I’ll loose my money
I don’t know if I have enough money
I don’t know enough
I don’t know about the risks

I had these same concerns when I got started, but being the risk taker that I am, I just jumped right in and learned as I invested. Did I loose any money and make some bad decisions at first? Yes I did, but because I invested very little money to start, my learning curve was minimal and I made up any money that I lost very quickly.

A few years ago, when I got started, there was not much out there, either online or in print, to help me. You have the benefit of learning from my mistakes. Since I began investing in tax lien certificates there have been a handful of books published on the subject. When I started there was only one book in print, which was about 20 years old. There have also been a bunch of e-books published about investing in tax liens and tax deeds, including my own, and numerous courses and online products.

You don’t have to know everything about there is to know about tax lien investing to begin building your own profitable tax lien portfolio. You just need to know how to begin. Find out about tax sales in your county or municipality and go to a sale and see what it’s like. Talk to the tax collector, or whoever is responsible for conducting the tax sale in your area to find out more about how to register for the sale and what the procedures and requirements are for bidding. If you need help determining whom you need to contact, you can consult my State Guide.

If you wait until you know everything there is to know about investing in tax lien certificates or tax deeds, you’ll never get started. You’ll miss out on the profits that you could have made if had started right now. So what are you waiting for? Nothing will happen until you take action. So here are some action steps that you can take right now:

Find out who conducts tax sales in your area and contact them
Get a list of properties that are in the next tax sale
Do due diligence on the properties in the tax sale
Go to the sale and see what happens, write down what each of the properties on the sale goes for

If you take the action steps above, then you will know just how profitable tax lien or tax deed investing will be for you, and how much money you’ll need to get started. If you’re not sure how to do due diligence on tax sale properties, you have many options of finding that out. I have many articles about how to do due diligence for tax sale properties on my blog at and on my web site. If you want step-by-step information I have a $7.00 Special Report on the 7 Steps to Building Your Profitable Tax Lien Portfolio that is available at http://yourprofitabletaxlienportfolio.com.

What You Need to Know About Tax Sale Lists

2007-03-12T14:36:00.000-04:00

One of the first things that you have to do in order to buy profitable tax liens or tax deeds is to get the tax sale list. Usually you can get the tax sale list for free from the county or municipality. Sometimes you can even find the tax sale list online on the county treasurer’s or tax collector’s web site along with information about the sale and information on how to register for the sale.

Unfortunately this list does not always have the information that you need to do your due diligence on the properties. Most of the time this list does not even include the property address. It usually does include the property tax ID number, the amount owed, and the owner of record; some lists may include the annual taxes. Some pertinent information that is usually not on this list will help you to do your due diligence on the properties is: The address of the property; the property classification – is it a farm, residential, commercial, or raw land; the type property – how it is zoned; the property assessment and annual taxes; the last sale price of the property; and mortgage information.

You can get all of this information if you buy a detailed list from a tax sale list provider. I find that tax sale list providers that specialize in one state or area of the country do the best job of providing timely and meaningful lists. They are sometimes more thorough, since they are covering a smaller area, and they are more knowledgeable about the information that they provide. I’ve seen national providers frequently leave out one or two counties in a state or only list it when it’s to late to do proper due diligence for the sale. Two of the smaller list providers that I recommend are LienSource.com – for New Jersey, Nassau County NY, Washington DC, and Florida; and ArizonaTaxLiens.com for Arizona. For most other states you may be able to get the list online in excel format and then cross reference the parcel or tax ID number with the assessment data that you may also be able to find online. When you can’t find this information online – on the county tax collector’s or county treasurer’s web site, you may have no choice but to buy your list from a national tax sale list provider. In this case you can try taxsalelists.com.

On February 15, 2007 I interviewed Steve Davis of LienSource on “What You Need to Know About Tax Sale Lists.” In this interview Steve covered everything you have to do to be successful at buying tax liens and also how to decipher the tax sale lists for both tax liens and tax deeds, and what to do with the list once you’ve got it. For information on how you get the recording of this teleseminar go to www.taxlienlady.com.

Purchasing Left Over Tax Lien Certificates and Tax Deeds

2007-03-12T14:32:00.000-04:00

I get a lot of questions from subscribers to taxlienlady.com that want to know how they can purchase tax liens or tax deeds through the mail. They specifically want to know about left over tax liens and tax deeds. These are tax lien certificates or tax deeds that are “left-over” from the tax sale. In other words no one bid at them at the sale and they were struck of to the county, state, or municipality. In most states if the delinquent tax property is not sold at the tax sale, it is struck of to the county or municipality. A few states allow the assignment of tax lien certificates or tax deeds to investors. There are pros and cons to purchasing leftover or assignment liens or deeds from the county.

On the positive side, there is no competition; you don’t have to bid against other investors. For liens and redeemable deeds, you may be able to purchase a lien or deed in which the redemption period has already ended, or is close to being over, in which case you may wind up with the property. For some deed states, since the county, state, or municipality has already taken title to the property, you may not have to go through a title clearing process (quiet title or title certification process). You’ll have to check with the county to find this out.

On the negative side, leftovers are usually not worth bidding on in the first place and that’s why they were not sold at the sale. In smaller counties, and in states where the tax sales are conducted by the municipality (New Jersey, and the New England states) there is usually nothing worthwhile that is left over. To find leftover tax liens or deeds, you have to go to counties that have very large lists (a few thousand properties) to begin with. And you’ll have to sift through a lot of junk to find good properties.

Sometimes you can find a nugget of gold in the leftover tax sale list. I know a couple of tax lien investors in Arizona who do this regularly as well as a couple of tax deed investors (in Texas and Pennsylvania) who have done this. With more and more people becoming interested in tax lien and tax deed investing and going to the auctions, there are less leftovers available than there used to be. My advice is to use extreme caution and be extremely rigorous with your due diligence when purchasing leftover liens or deeds. I also believe that investing long distance in leftover liens or deeds is a mistake if you do not have someone that can physically look at the property for you.

If you would like to find out more about how to find that nugget of gold in the leftover tax sale list, this is the topic of Tax Lien Lady’s next teleseminar interview with Brendan Monahan of Arizona Tax Liens on March 15, 2007. To register for the teleseminar at no charge go to http://tinyurl.com/f2hy4.

Step Seven to Building Your Profitable Tax Lien Portfolio

2007-02-27T18:18:00.000-05:00

OK, so you’ve followed the first six steps to building your profitable tax lien portfolio and you’ve purchased your first tax lien certificate or tax deed. Now what do you do to insure that your investment is a profitable one? The seventh and final step to building your profitable tax lien or tax deed portfolio is protecting your investment and maximizing your return.

Depending on whether you are investing in liens or deeds and which state you are investing in, these steps may include; recording your lien or deed with the county clerk, paying subsequent taxes, Clearing the title to the property, and foreclosing the right to redeem a tax lien. Regardless of whether you purchased a tax lien, a tax deed, or a redeemable tax deed, the first thing that you need to do is record your lien or deed with the county clerk. Unless it is recorded, all you have is a worthless piece of paper. In some states this will done for you, and you will be charged a recording fee when you purchase your tax lien certificate or tax deed. In many states, it is the investors responsibility to do this and you are given a specific time frame in which it needs to be done. In some redeemable deed states, like Texas for example, the redemption period does not start until the deed is recorded, so you’ll want to do that right away. It is to your advantage to check out ahead of time what the procedures and laws are in your state for recording a tax lien or tax deed.

When you purchase a tax lien, some states will allow you to pay the current unpaid taxes (remember that the taxes you paid in order to get the lien are most likely last year’s taxes) and any subsequent taxes that the property owner doesn’t pay. I recommend that you pay the subsequent taxes (refered to as “subs”) , if your state allows it, as soon as possible. Some states will give you the maximum interest on your subs and some will only give you the interest that you bid at the sale, but most states that allow you to pay the subs also allow you to collect interest on them. This is one way that you can maximize your profit in a tax lien.

When you buy a tax deed, in most cases you will getting a non-warranty deed. That means that there is not warranty as to the condition of the property or the condition of the title to the property. Basically you are buying the property without clear title and if you want to resell it, you will need to clear the title. Very few states issue a warranty deed at a tax sale. You can clear the title to the property in one of two ways. You can either hire an attorney to do a quiet title process or you could hire a title company to do a title certification process. Which one of these processes are more cost effective and quicker than the other will depend on the state. I have heard that in Texas it is easier and cheaper to use a title company and I know that here in Pennsylvania it can be more cost effective to use an attorney. I do recommend that if you use an attorney that you find one that does a lot of this type of work.

If you purchase a tax lien and it is not redeemed within the redemption period, than you may need to foreclose on the property in order to get paid. In my experience this happen very seldom, but when it does you will need a lawyer to handle this for you. It may seem like a simple process, but there many steps that have to be followed exactly or you could loose your right to the property. I also recommend that you only use a lawyer who specializes in tax lien foreclosures. Lawyers who specialize in this area are familiar with the difficulties that come up and know how to handle them. Because they are very familiar with the process they will be able to get through it faster than a lawyer who does not do many tax lien foreclosures.

This is the last article in this series. 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.

Tips for Bidding at a Tax Sale

2007-02-27T17:03:00.000-05:00

Here are some tips from the Tax Lien Lady to help you increase your chances of being a successful bidder at a tax lien or tax deed auction.

Be one of the first to register for the sale and among the first to arrive at the sale. At very large tax sales it’s not easy for the tax collector to see the bidders in the back of the room. More bids are awarded to the buyers that are in front of the tax collector (or who ever is doing the auction). At some sales seating is assigned based on your bidder number, so register early for the sale. If seats aren't assigned, be sure that you arrive at the sale early so that you get a good seat. I like to get to a tax sale one hour before the sale begins, that way I know that I can get a good seat.

Make sure that you turn your cell phone off before the start of the sale. Every thing happens very fast once the sale begins and if you have to stop paying attention to what is going on in order to shut your phone off during the sale, you can easily loose tract of what property is being bid. Also do not talk to anyone while the sale is going on for the same reason. At one sale that I went to, someone came in late and sat down behind me and asked me what property they were on. Because I allowed myself to be distracted and answer his question, I missed the opportunity to bid on a property. Once the sale starts, you’ll have to pay strict attention and avoid distractions.

Know what your bottom line is on each property before you go to the sale. Have a spreadsheet with the maximum amount that you are willing to pay, or the lowest interest that you are willing to pay for each property, or have these numbers written on the tax sale list next to each property. You can easily loose tract of the auction if you have to figure out what you want to pay while the bidding is going on. Also keep a running total of what you are spending so that you don’t go over the total amount you can pay. If you do bid over the funds that you have available and you can’t pay for all of the liens or deeds that you were successful bidding on, you could be barred from attending any more tax sales in that county. It’s a good idea to take a calculator with you to the sale to help you keep tract of what you’re spending. Don’t forget to add in any other costs that you might have to pay at the sale; like recording fees, realty transfer fees, or auctioneer’s fees.

You also might want to have a highlighter and a pen with you. The highlighter is to highlight the properties that you want to bid on. The pen is for crossing out the properties that were paid before the sale and for changing the amounts on the properties where partial payments were made. This is another reason why you want to get to sale an hour early, you’ll need to get the final list and make all of these changes before the sale.

Step Six to Building Your Profitable Tax Lien Portfolio

2007-02-19T10:20:00.000-05:00

This is the seventh article in a series of eight articles about how to build a profitable portfolio of tax lien certificates or tax deeds. If you missed the previous articles in this series, you can read them at www.taxlienconsulting.blogspot.com.

OK, so you’ve got the tax sale list and you’ve done your due diligence and you’ve made your preparations to go to the tax sale. You’ve registered for the sale, you have your paperwork in order and you’ve made arrangements to have the proper form of payment at the sale. Since most tax sales are auctions, the next step to building your profitable tax lien portfolio is to bid at the sale.

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 beforehand 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. It’s important to know exactly what you are bidding.

There are four basic types of bidding procedures that you will encounter at a tax sale. At tax lien sales, typically the interest is bid down, or the interest is not bid down and the price of the lien is bid up. This is referred to in the tax lien industry as “premium” or “overbid.” Different states may refer to it differently and they treat it differently. In some states the amount bid is only the premium or overbid amount, and the total price of the lien will be what was bid plus the lien amount. Other states will start the bidding at the lien amount so that the bid price includes the lien amount. Some states do not bid down the interest or bid up the price of the lien. They may use another bidding process in which the percent ownership in the property (should the property be foreclosed) is bid down. In this process it is the bidder willing to receive the lowest percent ownership in the property that wins the bid. Another bid process that is used in some states is random selection or a round robin bidding process. For both of these bidding procedures, the interest rate is not bid down and the price is not bid up; they remain constant. In counties that use the random selection process, a bid is randomly selected among the registered bidders at the sale. In counties that use the round robin procedure, the tax collector will go around the room in a specific order, offering the next tax lien to the next registered bidder in line. The bidder can either accept or refuse the lien; but if the lien is refused, another won’t be offered until his or her turn comes up again.

The procedure used for most deeds sales is the premium bid method. What differs among most tax deed states is the starting bid amount. In some states the starting bid will be the back taxes owed plus any penalties. Some states may start the bidding at a percentage of the assessed value of the property, and a couple of states will start the bidding at the market value of the property. You can see why it’s important to be familiar with the bidding process and what is being bid before you actually start bidding on tax sale properties! Also, you will want to be aware of other costs involved besides the amount you bid. When purchasing a tax deed, there will be other costs involved, not just the amount that you bid. There may be a realty transfer fee and a recording fee. Know what these fees are ahead of time and be prepared.

Due Diligence for Tax Sale Properties, or What You Need to Know Before You Bid

2007-02-19T10:15:00.000-05:00

Due diligence is the most important step in the process of investing in tax liens or tax deeds. Whether you do this correctly or not could mean the difference between being extremely profitable or losing your investment. Due diligence for tax deed properties is a little more involved than due diligence for tax lien properties. When you purchase a tax lien certificate, you are not purchasing the property. You are paying the taxes on the property and recording a lien against it. When you purchase a tax deed, however, whether it’s a regular tax deed or a redeemable tax deed, you become the owner of the property and you will be held responsible for any other liens that survive the tax sale. You’ll also be liable for anything that happens on the property and any current taxes, association fees, or special assessments.

Even when you’re purchasing a tax lien, you still want to be sure that the property is worth a few times your initial investment. Even though you don’t own the property, if the property is not worth anything (if you purchase a tax lien on an unbuildable lot, for instance) then you are not likely to get paid. Don’t forget, you may have other costs besides what you pay at the tax sale for your certificate. You will have recording fees, subsequent tax payments (in states that allow you to pay subsequent taxes), and if the lien does not redeem – foreclosure costs.

For both tax lien and tax deed properties, you’ll want to see the tax assessment data for the properties in the sale. Sometimes this is included in the tax sale list that you get from the tax collector, but in most counties it is not. Most tax sale lists will only list the parcel number, a legal description of the property (usually just the block and lot), the name of the owner, and the amount due. The tax assessment data is the data that the county or municipality uses to determine the tax value of a property. It includes the size and type of the property and the assessed value, as well as the owner and property address. Sometimes it will even include the market value and/or last sale price of the property. To find out if you can get this information online, go to the county website and search for the tax assessor’s web page. You might find a link to it there. If it is not available online, you may have to go to the tax assessor’s office to have access to it.

An easy way to get all of this information without doing any work is to buy a detailed list from a tax sale list provider. Sometimes these lists can be expensive; you’ll have to weigh the cost of the list against the value of your time. If you don’t buy a detailed list, you’ll have to do the research yourself, and that could take a lot of your time. To help you to determine if you should purchase a detailed tax list or do the work yourself, you can read my article "When to Buy a Tax Sale List." You can find it at http://tinyurl.com/28ujj2.

Once you have determined what the property is worth, your due diligence for tax lien properties is almost complete. All you have to do now is look at the property. You’ll want to physically look at the property and take a look at the property on a tax map if you can get access to one. Sometimes you can get the tax maps online; other times you will have to go to the tax assessor’s or mapping office. When you look at the tax map you will be able to see if there are any easements or rights of way on the property, or if the property is land locked. These are all things that you want to avoid. Once you’ve done this, your due diligence for tax lien properties is complete; but if you’re going to a tax deed sale, your work is only half done.

The next step in doing due diligence for tax deeds is to search for any liens that survive the tax sale for the properties that you’ve determined you’re going to bid on. First you have to know what liens survive a tax sale. This will be different for different states, and some states can have different types of tax sales. In some tax sales certain liens will not survive the sale and in others they will. It’s very important to know which type of sale you are bidding at! You can either pay someone to do a title search for you, or if you know how, you can do this search yourself.

Even if you find no other liens that survive the tax sale on the properties that you are bidding on, your work is not over yet. You must also make sure that proper notice was given to any lien holders for those liens that do not survive the sale. The reason that these liens do not survive the tax sale is that they’ve been notified that the property is going to be sold for back taxes, and they have been given the opportunity to pay the taxes and keep the property from being sold. If a lien holder did not get properly notified, they could come back later and contest the sale. So the last thing that you want to do as part of your due diligence before you bid on a tax sale property is check to make sure that proper notification was given to all lien holders.

If you follow all the guidelines and steps in this article you will be able to minimize your risk in investing in tax lien certificates and tax deeds. Yes, there are risks involved in tax lien and tax deed investing, but if you know what the risks are you can avoid them. One way to avoid these risks is in doing proper due diligence on tax sale properties before you bid. But remember, even if you do due diligence on the properties before you bid on them at the sale, something could still go wrong; there are no absolute guarantees. But then nothing that is worthwhile in life is completely risk-free. Just remember the old adage, "Buyer Beware."

Step Five to Building Your Profitable Tax Lien Portfolio

2007-02-05T14:40:00.000-05:00

This is the six article in a series of eight articles about how to build a profitable portfolio of tax lien certificates or tax deeds. If you missed the previous articles in this series you can read them at www.taxlienconsulting.blogspot.com.

Once you’ve done your due diligence on the tax sale properties that you intend to bid on it’s time to 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 close to the sale as a few minutes before it starts. I’ve even been to some sales in New Jersey where late commers are allowed to register and bid at the tax sale. 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. Nassue County, NY, for instance has a tax lien sale that typically is 3 days lonng. They have a registration fee of $100 for each day that you intend to bid and the registration fee is non-refundable.

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. You need to figure out ahead of time how much money you think that you’ll need. This can be a little difficult because you don’t know what properties are going to be left in the sale and you don’t know if you will be the successful bidder on any of them. Sometimes you will be allowed time to go the bank and get payment after the sale. In this case you will be able to go to your bank and get the certified funds in the exact amount that you need. When you’re not allowed the time to go to the bank, you will have to have the certified funds, made out to the county tax collector, with you at the sale. In this case, come up with your best estimate of what you think is the most that you will spend and get certified checks made up in different denominations that total the amount you think that you'll need. This way if you have to wait for a refund check from the county for your change, at least it won’t be for a very large amount. Make sure you check with the tax collector a couple of days before the sale to find out what the acceptable forms of payment are and whether or not you will be allowed to go to the bank and get a check after the sale.

Another thing that you’ll have to have with you for the sale is the proper paper work. In some states you will have to fill this out when you register and in others you will need to bring it to the sale. Most tax collectors will require a W-9 form and a bidder information sheet. The W-9 form is a standard IRS form and you can get it online at the IRS web site. The bidder information sheet is usually filled out during registration and has your personal information, or your business information if you’re investing with a business name. This form is not always stantardized and every county may have a different form. For most tax deed states there is another form that you will have to fill out if you are the successful bidder on a tax sale property and that is an affidavit of no taxes due for the county and/or state that you are purchasing a tax deed from. You see most counties will not sell a tax deed to someone who has unpaid taxes in their district. Sometimes a signed affidavit is all that is necessary, but in some states, as in Texas, the county clerk has to sign off on a statement verifying the fact that you do not owe any taxes.

This is a summary of step five to building a profitable tax lien or tax deed portfolio. In subsequent articles I will take each one of the remaining steps 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, go to http://www.taxlienlady.com/ProfitablePortfolio.html

When to Buy a Tax Sale List

2007-02-05T12:29:00.000-05:00

One of the first things that you have to do to invest in tax lien certificates or tax deeds is to get the list of properties that are in the tax sale. Sometimes you can find this list online, on the tax collector’s website. In most counties the list has to be published in the local paper 2-4 weeks before the sale. In states where tax sales are held on the municipal level, most of these lists will be small (less than 100 properties) and easy to manage. But in large cities and in states where tax sales are held by the county, these lists can be quite large. Although you can get these lists for free, there are times when you will want to pay for a detailed tax sale list from a tax sale list provider.

The tax sale lists that you get from the municipality or county do not always have the information that you need. Often, they will not include the address or physical location of the property. Usually these lists will only list the tax ID or parcel number, block and lot, owner of record, and amount due on the properties in the tax sale. It will not tell you things that you need to know before bidding on the property like: the acreage, type of property, assessed value, last sale price, and whether or not there is a mortgage on the property. To find out this information you can either go to the tax collector’s or tax assessor’s office and look it up yourself, or you can buy a detailed tax sale list that provides all of the tax assessment information, including the physical address of the property.

For smaller tax sales you may want to buy a detailed list. You might think that since the list is small, you could save the money and look it up yourself. I have found that this process is time consuming and that for small lists I am better off buying the detailed list. It saves me a lot of time in my due diligence; I get all the information that I need; and I only have to go out and look at the properties. For larger lists, I would rather do my own research. Detailed tax sale lists that are over 500 properties can cost over $50 and lists that are over 1000 properties can cost over $100. Large counties and counties with big cities can have lists of a few thousand properties and that can cost a few hundred dollars. So how do you decide whether you should buy the detailed list or do the research yourself for these tax sale lists?

First remember that if the original tax sale list has 1000 properties, there will probably be only 500 or so properties left on the day of the sale. Since most tax sale list providers do not update the lists that they have for sale, you will have to purchase the detailed information on all 1000 properties even though you will probably only use half of the information. If you choose not to buy a detailed list, then you may be doing research on a lot of properties for nothing, since half of them will not be in the tax sale.

So here’s what I do. If there is an easy way to get the assessment information that I need, that is if it is available online, I wait until about 4 or 5 days before the sale, get an updated list from the tax collector, and then I get the assessment information on the properties. To make it even easier, I limit the properties that I research to only certain areas that I’m interested in investing in. I may limit it to only 3 or 4 townships in the county and to only certain types of properties. If the assessment information is not that readily available, I’ll buy the detailed list. Some list providers will allow you to filter the list by property type, thus you only buy information on the type of properties that you are interested in.

To find out more about the steps involved in building your profitable tax lien or tax deed portfolio, go to http://www.taxlienlady.com/ProfitablePortfolio.html.

Step Four to Building Your Profitable Tax Lien Portfolio

2007-01-22T13:11:00.000-05:00

Once you’ve completed the first three steps in the process of building your profitable tax lien portfolio, your real work begins. Now that you know where you’re going to invest and you have the tax sale information and have a list of the properties that are in the sale, you can progress to step four to building your profitable tax lien portfolio, which is doing due diligence on the properties in the sale.

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 on your investment. You need to do due diligence on tax sale properties before you bid at the tax sale. 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 will have to be a little more rigorous when doing due diligence for tax deeds than you than you do for tax liens.

When you buy a tax lien, you are not buying the property, you are only paying the taxes and putting a lien on the property. But when you buy a tax deed, whether it is a regular tax deed or a redeemable tax deed, you are actually purchasing the property and you are now the owner of record. That means that you are now responsible for paying the taxes and any assessments on the property and you are liable for anything that happens on the property. If there is an environmental problem with the property, you're responsible for cleaning it up and that could cost you more than any profit that you might make on your investment.

Another reason that you’ll want to check out tax sale properties for deed sales a little more rigorously than tax lien properties is that not all tax deeds are sold “free and clear” of any other liens. You may have been told that when you buy a property at a tax deed sale you are not responsible for any other liens on the property, like an existing mortgage, for instance. Depending on the state, this may or may not be true. Different states have different laws regarding what liens survive a tax sale. You need to know if there are any types of liens that do survive the tax sale and you need to look for them before you bid on a property in the sale. Even for liens that do not survive the tax sale, you still need to check to see that proper notification was given to all lien holders. If proper notification was not given to a lien holder before the tax sale, the lien holder could contest the sale.

Whether you are investing in tax liens or tax deeds you will still have to find the value of the property to make sure that it’s worth it. You do not want to buy a tax lien certificate on a property that is not worth a few times your initial investment. You have to plan on your expenses for recording your tax lien certificate, paying subsequent taxes for the duration of the redemption period (in states that allow you to pay them), and any foreclosure costs that you might incur if the lien is not redeemed. The property should be worth at least 3 times what you determine your investment will be, taking all these expenses into account.

You can use one of two different methods to find the value of tax sale properties. You can find the tax assessment data, or you can check with a web site that gives recent sales prices of properties in the area. Some states have assessment data online. If the tax assessment information is not online, you will have to make a trip to tax assessor’s office to find the information that you need.

This is the fifth article in a series of eight articles about the seven steps that you need to follow in order to build a profitable portfolio of tax lien certificates or tax deeds. If you missed the previous articles in this series you can read them on this blog.

For more information about how you can build your own profitable tax lien portfolio, I invite you to listen to my mini seminar at www.taxlienlady.com/ProfitablePortfolio.html.

Organizing Your Business for Success

2007-01-22T12:47:00.000-05:00

Report From the Women's Power Summit - Part 3

In my first two articles on the Women’s Power Summit, I summarized presentations from Jeanette Cates, the Technology Tamer and Loral Langmeier, the Millionaire Maker. I consider both of these women to be my mentors, since I have taken their courses, read their books, and heard them speak before, though I had never met them in person. So of course I was looking forward to meeting these two very successful women that I continue to learn from. But the presentation that I really needed to hear at the Women’s Power Summit was “How to Play to Win with Your Business,” given by Barbara Hamphill.

Barbara Hamphill is a nationally renowned professional organizer. She is a past president of the National Association of Professional Organizers and has appeared on many television shows including Today, Good Morning America, and CBS This Morning. She is a sought after speaker and who counsels major corporations on organizing for efficiency. She is the creator of Taming the Paper Tiger Software and the Author of Taming the Paper Tiger at Home and Taming the Paper Tiger at Work. Her presentation, “How to Play to Win with Your Business,” was all about how to organize your business for success.

Her organizing SYSTEM is an acronym for Saves You Space, Time, Energy, and Money. According to Ms. Hamphill there are three essential components to any system of organization. Your individual methodology, or a way to think about organizing that works for you. Tools that you will need to get organized. And maintenance, which is the actual system that you will use to stay organized. Ms. Hamphill argues that there is no one organizing system or method that works for everybody, but that you have to find a method that works for you.

Start with a productive setting or environment. A productive environment is one in which everything around you supports who you would like to be. One of her favorite statements in her organizing seminars is “have nothing which you do not know to be useful, think to be beautiful, or love.” You know that you have a productive setting when there is no clutter, there is a place for everything, you can find anything you need, and you have a beautiful environment.

Although there is no one “system” that works for everyone, there are six tools that everyone needs to have in order to get organized. Barbara calls them the “magic six.” These consist of: your desk top tools, she recommends a 3 tired box consisting of an in box, an out box and a “to file” box; your waste basket; your calendar, which is actually three different calendars – a planner pad, your personal calendar and your family calendar; your database; your action files; and your reference files.

Barbara teaches the FAT system to get rid of clutter. FAT stands for File it, Act on it, or Toss it. She says that when it comes to clutter, these are the only choices that you have. One of the skills that you need have in order to deal with the clutter in your home or office is something that she calls “the art of wastbasketry.” When you go through the mail or anything that comes into your inbox, ask yourself these questions:

Does it require action?
Is it recent?
Is it difficult to get again?
Does it have legal or tax implications?
Does it have a specific use?

If you answer yes to any of these questions either file it or act on it. If you answered no to all of these questions, then ask yourself what is the worst possible thing that could happen if you tossed it out. If you and your organization can live with the consequences, then toss it, if not, file it.

For more help in the clearing clutter and getting your home or office organized, you can read one of Barbara Hamphill books. Her books are also available on CD and she also has a Taming the Paper Tiger software program.

This is the third article in a series about the Women’s Power Summit that was held in Atlanta in October of 2006. If you missed the previous articles, you can read them on this blog.

Joanne Musa is a tax lien investing consultant and creator of taxlienlady.com, an educational web site to help people that want to learn how to invest in tax lien certificates and tax deeds. To find out more about tax lien investing, go to http://www.taxlienlady.com/.

Step Three to Building Your Profitable Tax Lien Portfolio

2007-01-07T12:59:00.000-05:00

This is the fourth article in a series of eight about the seven steps that you need to follow in order to build a profitable portfolio of tax lien certificates or tax deeds. If you missed the previous article in this series you can read them at http://www.taxlienconsulting.blogspot.com/.

Once you determine where you are going to invest, the next step in the process to building your profitable tax lien portfolio is finding the tax sale information. 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.

In my e-book, Tax Lien Lady’s State Guide, I tell you who to contact in each state to find out about tax sales. I also give links to the state and county web sites. I recommend that you first contact the county tax collector, or whoever is responsible for the tax sale and ask for the tax sale information. Ask for a list of tax sale properties. Usually you can get this list for free and sometimes you can even get it online.

All tax sale lists are not created equal. Some lists will have all the information that you need to do your due diligence (the next step in the process of building your profitable tax lien portfolio) and some will only list the properties tax number, block and lot, owner of record, and amount due. It may not even include a physical address. If that is the case, then you have two choices, you can buy a detailed tax sale list that includes all of the information that you need, or you can look the information up yourself, which can be a very tedious process.

Very large detailed tax sale lists can be quite expensive, even a few hundred dollars, so if there are a lot of properties in the tax sale you would be better off to limit the amount of properties that you are interested in and look up the information that you need yourself. You can limit yourself to a particular area or to only certain types of properties to make the next step in the process a little easier. If the list is not that large and costly you may want to buy the tax sale list from a tax sale list provider. It will save you lots of time in doing your due diligence. This is a summary of step three to building a profitable tax lien or tax deed portfolio. In subsequent articles I will go over the remaining four steps to building your profitable tax lien portfolio 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.

Step Two to Building Your Profitable Tax Lien Portfolio

2006-12-29T15:53:00.000-05:00

This is the third article in an 8 part series. If you missed the first two articles in this series you can read them at http://www.taxlienconsulting.blogspot.com/.

Once you’ve completed the first step to building your profitable tax lien portfolio and you know what your purpose is for investing, you can move on to step two in this process, which is to 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.

The easiest thing for you to do would be to invest in the state that you live in. If you want to invest in tax liens and the state that you live in only sells deeds, then you might want to look at a nearby state, or perhaps a state that you like to vacation in. Maybe you could write off your next vacation if you attend a tax sale while you’re vacationing. I believe that it’s always best to invest in areas that you know, so I think that it’s better to invest in your own backyard. Some states, for various reasons, are just not good places to invest in tax sale properties. Either the laws in that state are not favorable to the investor, or there is not much available, or they may not have any tax sales at all. In that case you may have to go to a different state and an area that you know absolutely nothing about. I suggest that you find someone who is familiar with that area and partner with them. There are different ways that you could do this. You could form and LLC or Partnership with them and split the profits of your investments or you could just hire them to do the footwork for you.

I am frequently asked about investing online and through the mail. People want to know if they can invest in tax liens or tax deeds without actually going to the sale. There are some states where you can do this, but I don’t recommend it unless you can look at the tax sale properties or have someone that can look at them for you. Although you can do some of your due diligence online, I always recommend that you physically look at the property. I’ve been burnt, early in my tax lien investing endeavors, by not looking at the property before I bid on it. I still have a couple of worthless lots in my tax lien portfolio.

This is a summary of the second step in a 7 step process necessary to building a profitable tax lien or tax deed portfolio. In subsequent articles I will take each of the remaining 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.

Step One to Building Your Profitable Tax Lien Portfolio

2006-12-20T12:49:00.000-05:00

The first step to building a profitable portfolio of tax liens or tax deeds is to decide on the purpose of your tax lien or tax deed investment portfolio. Why do you want to invest in tax liens or tax deeds in the first place? Your reason for investing will determine what type of investment will be best for you; tax lien certificates, tax deeds, or redeemable tax deeds. It will also be the determining factor in deciding where you will invest and in forming your bidding strategy and how you will profit from your investment later on. Basically everything that you do to develop a profitable portfolio of tax liens or tax deeds will be based on this decision.

Do you want to invest for your retirement? If so, you may want to invest with before tax money in a self-directed IRA. If current income is your goal for your investment portfolio than you will want to use after tax money to invest and you may want to invest through a corporation or LLC so that you can pay any expenses related to your investing out of that income before you’re taxed on it.

Keep in mind that income from tax liens and tax deeds may be treated differently. Interest income from tax lien certificates is reported as interest income on a 1099 form. Income that you receive from the sale of tax deed properties would be treated as capital gains if you hold the property for at least a year before you sell it.

Are you building a tax lien portfolio because you want to obtain properties for back taxes? If so, you are better of with tax deeds or redeemable tax deeds. The chances of actually foreclosing on a tax lien property and getting the property are pretty slim. In some states if your tax lien does not get redeemed within the redemption period, the property will have to go to a deed sale and the property will go to the highest bidder. Then you will be paid on your lien along with any interest and penalties. This is the second article in an 8 part series. If you missed the first article in this series, “7 Steps to Building Your Profitable Tax Lien Portfolio,” you can view it here. 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.

Report on the Women's Power Summit - Part 2

2006-12-20T12:35:00.000-05:00

In part one of my report on the Women’s Power Summit, I summarized a presentation by Jeanette Cates, the Tech Tamer, on how to play to win with your expertise by creating cash flow from what you know. In this article I’ll introduce you to another one of my mentors, Loral Langmeier, The Millionaire Maker. Loral gave a presentation on how to play to win with your money.

Loral Langmeier grew up on a farm in Nebraska. At a very young age she decided that she was going to be a millionaire. She started her first business at the age of 17 and at the same time started working with mentors in the finance and wealth industry. She set a goal to be a millionaire by the time she was 35 and actually became a millionaire when she was 34. Among her mentors are well know personal success guru Bob Proctor and financial educator Robert Kiyosaki. She is the author of the best seller, The Millionaire Maker, and her new book, The Millionaire Maker’s Guide to Wealth Cycle Investing. Now a multi-millionaire, she is a master coach and financial strategist who has helped thousands of individuals take control of their finances and become millionaires. She is the founder of Live Out Loud, a coaching and seminar company that teaches her trade marked Wealth Cycle program.

Loral’s approach on “how to play to win with your money” is refreshing and different from what you may have heard from other wealth building gurus or financial planners. One mistake that she sees people making with their money is paying down their debt first. Many financial planners will tell you to get out of debt and they make that a priority over saving and investing. Loral says that once you pay down your debt, you have nothing. Now you have no debt, but you also have no savings and no assets. The thing to do is work on accumulating assets that will pay your debt. Then when your debt is paid off you have assets that are generating an income for you.

Another thing that a lot of people don’t do right is that they try to do everything themselves. Loral says that there really are no “self-made” millionaires. She say’s that millionaires make their fortunes by relying on a lot of advisors and support people. They do it with the help of a “team.” She claims that in order to get the best and highest use of your time you should strengthen your strengths and hire your weaknesses. In other words, hire out the things that you do not do well or do not like to do – don’t spend time and money learning how to do them yourself. Instead, work on strengthening the skills that you are good at and enjoy doing.

In order to make $100,000 per year, you need to make $400 per day. Ask yourself, “What am I going to do to make $400 a day?” In order to make $400 a day, you will need to say “no” to some things and “yes” to others. What are you willing to say no to and what are you willing to say yes to in order to meet your goal? For example, meeting your goal may mean saying yes to things like; spending time with successful people, getting your life supported by hiring a house cleaner or organizer, and building a team for success. It might mean saying no to; negative people, negative thinking, and using negative language.

You’ll need to have specific goals about what you want your net worth to be, what assets you want to have, and how much you want to make. Your goals might look something like this:

Have a net worth of 1.8 Million
Own 4 Million in real estate
Have a passive income of $120,000 per year
Have nationally diversified assets
Pay no taxes

Now ask yourself, “What are the non-negotiable activities that I need to do each day in order to reach my goals?” These activities should include journaling each day and spending time with like-minded people. Another question to ask yourself is, “Who do I need on my team right away in order to meet my goals?” Your team may include; a house cleaner, an organizer or assistant, a marketing or sales person, a bookkeeper, and a CPA.

Most of the things that we have been talking about so far have to do with what Loral refers to as your “Cash Machine.” Your cash machine is just on of the building blocks in Loral’s wealth building cycle. To find out more about Loral’s Wealth Cycles and to find out how you can become a millionaire, read Loral’s books The Millionaire Maker and The Millionaire Maker’s Guide to Wealth Cycle Investing.

7 Steps to Building Your Profitable Tax Lien Portfolio

2006-11-30T14:17:00.000-05:00

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.

Selling Your Tax Lien Certificates

2006-11-03T07:07:00.000-05:00

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/.

Report on the Women’s Power Summit – Part 1

2006-11-03T06:42:00.000-05:00

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

Tax Deed Investing: Are You Making These Costly Mistakes?

2006-10-22T20:50:00.000-04:00

Recently someone asked me what would happen if they purchased a tax deed in an “upset” tax sale in Pennsylvania that had a mortgage on it; would they be liable for the mortgage? Pennsylvania actually has three different tax deed sales and while most liens do not survive the judicial sale and the repository sale, all liens do survive the upset sale. This means that if you purchase a tax deed at the upset sale you are liable for any other liens on the property. You would have to pay these liens or risk loosing the property. If you bought this deed in your own name, your credit would also be affected if you do not satisfy these liens.

A person is this situation has made three costly mistakes that many first time deed purchasers make. Their first mistake was not checking into the state laws for deed sales. Each state has different laws regarding tax foreclosure sales. In most states other liens are wiped out by a tax sale, but this is not true for every state and this is something that you need to know about before you bid on a property in a tax deed sale. Even in states where most liens are extinguished by a tax sale, some liens may survive the sale. You need to know what liens survive a tax deed or tax foreclosure sale in your state and you need to know how to check for these liens.

The second mistake made in this situation was not having done proper due diligence on the property and checking for other liens. While this step is not always necessary when you’re investing in tax liens, it is critical when you’re buying a tax deed. After you’ve purchased a tax lien certificate on a property, if you decide that you’ve made a mistake and the property is not worth it, you can always walk away and only loose your initial investment. You are not the owner; therefore, you have no liability. If however, you purchase a tax deed on a property, you become the owner of the property. You are now responsible for any liens on the property that survived the tax sale as well as for current taxes and assessments on the property.

The third costly mistake made in this situation was buying the property in the investor’s name instead of in the name of a business entity. Because the tax deed was purchased in the investor’s name, they became personally liable for the property and any other liens held against it. As the owner of record, they would also be liable if anyone got injured or hurt on the property, and as mentioned in the previous chapter, they are also responsible for current taxes and any other assessments or association fees if the property is in a community. If they decide that the property isn’t worth it, they cannot just walk away and only loose their original investment. Now there is more at stake. If they had purchased the deed in the name of a business entity that they had previously set up for this purpose, however, they would not be held personally liable for all of these things.

To learn more about asset protection and business entities for tax deed investing you can download this free recording of a teleseminar interview that I did with Texas attorney and tax deed expert Darius Barazandeh. To download the replay of this teleseminar, just right click on the following link and choose “save target as’ to save it to your computer and listen to it any time you like. Here is the link: http://tinyurl.com/yabhn2.

To learn more about how to do due diligence for tax lien and tax deed investing and how to avoid the risks involved, check out my step-by-step audio course at www.taxlieninvestingsecrets.com.

Tax Lien Investing: Are You Making This Critical Error?

2006-10-22T20:44:00.000-04:00

Recently I got a question from someone who was looking into getting involved in tax lien investing in the state of Indiana. She was surprised at the amount of money being paid for tax lien certificates and was wondering if it was worth it. It seems like the people that she was getting involved in tax lien investing with were making some of the typical mistakes that new investors make. They were buying liens on “junk property” and she could not see the benefit to this. Also she witnessed institutional buyers bidding large premiums for tax liens and couldn’t understand how they are making a profit on their investment.

The reason for her confusion has to do with the type of bidding method used (premium or “over-bid”) in Indiana and the Indiana state laws that govern the tax lien investing process. What she witnessed in Indiana is extreme competition due to favorable state laws for tax lien investing. In Indiana there is a hefty penalty (10 – 15%) on the certificate amount and you do get interest on the premium or “over-bid” amount if the lien is redeemed. You also get interest (10% per annum) on any subsequent taxes paid as well. The redemption periods vary from county to county, but are short - from only four months to one year. And all you have to do to foreclose is petition the court for the deed to the property. Everything has to be done in a timely manner however, or you could loose your claim on the property.

When most new investors go to these sales and see the large over-bids paid for tax liens, they assume that the companies and investors that are paying these large amounts are doing so in hopes to foreclose on the property. While occasionally that might be true, whenever you see banks doing this there is usually another reason for it. Banks do not want to be in the property management business, they want to invest their money at higher returns than then they can get by lending it out, and they wish to diversify their investments. The reason why they are paying so much for these tax liens is because it is worth it – they are making good profits on their investment.

Because they have the ability to let large amounts of money sit in an investment, institutional buyers can bid large amounts on properties that they think will redeem. And because they have done their due diligence on these properties, they know that even if the property doesn’t redeem they will be able to sell it and make a hefty profit. The danger for new investors is that they see these institutional lien buyers and other seasoned investors paying large premiums for tax liens and they start paying large premiums for tax lien certificates on properties that they did not check out. Maybe they heard about tax lien investing from a real estate guru who touted tax lien investing as being totally risk free and “government guaranteed.” What they need to realize is that no one guarantees that you will get paid on a tax lien certificate and that the only thing guaranteeing the lien is the property. Therefore the property better be worth more than what you paid for the lien. And because you will have other expenses involved in your investment and you will have to pay subsequent taxes, the property should be worth a few times what you paid for the tax lien certificate.

If you are considering tax lien investing you might want to read all of the articles on the article page of taxlienlady.com at www.taxlienlady.com/articles.htm, and the rest of the articles on this blog. Here you will find a wealth of free information about how to due diligence for tax lien investing and how to determine if tax lien investing is right for you. If you want more detailed information about how to start investing in tax lien certificates and tax deeds you may want to take a look at my step-by-step audio course at www.taxlieninvestingsecrets.com.

For more information about tax lien investing you can also send an e-mail to MoreTips@taxlienconsulting.com.

Happy and Prosperous Investing,

Joanne Musa

More Book Reviews from the Tax Lien Lady

2006-10-09T16:08:00.000-04:00

Here are my reviews of three of the books that I have read in the past couple of months. These books are not about tax lien investing but about building wealth, becoming successful at your business and successfully marketing your business. I found each of them to be very helpful to me and I thought that you would like to know about them. You can find all of my book reviews on Amazon.com. You can order any of these books, or find out more about them, by clicking on the title of each one.

Outrageous Business Growth by Debbie Bermont

A Must Read for Business Owners and Entrepreneurs
In Outrageous Business Growth, Debbie Bermont explains each of the three principals that make up her formula for business success. She starts with explaining how to develop an internal prosperity consciousness, so that your business will thrive no matter what is going on in the economy. She than shows you how to align yourself only with people who want to buy your products or services so that you don't waste time and money advertising to the wrong market. Finally she explains how to develop lifetime relationships with your customers to create customer loyalty and increased sales for your business. This version of the book comes with a free one year e-subscription to Outrageous Business Growth Weekly, a $97.00 value.

The Millionaire Maker by Loral Langemeier

Best Book About Money
Out of all of the books that I have read about how to make and manage money - this one is by far the best! Loral Langemeier actually shows you step-by-step how to develop your own plan for becoming a millionaire. In The Millionaire Maker, she explains her system for developing wealth, which is very different from what most financial professionals advise their clients. She explains each of the components of her "Wealth Cycle" in detail by using real life example from her clients. This book will show you how to get out of debt while building your net worth, how to create a business to give you more money, and how to get your assets working harder for you - creating passive income. This book comes with two free tickets to see Loral live at her Team Made Millionaire event. These tickets are worth at least ten times the price of the book.

Web Wonder Women by Lynne Klippel

A Must Read for Women in Business
Wow, this book is excellent! A must read for any women in business. Not only is Web Wonder Women an inspiration to all women, but it's a great place to find services from other woman owned businesses, and it's a great place to find Joint Venture partners. I purchased this book because it highlighted a couple of my mentors. After reading Web Wonder Women, I've found more mentors for other areas of my business and my life. This book is just chock full of ideas to help your business, tips on how to get started in different businesses, managing your time, balancing your life, and marketing your business. I am really enjoying the bonuses that come with this book. There are so many that I haven't taken advantage of all of them yet. The bonuses that you get when you purchase Web Wonder Women are worth many times the price of the book!

Five Things to Look for in a Tax Lien Investing Coach

2006-09-26T15:13:00.000-04:00

No doubt you've heard the saying "buyer beware." You've probably heard me apply it in one of my teleseminars, articles, or e-books to buying tax liens or tax deeds. Well it also applies to buying information and coaching for tax lien investing. I just heard from one of my subscribers who was looking for information online on how to get started with tax lien and tax deed investing. She came across a company that was supposedly had a 12 week coaching program on how to buy tax deeds. They wouldn't give her any details about the program until she gave them a credit card number and paid the $4000.00 up front for the course.

Fortunately she didn't have her credit card with her and when she got off the phone with them she sent me an e-mail. After some e-mailing back and forth I asked for her phone number and gave her a call. On further investigation of this companies web site, it was evident to her that they really do not teach you how to buy properties at tax sales. Instead they coach you on how to approach owners of properties that are in the tax sale and try to get them to "sell" their property to you at a discount. In some states, this could be illegal! Though the tax sale list is published in the local paper and is public information, in many states it is published with a caveat that says that the list is not to be used for solicitation. Many states are trying to stop loan sharks from taking advantage of the delinquent tax payers.

I happened to get her e-mail right after doing a teleseminar/interview with Steve Waters, a well known tax lien investor and coach. He has a great coaching program for tax lien investing and tax deed investing. His program delivers results. I know because I am one of his former students. His program is also very affordable ($197.00). The value that his program delivers is worth more than 10 times the price!

Please don't pay thousands of dollars for information on how to invest in tax lien certificates and tax deeds unless the coach that your working with is actually going to take that money and invest it for you! This is money that you can use to invest. I've interviewed some of the best tax lien and tax deed coaches in the country. They have great home study programs that come with coaching and they're always available to help you and answer your questions. Here are five things that you should know before hiring a tax lien or tax deed investing coach.

5 Things You Should Know Before You Buy a Coaching Program

Identify who you will be working with and what their experience is

Every state is very different in the way that tax sales are held. some states sell tax liens and some sell deeds and some sell redeemable deeds. Each of these are completely different. Lien States have different bidding procedures. There are at least 5 different bidding procedures with variations on each. It is important that you have a coach or mentor that is familiar with the bidding procedures in your state. Deed states differ in how the deed is conveyed and in what liens survive a tax sale. This is important information that could be the difference between buying a profitable deed and loosing money on your investment. Make sure that your coach has experience in the state that you are investing in.

Know what you are paying for - Will you get ongoing support?

Just one coaching session is not likely to be enough to get you started purchasing tax lien and/or tax deeds. How many sessions will you get? Will you get any support materials such as access to a web site with resources that will help you with due diligence, or an e-book, or audios? You should. In my experience phone in teleseminars where anyone can call in and ask a question is not enough to give you the information that you need to get going and take some action. You either need some one-on-one consultation or some type of intruction (like a course or e-book) in addition to the opportunity to ask questions.

Will your coach or mentor be available to answer your questions?

Once you have enough information to get out there and start doing it, your going to come accross situations that bring up questions that you haven't thought of before. You want someone who will be available to answer your questions as they come up. Make sure that your coach or mentor will be available to you, either by phone or by e-mail, and that they will get back to you in a reasonable amount of time. I think that within 24 hours is reasonable.

Beware of guarantees that promise you will make a certain amount of money in a short time.

Nothing in life is guaranteed, especially high yeilding investments. There has to be some risk involved or the return wouldn't be as good. Completely safe investments do not deliver high returns, and they are not as safe as we think they are either. Your mentor might be able to guarantee that the information that they give you is good information, but they cannot guarantee that you will make a profit on your investment. So much of that is up to you, the one who is doing the investing! I to suspect high priced coaching programs with outrageous claims - for instance, that gaurantee that you will make $10,000 in a few months or they'll return your money. Make sure you get that in writing!

Tax liens and tax deeds are not a get rich quick type of investment. You may have to wait a few months before you see any return at all, and in some states you may have to wait two or three years to see a return on your investment.

Does your coaches reputation depend on your success?

If it does then you have a better chance of succeeding. Someone who works for a large organizatiton may not have their reputation at stake. When you work with someone who has a reputation to protect as a tax lien or tax deed investing coach that gets results, they will work harder to insure your success. But ultimately it's up to you. Are you really ready to put in the time and money necessary to succeed at tax lien investing. If not, don't hire a coach or mentor because that would just be a waist of both of your time. To find out if you're ready read my article Tax Lien Investing: Are You Ready to Get Started?

Tax Lien Investing Secrets Revealed!

2006-09-13T13:45:00.000-04:00

You haven’t heard much from me lately. I’ve had my nose to the grindstone finishing a brand new product that is going to blow your socks off! You see, I’ve just finished revising my first ever all comprehensive home study course on investing in tax lien certificates and tax deeds.
Here are just a few of the things I’ve put into this course:

Four Audios – to take you through everything you need to know to go to your first tax sale, from the difference between tax liens and tax deeds to where to find out about tax sales, to how to do due diligence, how to prepare for the sale, various bidding procedures, and what you need to do after the sale to protect and maximize your investment.
A Manual to go along with the audios – with all the information that is given in the teleseminars plus resources, forms and articles to help you get ready for your first tax sale IN RECORD TIME.
Checklists - One for doing due diligence for tax liens and one for preparing for your first tax sale, step by step guides so that you know exactly what you have to do when.
A bonus teleseminar on the investing tax free through a self directed IRA. This is a recording of a teleseminar interview with Liz Koos, retirement plan specialist with Equity Trust Company. In this seminar Liz reviews the five steps that you need to take in order to invest in tax lien certificates or tax deeds using your IRA.
Even more resources in my State Guide – to make it easier for you to find the information that you need about tax sales in every state in the US.

And a lot of other additions that will explode your profits in tax lien investing!
Whether or not you’ve considered investing in tax lien certificates or tax deeds before, now is the time to take a look at this course. You won’t find a faster method for getting started! And with my new audios, manual, and other features you can be up and running, going to your first tax sale and purchasing profitable tax lien certificates or tax deeds IN ONE WEEK!
Get all the details at:
Tax Lien Investing Secrets II

Happy and Prosperous Investing,
Joanne

Tax Deed Investing: What is an “Upset” Sale?

2006-09-13T13:33:00.002-04:00

In Pennsylvania, some counties have two different tax sales; the “upset” sale, and the “judicial” sale. If tax sale properties are not sold at either of these two sales, the property then goes on the “repository” list and can be sold by private bid. The upset sale is held every year in the fall. It’s called an “upset” sale because the minimum bid for the properties in this sale is known as the “upset” price; which includes any unpaid taxes from the county as well as any municipal liens. If a property is not sold in this sale, it is sold in the “judicial” tax sale in the spring. Not all Pennsylvania counties have judicial sales but they all have an upset sale.

What you may not know about the upset sale is that all properties are sold subject to any liens or judgments. That means that if you purchase a tax deed at this sale, you are responsible for any other unpaid liens or judgments on the property. Most people assume that when they buy a property at a tax sale, that they don’t have to worry about other liens such as a mortgage. This is not true at the upset sale. If you plan on bidding at any of these sales this fall, you’d better do your homework!

So how do you find out about other liens or judgments on tax sale properties? There are two ways that you could do this; one is going to cost you some money and the other is going to take some of your time. The first way is to hire a title search company to do a simple title search on all of the properties in the sale that you are interested in bidding on. This could turn out to be a little costly, so it’s not my method of choice. Another reason why I don’t hire a title search company to do title searches for me before the sale is that many of the properties will come off the sale list the day before or the morning of the sale. You may pay for a few title searches that you don’t even need because the properties that you wanted to bid on are not sold at the sale.

Last time I went to the Monroe County Upset Sale, I didn’t even bid on any properties. I researched about 10 of the properties in the sale that were in an area that I was interested in. Through my research I narrowed this down to only two properties that I wanted to bid on. I did all of my research the day before the sale and I had checked that morning to make sure that all of these properties were still in the sale. But by the next morning (the morning of the sale) the two properties that I was interested in had paid and were no longer included in the sale. I’m glad that I did my own research and did not pay a title company to do it!

That brings us to the second method for finding out about liens and judgments on tax lien properties, and that is to do it yourself. There is a little bit of education and some time involved, but it is well worth it. In most states, to do this type of research you would go to the County Hall of Records. In Pennsylvania the office that has the records that you need to search is the office of the Prothonotary. The people in this office are usually very helpful and will help you to look up what you need to know. You’ll have to look for liens and judgments by the name of the owner. If there are co-owners or joint owners, you will want to search under both names.

Keep in mind, however, that if new liens were not yet recorded they could slip through the cracks in the system and you won’t be able to find them. There is always some degree of risk when you buy a tax deed, even if you are careful and do your homework. This is why it is always recommended that you do not buy tax deeds in your own name, but in the name of a separate entity. It could be a corporation or an LLC. If you need help forming a corporation or LLC for the purpose of buying tax deeds, I know of two excellent programs to help you. They were both created by Darius Barazandeh, Texas attorney and tax deed expert. You can find out more about these programs, Incorporate for Wealth, and The Wealth Building LLC on the resources page of taxlienlady.com.

Happy and Prosperous Investing,
Joanne Musa

Tax Lien Investing: Investing Online and by Mail

2006-08-16T10:41:00.000-04:00

One of the questions that I frequently get from visitors to my web site, www.taxlienlady.com, is “Can I invest in tax lien certificates online or through the mail?” Many people want to invest in tax lien certificates but do not have the time freedom to physically attend the tax sales, so they want to do it online or by mail. A couple of tax lien states do hold online tax sales, and a few will allow you to mail in your bid. I don’t, however, recommend investing in tax lien certificates by mail or online unless you can look at the properties or have someone else look at them for you.

First let’s talk about online tax sales. As tax lien investing has become more popular with the average person (it’s not just the secret of the wealthy anymore), it’s also become more competitive. Over the last three or four years, in states where the interest rate is bid down, the bidding has been going lower and lower – as low at .25% in some sates. And in states where the amount of the lien is bid up prices have been bid higher and higher. Online auctions increase the competition even more. Now instead of bidding against every interested party who can come to the sale, you’re competing with every interested party with a computer.

Three things happen at these online tax sales. First of all a lot more bidders show up because all they have to do is get to their computer to register for the sale. Secondly, more money – or lower interest rates are bid for tax lien certificates because there are an increased amount of bidders. And thirdly more properties are sold at these sales. You see, at most tax sales there are “left-over” liens that no one bids on that go to the county. A lot of these properties are junk properties. They are really not worth anything and that’s why the owner stopped paying the taxes. Any bidders that have done their due diligence will know this and will not bid on these properties. But when sales are held online these properties will typically be sold. Don’t you be one of those online bidders who buys a tax lien on a worthless piece of property!

Would you purchase real estate that you didn’t look at first? Even though you are not purchasing the property when you buy a tax lien (you are only paying the past due taxes and penalties and putting a lien on the property), you still need to make sure that the property is valuable. There is always the chance that the lien will not be redeemed and that you will wind up with the property. And if you do have to foreclose on the property, you want it to be worth much more than you have invested in it. Your investment isn’t only the amount that you paid at the sale, but all of the subsequent taxes that you will pay until the redemption period is over, any legal fees and foreclosure costs, and any costs that you incur to fix up the property before you sell it.

Here is something else to consider if you decide to go ahead and buy tax lien certificates online anyway. You will pay more money for tax lien certificates online than you would at a regular tax sale. First of all you will have to have a hefty deposit just to register for the sale. If you do not purchase any liens your deposit will be refunded. If you do make a purchase the money will be deducted from your deposit. Even if you make a purchase by mistake, the money will be deducted and it will not be returned. If you do not complete the transaction you could be banned from any future sales. In addition to that you will have to pay the online auction company a commission, which could be as high as 10% of the purchase price of the lien(s) that you buy.

What about purchasing tax lien certificates through the mail? Many states do allow for purchasing of tax lien certificates through the mail. Most states allow this for their “left-over” liens and a couple of states will even allow mailed in bids for their tax sales. Buying tax lien certificates through the mail does not have all the problems that I described for online tax sales, especially if you are able to do your due diligence on the properties before placing your bid. You are, however, at a disadvantage when you mail in your bid for a tax sale. I suggest that you find out what the procedure is at the sale. If your bid is read out loud at the sale and those present at the sale have the opportunity to out bid you, than you are at a disadvantage. It is the investors who are present at the sale that have the advantage over you.

There are opportunities in some states that sell leftover liens (sometimes these are referred to as “over-the-counter” liens or “assignment” liens) that are available for purchase through the mail. Be very careful though to do your due diligence on these properties before you placing a bid. Very often, as I mentioned earlier, there is a reason that these liens were not purchased by other investors. If no-body else wanted it maybe there is something wrong with it! Check the property out before you buy. With tax lien investing, there are no refunds!

Tax Lien Investing: Are You Ready to Get Started?

2006-07-31T16:23:00.000-04:00

I noticed that many people that come to me to learn about tax lien investing don’t really have an understanding of what is involved. They under estimate two things – the amount of money needed to invest in tax lien certificates and the amount of time that is involved in finding profitable tax liens…

Let’s talk about the time involved in investing in tax lien certificates first. Tax lien sales in most states are usually held on weekdays at normal business hours, so you will need to have the time to go to the sale to bid on the properties that you are interested in. Even though in some states you may be able to mail in your bid, it’s to your advantage to be at the sale.

But this is less than half of the time that you will need to invest in purchasing profitable tax liens. Before you even get to this point you have to do some type of due diligence on the properties that are in the tax sale. The list of properties that you get before the sale from the tax office, in most cases, does not tell you anything about the property. Frequently this list will only consist of the tax ID, owner of record, and amount owed. It doesn’t even give you the location of the property!

So the first thing that you have to do is look up the assessment information on the property and find the address. You’ll want to physically look at the property to be sure that the assessment information is up to date. You want to make sure that the property is worth considerably more than the amount that’s owed for back taxes. Keep in mind that you may have to pay the taxes on this property throughout the redemption period (if it doesn’t redeem) before you can foreclose on it or apply for a deed.

This brings up the other factor that a newbie typically underestimates when they get started in tax lien investing, and that’s how much money is needed to invest in tax lien certificates. Frequently people tell me that they want to get started with less than $250.00. This is really not enough. Although you may not need as much to invest in tax liens as you do for tax deeds, you still need at least $2000.00 to get started. Even though you may be able to purchase a lien for under $200, you still need to pay the taxes on that property until the lien is redeemed. If you don’t, the property could wind up in next years tax sale and another investor could purchase that lien.

Tax lien investing is not like buying a savings bond or putting your money into a CD. You cannot take your money out if you wish to and you do not get paid any interest until the property owner decides to redeem the lien. If the property owner does not pay, than you have to wait out the redemption period and then go through a foreclosure process, or deed application process, before you get the property.

If investing in tax lien certificates is something that you want to do, then I recommend that you have at least $2000 that you know you will not need to meet any of your expenses to use for this purpose. I also think that you will need to have at least a few hours that you can invest in doing due diligence and bidding at tax sales. If you only have $2000, you may only be going to one or two sales each year and spending a few hours of your time every six months or so. If you really want to pursue tax lien investing aggressively, it is even better if you have $5000 - $10,000, and at least 10 hours per week that you can invest. This way you can attend more sales and purchase a few liens per year instead of just one or two. The more money and time that you can invest, the greater will be your return.

Don't Buy Tax Lien Certificates Until You Read This!

2006-07-11T16:30:00.000-04:00

Some real estate gurus make tax lien investing sound like it’s
a sure thing. That you’re guaranteed to make huge interest rates
and that’s it’s “government guaranteed.” Unfortunately for You,
they leave out a few facts and are stretching the truth quite a bit.

First you have to understand that tax sales are auctions and
in most state those extremely high interest rates are bid down to
extremely low rates. Why would investors do that? It’s simple,
sometimes there are other penalties that they will get should the
lien redeem. In New Jersey for instance the penalty is between
2-6% depending on the amount of the lien. In Florida there is a
penalty of 4%. Also once you own the lien, you can pay the
subsequent taxes and get the maximum interest on that.

Secondly, you must understand that there is no guarantee that
you will get paid on your lien. Of course if you don’t get paid,
you can foreclose once the redemption period is over. But no
one guarantees that you will be paid! What these gurus mean
when they say that tax liens are “government guaranteed” is that
the laws are on your side. If you don’t get paid you can
eventually foreclose on the property. The only thing guaranteeing
your investment is the property! That’s why I don’t recommend
investing in tax liens through the mail or online. Would you buy
property that you didn’t see first!

When you buy a tax lien certificate, even though you are not
purchasing the property, there is always the chance that the lien
will not redeem and you will have to foreclose on the property.
What if the property is worthless? What if it is an unbuildable
piece of land? Then you are stuck with a worthless piece of
property that no one will want to buy from you and if you don’t
continue to pay the taxes on it, it will eventually revert back to
the county that sold it to you.

Yes, there are risks involved in tax lien investing and no, it is not
a sure thing. It is however an excellent way to invest your money
if you know what you are doing. If you are contemplating buying
a program to learn how to invest in tax lien certificates or tax
deeds, beware! Don’t buy an e-book, coaching program, or a
course from someone who candy coats the business of investing
in tax lien certificates and tax deeds and makes it sound like you
can’t fail and there are no risks. The truth is that you can fail and
there are risks to avoid. Instead buy one of these products from
someone who tells you what the risks are and how to avoid them.
This will give you a better chance for success in buying profitable
tax lien certificates and tax deeds.

3 Tools for the New Jersey Tax Lien Investor

2006-07-10T01:24:00.000-04:00

For the new or seasoned NJ Tax Lien investor!

Whether you are looking into investing in New Jersey tax liens for the first time, or have been investing for years, here are 3 tools that can help:

*************************

The Book on investing in NJ Tax Liens.

TAX LIEN$, by Michael Pellegrino is the complete guide to investing in New Jersey Tax Sale Certificates. It is the only manual specifically on how to invest in New Jersey tax lien certificates!Learn how to make money by paying other people's taxes.In this book you will discover:
How to buy tax liens
How to choose the right liens
How to 'grow' your lien by paying subsequent taxes
How the foreclosure process works
What pitfalls to avoid
Copies of this new book ($19.95) can be ordered by visiting http://www.taxlienlawyer.com/ or contact the author, Michael Pellegrino, Esq at pell@caplaw.net or (973) 586-2300.

*************************

Who is having a tax sale and when? How do I get more info on each property?

LienSource, the Tax Lien Sale Data Service is the central resource for information on the 200,000-plus tax lien sales that occur in the state of New Jersey each year. LienSource provides:
A calendar showing the date every tax sale in the state as they are set
Name, address, phone information and more for all 566 municipalities
Enhanced Tax Sale Lists in a standardized layout in Excel format
Property –specific data for each item listed on every tax sale

LienSource is a vital tool in ensuring you make the best tax lien investing decisions possible.

Just visit http://www.liensource.com/ or call Steve Davis at (866) NJ LIENS (655-4367) to find out more and to register today!

We currently specialize in providing tax lien sale data to New Jersey, Nassau County, NY and Florida, but expansions are already underway for services in other Northeast states.

*************************

Are you ready to foreclose on one or more tax liens?

Then you need an attorney experienced in handling New Jersey tax lien foreclosure actions!

Contact Michael Pellegrino, Esq. at (973) 586-2300 or PELL@CAPLAW.NET or check out his web page at http://www.taxlienlawyer.com/

Texas Houses for Pennies

2006-07-01T17:22:00.000-04:00

Texas Houses for Pennies is the title of Tax Lien Lady's next teleseminar. For more information see my teleseminar blog at http://www.taxlienteleseminars.blogspot.com. Join us, It's Free!

Book Reviews

2006-06-28T15:12:00.000-04:00

Here are my reviews of some of the more prominent tax lien investing print books that are on the market. These books can be found on my resource page at www.taxlienlady.com/resources.htm.

Tax Lien$: The Complete Guide to Investing in Tax Liens in New Jersey
by Michael Pellegrino

5 stars - Must Have for Anyone Investing in NJ Tax Liens
This is a book that I refer to often for my tax lien investing in New Jersey. New Jersey has very complicated tax lien laws and has become a very competitive state to buy liens in. I recommend to anyone who wants to get involved in investing in New Jersey tax lien certificates that they read this book first. I found the chapters on foreclosure and what can go wrong very helpful.

Profit by Investing in Real Estate Tax Liens : Earn Safe, Secured, and Fixed Returns Every Time by Larry B. Loftis

4 stars - Great Resource
This book is a very good resource for tax lien investing and covers some states very well. Because state laws are so different and always changing, it's not feasible to write a book that has current information for every state. This book accurately describes tax lien and tax deed investing procedures for most states. I found this book to be the most complete book in print about tax liens that I have found and it even has some information on deeds. I strongly suggest this book to anyone who want to get involved in investing in tax lien certificates or tax deeds.

The 16% Solution: How To Get High Interest Rates by Joel S. Moskowitz

3 stars - Good for Basic Information
This is one of the books that I keep in my library, probably because when I bought it five years ago, it was the only book available about tax liens. Even though it's a newer addition then when it was first written, it's still dated and now there are other books available that are more complete. It's a good book for basic information about tax liens in the most popular tax lien states. Don't buy it if your interested in tax deeds, it has no information about tax deed states. Because state laws constantly change some of the information is no longer relevant.

Happy and Prosperous Investing,
Joanne Musa

Tax Lien Teleseminars

2006-06-12T09:45:00.000-04:00

Hi All,

I just created a new blog, just for information on my FREE tax lien teleseminars. My next teleseminar will be a one hour Q&A session with me. You can get the details at http://www.taxlienlady.com/teleseminar.htm, or check out my new blog at http://www.taxlienteleseminars.blogspot.com. I have a lot of great interviews with other tax lien and tax deed investing experts lined up for you this summer, so go to my Tax Lien Teleseminar blog and check it out.

Happy and Prosperous Investing,
Joanne Musa

How to Use Tax Lien Manager to Protect Your Investment in Tax Lien Certificates

2006-06-09T14:48:00.000-04:00

By Joanne Musa

You probably know that Tax Lien Manager can help you to do your due diligence and help you prepare for the sale, but did you know that it can also help you take the necessary steps to ensure that your investment is profitable?

The first thing that you need to do to ensure that your tax lien is profitable is to record your tax lien certificate with the County. Your tax lien certificate must be recorded in the county records, or it is worthless. In some states this is done for you and you pay a recording fee when you purchase your lien. In most states, including New Jersey, this is something that you will be responsible for and I suggest that you do it right away, as soon as you receive the tax lien certificate. With Tax Lien Manager you can print out a letter to send to the county clerk with your tax lien certificate(s). In the Lien Menu, select Current Liens and click on the Payments tab and the County Filing Letter button. You can use the drop down menus to include all of your tax liens for that county. You can keep track of the filing fees that you pay and print out affidavits to the tax collectors. You even have two different affidavit letters to choose from. Tax Lien Manager will even print the envelopes for you.

The next thing that you want to do to maximize your profit in a tax lien certificate is to pay the subsequent taxes on time. Tax Lien Manager can help you do this by letting you know when you can pay quarterly taxes. You’ll see the reminders for quarterly taxes on the calendar. Tax Lien Manager also provides you with a letter to the tax collector requesting the amount of subsequent taxes due. You can print this letter and either mail it or fax it to the tax collector. When you mail in your payment for subsequent taxes, include an affidavit printed out from Tax Lien Manager with your payment. All of these tasks can be done from the Payments Tab in the lien property information screen of Tax Lien Manager. You can even print the envelop using the Tax Collector-Envelopes button on this screen.

The third step in maximizing your profit is keeping track of when the redemption period is over for your tax lien(s). Tax Lien Manager will tell you when the redemption period is over for each of your liens. You’ll see the reminders on the calendar. Then you can decide if you want to continue to pay subsequent taxes and hold the lien longer, start the foreclosure process, or sell your lien to another investor.

With Tax Lien Manager you can print a request for a title search and mail or fax it to your title company. Just put the contact information for your title company into Tax Lien Manager by clicking on the Title Search Company button in the Table Maintenance Menu. Your request for a title search will then be atomically populated with your information and your title company’s information. You can even choose between several title search companies. You can also print a pre-foreclosure letter with Tax Lien Manager. If you decide to assign your lien to another investor or if your lien redeems, Tax Lien Manager can tell you the redemption amount of your lien. You can use this to set a price for your lien or to compare with the redemption amount that the tax collector gives you.

All of these tasks are done from the Acquisition/Redemption/Foreclosure tab in the Lien Property Information Screen. To access this screen from the Main Menu click on Liens and from the Lien Menu choose which group of liens you want to look at. Then you can choose individual liens in that group. Put your cursor on the lien that you want to change or view and click on the Change or View button. Now you are in the Lien Property Information Screen. The Acquisition/Redemption/Foreclosure tab lets you track redemptions, title searches and the foreclosure process. You can track bankruptcies and DEP issues with the with the Bankruptcy/DEP Issue tab.

Joanne Musa works with investors who want to reap the rewards of tax lien and tax deed investing. She is the author of the Tax Lien Lady’s E-books, Tax Lien Investing Secrets and Tax Lien Lady’s State Guide to Tax Lien and Tax Deed Investing. For more about tax lien investing e-mail MoreTips@taxlienconsulting.com. For more information about Tax Lien Managerä, go to http://www.njtaxliensoftware.com.

© 2005 Permission is granted to reprint this article in print or on your web site so long as the paragraph above is included and contact information is provided to the email provided.

Calculating Premium for Tax Lien Sales in New Jersey

2006-06-01T20:03:00.000-04:00

In order to calculate how much premium you can pay for a tax lien, you first have to know what your bottom line is. In other words, what is the lowest return that you are willing to accept on your investment? Then you can calculate just how much premium you can pay and still make the profit that you want. I use Tax Lien Manager, a software program for New Jersey tax lien investing created by DataVentures I LLC to do this for me. Tax Lien Manager computes premium for a 4%, 5% and 6% return based on the assumption that the lien will be held for a minimum of one year and that you will pay all subsequent taxes when they are due. Here’s how you can calculate how much premium you can pay if you don’t have software that does this for you like Tax Lien Manager.

Once you know the return that you want, you then have to know how many tax quarters are open at the time of the sale and what the annual taxes are. Let’s assume that you are going to a tax lien sale in August and that the municipality is on a calendar year. As of August 10th, you will be able to pay 3 quarters of open (subsequent) taxes on any tax liens that you buy.

When you pay premium for a tax lien certificate, your profit consists of the redemption penalty + the interest on your subsequent tax payments. Your total investment is the certificate amount + premium + subsequent taxes paid. Your total return on your money is total profit divided by your total investment:

Redemption Penalty + Interest on Subsequent Taxes
_______________________________________________

Certificate Amount + Premium + Subsequent Taxes Paid

For this example, let’s assume that the certificate amount is $2000.00 and the annual taxes are $4000.00. The redemption penalty is $2000.00 x 2% or $40.00. Since it’s after Aug 10th and you can pay 3 quarters of open (subsequent) taxes, interest on the subsequent taxes is 18% x $3000.00 or $540.00. Your total profit is $40.00 + $540.00 or $580.00. Your total investment without the premium is the Certificate Amount + Subsequent Taxes Paid or $2000.00 + $3000.00 = $5000.00. Calculate premium with a 5% return on your money as follows:

$40 + $540 / ($2000 + $3000 + X) = 5%, where X=premium.

$580 / ($5000 + X) = .05

Multiplying both side of the equation by (5000 + X), you get:

580 = .05 (5000 + X)

580 = 250 + .05X

Subtracting both sides of the equation, you get:

330 = .05X

Dividing both sides of the equation by .05, you get:

X = 6600, or premium = $6600.00.

This is a simplified equation and does not take into account interest on future subsequent payments. If the lien is held for one year and you keep paying the subs, your actual return will be higher. If you are using Tax Lien Manager, you will get a more accurate result based on paying one year of subsequent taxes.

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Joanne Musa works with investors who want to reap the rewards of tax lien and tax deed investing. She is the author of the Tax Lien Lady’s E-books, Tax Lien Investing Secrets and Tax Lien Lady’s State Guide to Tax Lien and Tax Deed Investing. For more about tax lien investing e-mail MoreTips@taxlienconsulting.com. To find out more about Tax Lien Manager, go to http://www.njtaxliensoftware.com/.

How Profitable is Your Tax Lien Investing?

2006-05-23T12:15:00.000-04:00

Do you know how profitable your tax lien investing is? In this article you’ll learn how to track your tax lien portfolio so that you know just how profitable you are at any time. Begin by entering all of your tax liens into a spreadsheet or software program. The best way to index them is by county/municipality, and tax ID (in New Jersey this would be block and lot). You’ll need a column or field for the certificate amount and a column or field to input the interest rate that you are getting on the certificate amount. You’ll also need to input any premium that was paid. You’ll need to have a formula to calculate the penalty amount and a formula to calculate the interest due. These formulas must also take into account how many days have lapsed since you purchased the tax lien certificate. You’ll also need to be able to track any subsequent taxes and the interest paid on them. And you will need a way to keep track of all of your expenses, both the expenses that are reimbursed upon redemption of the tax lien certificate and those that are not.

To calculate how profitable you are, take all the interest and penalties that are due both on the certificate amount and on any subsequent taxes paid. Add to this your original investment (the certificate amount) plus any subsequent taxes paid plus any expenses that are reimbursed upon redemption of the tax lien certificate. This is the total amount that you would be paid if your tax lien certificate redeemed. Subtract your total investment from this number. Your total investment is what you paid for your tax lien certificate plus any subsequent taxes that you paid plus any reimbursable expenses and non-reimbursable expenses related to your lien. This is your profit. Once you have your profit you can calculate the yield, or percent yield for each of your tax lien certificates. To do this, divide the profit by your total investment. If you want to convert this to an annual yield, you need to know how many days the lien was held for. Multiply the yield by 365 (the number of days in a year) and divide by the number of days that you held the certificate.

For instance if your profit was $360 on a tax lien that you held for 90 days and your total investment was $3600, your yield would be 10% and your annualized yield would be .10* 365 / 90 = .4055 or 40.5 %. You’ll need to do this for each tax lien in your portfolio. Then if you want to, you can get an average yield or annual yield for your entire portfolio.

Since every state is different the calculations for penalties and interest will differ for each state and you will need a different spreadsheet or software for each state that you invest in. If you invest in the state of New Jersey there is software available that has all of this built in. It’s called Tax Lien Manager, and it does much more that calculate the profitability of your tax lien portfolio. Tax Lien Manager will also calculate how much premium you can pay for tax liens and still be profitable and with Tax Lien Manager you can import detailed tax sale lists from LienSource. Tax Lien Manager also provides you with all contact data for New Jersey (tax collectors and county clerks) and pre-printed forms and letters to use in your tax lien investing.

Joanne Musa works with investors who want to reap the rewards of tax lien and tax deed investing. She is the author of the Tax Lien Lady’s E-books, Tax Lien Investing Secrets and Tax Lien Lady’s State Guide to Tax Lien and Tax Deed Investing. For more about tax lien investing, e-mail MoreTips@taxlienconsulting.com. To find out more about Tax Lien Manager, go to http://www.njtaxliensoftware.com/.

Streamline Your Tax Lien Investing Business

2006-05-15T11:21:00.000-04:00

If you invest in tax lien certificates, there are certain things that you need to do in order to keep your investment profitable. By automating your business, you won’t miss any deadlines that might reduce your profit on your tax lien portfolio. You must keep track of when you bought your tax lien certificate, when subsequent tax payments are due, and when the redemption period ends. You will also need a system for recording liens with the county, sending out 30 day notices at the end of the redemption period, sending out requests to tax collectors for taxes due and tracking the profitability of your liens.

Let’s start from the beginning. Before you even purchase a tax lien certificate, you need to contact the tax collector and get a list of the sale properties. Some tax collectors will give you a list with all the information that you need to do your due diligence, but most will not. You need a system for finding the information that you need, doing due diligence on the properties and deciding on which properties you want to bid on and just how much you can pay and still make a decent profit.

I use a software program to help me with all of this and data from LienSource, a provider of tax sale lists for some of the east coast states, including the two most popular tax lien states, New Jersey and Florida. In my software program I have all of the contact information that I need including the phone numbers and addresses of all of the tax collectors in the state. Also with my subscription to LienSource, I get updates on what sale lists are available and I have a calendar of sales for the state so that I know what sales are coming up. If I buy a list from LienSource, I can import all the data directly into the software program. The software program has it’s own calendar that will show all the sales that I import as well as relevant dates for any of the liens I own, such as when quarterly taxes are due and when redemptions periods are over.

My software program allows me to print due diligence sheets listing the sale properties. I can take this with me to do due diligence on the properties. The program calculates how much premium, if any, I can pay for the properties on the list. It also allows me to print out a bid sheet listing all the properties, the way that they will be read out loud at the sale, with the maximum that I can pay for each property so that I know when to stop bidding. This way the emotion of the auction does not carry me away and I make sure that I am profitable. This is very important in New Jersey, where interest is frequently bid down to 0% and then premium is bid. You can easily loose any profit buy paying to much premium for a tax lien.

After I have purchased a tax lien certificate I use the software to track my lien. I keep track of all of my expenses, like recording the lien, and any subsequent tax payments made. I can also print out an affidavit with one click of my mouse to send to the tax collector whenever I make a payment. This is very important, because without that affidavit, you could loose any additional payments and the interest accrued on them. I can also use the software to track my current profit to date on any individual lien or my entire portfolio and it will let me know when I need to pay subsequent taxes and when a lien is ready to foreclose. I can even track the progress of the foreclosure.

I hope by now that you realize that investing in tax lien certificates is not just going to tax sales and buying tax liens. You need to do due diligence on the properties, keep up with the tax liens that you have by paying the subsequent taxes when they are due, and start foreclosure procedures when the redemption period is over. All these things take some time and effort on your part, but if you put in the time now, you will reap the benefits later. Find your own system for doing these tasks to help you streamline your tax lien investing business.
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Joanne Musa works with investors who want to reap the rewards of tax lien and tax deed investing. She is the author of the Tax Lien Lady’s E-books, Tax Lien Investing Secrets and Tax Lien Lady’s State Guide to Tax Lien and Tax Deed Investing. For more information on Tax Lien Manager ™, the complete system for tax lien investing in New Jersey, go to http://www.njtaxliensoftware.com/.

Foreclosing on Your Tax Lien

2006-04-17T13:06:00.000-04:00

By Joanne Musa

Foreclosure procedures for tax liens are different in every state. Some states make it easy for you and you only need to petition the county court, or go through an application process to get the deed to the property. In other states you will have to go through a foreclosure process with an attorney and this may take a lot of time and money. If the property has to go through a foreclosure sale, you may not receive the property, as it will go to the highest bidder at the foreclosure sale, but you will get paid on your lien.

One question that I get a lot about investing in tax liens is what percentage of tax lien properties can you actually foreclose on. I can only answer this question for the state that I invest in which is New Jersey. I have gotten e-mails from my subscribers who have heard that in New Jersey only 10% of tax liens actually foreclose, but the reality is that it’s more like 1%. And this is only the percentage of tax liens that you will be able to start foreclosure on. Most properties that you start the process on will redeem at some point during the foreclosure process. What I have experienced and heard from other investors in New Jersey is that it is a very small percentage of tax lien properties that are actually foreclosed on, in some area of New Jersey it is as low as .01%, since 99% of the 1% of properties that go to foreclosure will redeem at some point in the foreclosure process. There are some areas of the state that have a higher percentage rate of tax lien properties that foreclose, and these are the in the larger cities that have a larger percentage of distressed low value properties. If you are going to tax sales in the hopes of obtaining properties for back taxes, you may want to invest in deeds rather than tax lien certificates. What has happen in the North East and many other area of the country is that property has become so valuable that it is not likely that a homeowner will not be able to pay off a tax lien on their property.

Another thing to consider about investing in tax liens in hopes that you will be able to foreclose on the property is that in order to foreclose, you will need to pay all of the subsequent taxes on the property. A tax lien is not an investment that you buy once and forget about like a bond or a CD. It is something that you will have to continually invest in if you want to ensure the profitability of your lien. You must continue to pay the taxes during the redemption period to keep the taxes up to date on the property, so that when it comes time for you to foreclose on the property the taxes will be current. And when the redemption period is over there are more expenses that you will need to pay, like title search fees and lawyer fees.

The first thing that we do when it comes time to foreclose on a tax lien is a title search. Once you find out if there are any other liens on the property, you can send out a pre-foreclosure letter informing the owner and all other lien holders that you intend to foreclose on the property if you are not paid the amount that is due to you. Many liens will redeem after this step, saving you the time and money of hiring an attorney to start foreclosure proceedings for you. You can furnish any title searches that you have ordered to your attorney and your attorney will order updates when they are necessary. They will also send out a legal 30day foreclosure letter that will inform the property owner and all lien holders that the property will be foreclosed if a reply is not received within 30. Thirty days after this letter of notification is sent your attorney can start formal foreclosure procedures.

Joanne Musa works with investors who want to reap the rewards of tax lien and tax deed investing. She is the author of the Tax Lien Lady’s E-books, Tax Lien Investing Secrets and Tax Lien Lady’s State Guide to Tax Lien and Tax Deed Investing. For more about tax lien investing e-mail MoreTips@taxlienconsulting.com.
This article is for informational purposes only and my not be applicable in every state, since each state has different laws regarding tax lien and foreclosure. This article is not intended as legal advice. You are advised to seek out a qualified attorney for legal advise in this matter.

Report From the Field

2006-04-11T19:46:00.000-04:00

I just came back from the Monroe County Tax Sale. Last year I was able to buy a building lot at this sale for the opening bid which was under $300. By the time I paid the recording fee, realty transfer fee and sale fee, I was up to over $600, but that still wasn’t bad for a building lot that can sell for as much as $25,000 if it can pass a perk test. This year was a different story. I came away empty handed; I only bid on a couple of properties and both of them went up to $5000 or more. Since I would have had to come up with all of the money for any properties that I bid on within an hour after the end of the sale and most of my cash was tied up in another deed and liens, I didn’t have much cash to play with. There were fewer properties in this year’s sale then last year and more bidders. I believe that there were even more first time bidders at this year’s sale than at last year’s sale. More of the properties were sold, and at higher prices than last year. Even the trailers and timeshares were bid up.

What surprised me the most was a 7acre lot that was mostly under water that sold for $15,000! On the tax map it only showed one stream that cut across the property and it looked like there was plenty of room to build. But if you actually did your due diligence and looked at the property you would have seen that there were two streams that took up most of the property with a small strip of land in between them. The lot was also irregularly shaped and there were two easements on the property. You wouldn’t have known about the easements unless you did some checking into the title.

Then there was a pond in a development that sold for $1,000. I came to the conclusion that these newbie tax deed investors liked to fish. I also really can’t explain the 0.02acre lots that actually sold. In past sales, stuff like this would have not gotten any bids and been put on the repository list. It looks like it’s becoming more difficult to buy tax sale properties for “pennies on the dollar” like some real estate gurus claim.

If you plan on going to a tax sale, don’t get carried away by the auction and don’t bid without doing your due diligence first. At the very least you need to look at the property, forget about what you’ve been told about buying through the mail or online unless you have someone who can look at the property for you. For deed sales, you really need to do some type of title search and if you are buying vacant land you must check the zoning on the property. For more information on how to do due diligence for tax deeds and tax liens go to www.taxlienlady.com.

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Joanne Musa works with investors who want to reap the rewards of tax lien and tax deed investing. She is the author of the Tax Lien Lady’s E-books, Tax Lien Investing Secrets and Tax Lien Lady’s State Guide to Tax Lien and Tax Deed Investing. For more about tax lien investing e-mail MoreTips@taxlienconsulting.com.

Three Ways to Profit From Investing in Tax Lien Certificates

2006-03-23T09:32:00.000-05:00

When you purchase a tax deed there is really only one way that you can make a profit on your investment and that is to sell or rent the property. But when you purchase a tax lien certificate, there are three ways that you can profit from your investment. The three ways that you can profit from a tax lien are summarized in this article. Read on to find out more about them.

The first and most obvious way that you make a profit on your tax lien certificate is by redemption of the lien. The property owner redeems the lien and you as the lien holder will be paid the certificate amount of your lien plus any interest and penalties. Because in most states the rate of interest is an annual rate, the longer the lien is held the more money you will make when it is redeemed.

If the lien is not redeemed, once the redemption period is over, you may start foreclosure proceedings on the property in order to be paid what you are owed on the lien. This process can be complicated or easy depending on what state your tax lien certificate is issued in. In some states you only need to petition the county court, or go through an application process, to get the deed to the property. In other states you will have to go through a foreclosure process with an attorney, and this may take a lot of time and money. If the property has to go through a foreclosure sale, you may not receive the property, as it will go to the highest bidder at the foreclosure sale, but you will get paid on your lien.

In some states there is a third way that you can profit from your tax lien investment without foreclosing or redemption, and that is assignment of your lien to another investor. Some states allow for the “assignment” or sale of a tax lien certificate from one investor to another. This is a way that you can realize profit on your lien without waiting to go through the foreclosure process. Of course you are giving up the opportunity of possibly coming away with the property, but you are collecting your profit sooner rather than later.

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Joanne Musa works with investors who want to reap the rewards of tax lien and tax deed investing. She is the author of the Tax Lien Lady’s E-books, Tax Lien Investing Secrets and Tax Lien Lady’s State Guide to Tax Lien and Tax Deed Investing. For more about tax lien investing e-mail MoreTips@taxlienconsulting.com.

Protecting Your Investment in Tax Deeds and Tax Lien Certificates

2006-03-22T11:46:00.000-05:00

by Joanne Musa, The Tax Lien Lady

So you learned about how to buy a tax lien certificate or tax deed. You did your due diligence, prepared yourself to bid at the sale and you bought a tax lien certificate or tax deed. Now what do you do? Read on for information about the first step you need to take to ensure that your investment is profitable.

First of all, your lien or deed must be recorded in the county records, or it is worthless. In some states this is done for you and you pay a recording fee when you purchase your lien or deed at the sale. In most states, though, this is something that you will be responsible for and I suggest that you do it right away. You’ll have to wait until you have the deed or tax lien certificate, then you will have to send the original document, along with the recording fee, in to the proper office to be recorded with the county records. The required fee will vary depending on the state and county. You will need to call the recording office (usually the county clerk, or county recorder) and find out what the fee is so that you can send the exact amount in with the document. If you do not send the right payment your lien or deed may be returned to you without being recorded.

I suggest that you make a copy of the tax lien certificate or deed before you send it in to be recorded and that you send it via certified mail, with a return receipt. This way if your document is lost, you have proof that you sent it in to be recorded and you may be able to get it replaced. Also, the recording process can take some time, and if anything happens with the property in the meantime, you’ll have a copy of your document.

Once your document is recorded with the county, it will be sent back to you. Put it in a safe place. You will not be able to receive redemption of your tax lien certificate without providing the signed document to the tax collector. Do not sign it and turn it over to the tax collector until you are sure that the redemption amount is the amount that is due to you. To ensure that your tax payments, recording fees and other reimbursable expenses are accounted for, you will have to provide the tax collector with and affidavit for any payments that you make on your tax lien.

Joanne Musa works with investors who want to reap the rewards of tax lien and tax deed investing. She is the author of the Tax Lien Lady’s E-books, Tax Lien Investing Secrets and Tax Lien Lady’s State Guide to Tax Lien and Tax Deed Investing. For more about tax lien investing e-mail MoreTips@taxlienconsulting.com.

Is Tax Lien Investing For You?

2006-02-19T00:26:00.000-05:00

Tax lien investing used to be something that only the wealthy knew about and took advantage of. For decades it was a little known, high yielding investment vehicle. All of this has changed in the past few years as more and more people become aware of the high yields and minimal risk of investing in tax lien certificates. A lot of people have heard about investing in tax lien certificates but they’re not sure if it’s really something that they can do. Read on to find out if this is an investment vehicle for you.

Tax lien certificates are an attractive investment for the small investor because you don’t need thousands of dollars to start and you don’t have to pay any brokerage fees. There are drawbacks, however. You almost have to become an expert in tax lien investing to invest profitably. This is an investment that you have to be able to devote some time to. It’s not like you can call your broker and tell him to buy some tax liens for your portfolio. Tax lien certificates are sold at tax sales conducted by a county or municipal official. These sales are usually auctions that are held at least once a year. Counties with very large populations may hold tax sales quarterly or even once a month. You have to find out when and where these tax sales are held, do due diligence on the properties in the sale and attend the tax sale to bid on properties. When you are the successful bidder, you are issued a tax lien certificate and must record this certificate with the county clerk. You are then responsible for maintaining accurate records and submitting the proper documents to safeguard your investment.

If you have the time to spend investigating properties and you enjoy the challenge of learning something new, then perhaps investing in tax lien certificates could be a good way for you to increase your bottom line. If, however, you don’t have the time to spend researching properties and finding out about tax sales, then this is probably not the right investment vehicle for you. Another thing you want to consider is where do you live. Some states do not sell tax liens, and if you do not live in a state that has tax lien sales, you may have to spend a considerable amount of money traveling to tax sales in order to buy tax lien certificates. Although some counties have online auctions or sell tax lien through the mail, you would still have to do due diligence on properties before you place a bid. If you don’t, you may wind up loosing money by buying a tax lien certificate on a worthless piece of property.

Teleseminar Outline

2006-02-08T17:35:00.000-05:00

How to Invest in PROFITABLE Tax Lien Certificates and Tax Deeds

TELE-SEMINAR

Starting Saturday February 25, 2006

Lesson One – February 25
Introduction to Tax Lien and Tax Deed Investing
You will learn:

The difference between tax liens and tax deeds and redeemable tax deeds
What you need to be aware of when buying tax lien certificates
What you need to be aware of when buying tax deeds and redeemable tax deeds
What is the difference from the investors stand point between tax liens and tax deeds
Which are best for you to invest in, tax liens, tax deeds, or redeemable tax deeds

Lesson Two – March 4
Finding Tax Sales and Doing Due Diligence
You will learn:
How to find out about tax sales
Resources for finding out about tax sales and getting sale property lists
How to do due diligence for tax deeds and redeemable tax deeds
How to do due diligence for tax liens

Lesson Three – March 18
Preparing for Your First Tax Sale
You will learn:

Bidding procedures
How to register for the sale
What you need to bring with you to the sale
How much you should pay for a lien or deed

Lesson Four – March 25
How to Profit from Your Investment
You will learn:

What you need to do immediately after you buy a tax lien certificate
What you need to do immediately after you buy a tax deed or redeemable tax deed
Ways to profit from tax lien certificates; redemption, foreclosure and assignment
What paperwork and tracking is necessary to keep your lien profitable

All classes will take place 11:00 am to 12:00 pm. This seminar is provided free from taxlienlady.com. To register go to www.taxlienlady.com/teleseminar.htm and click on the link to join.

Teleseminar Survey Results

2006-02-08T17:23:00.000-05:00

I’d like to thank everyone who signed up for Tax Lien Lady's teleseminar series, How to Invest in Profitable Tax Lien Certificates and Tax Deeds. The results of the survey are in and the most popular day for the teleseminar is Saturday. The most wanted time was 10am - 11am, followed by 1-2 pm EST. In order to accommodate the large number of participants from California, I will be conducting the seminar at 11am - 12pm EST. Seven o'clock in the morning is too early to ask anybody to be up and attentive on a Saturday! The teleseminar will kick off on February 25th. The second class will be held on March 4th. Because I will be away the following week, the third and forth classes will be held on March 18th and 25th. See the teleseminar outline also posted today on this blog for an outline of what we will cover. This is just a general outline; I'm planning some surprises for you to really make giving up an hour of your free time on Saturday morning worth your while. You won’t want to miss it!

Those of you who signed up for the teleclass, keep your eye on your inbox for more e-mails from taxlienlady.com about how to call into the teleseminar. If you didn’t sign up yet, it’s not too late, just go to www.taxlienlady.com/teleseminar.htm and click on the link to join.

Happy and Prosperous Investing,
Joanne Musa,
The Tax Lien LadyAnswering Your Questions about Tax Lien Investing

The Nassau County Tax Sale

2006-01-30T17:14:00.000-05:00

New York is a mixed state where most counties have deed sales. Very few Counties have lien sales. The five boroughs of NYC do sell liens, but not to individual investors. Their lien sales are only open to a couple of fund companies. Nassau County has a huge tax lien sale once a year. This year’s sale will start on Tuesday February 21, 2006 and will run through Friday February 24th. You can find information on the tax sale on the county treasurer’s web site at
http://www.nassaucountyny.gov/agencies/Treasurer/Annual_Tax_Lien_Sale/ann_tax_lien_sale.html.

There are some important things to keep in mind if you intend to bid at the Nassau County sale. First of all you have to register in advance and there is a $100.00 fee for each day that you intend to bid. You can register at 9:00am before the sale, or you can pre-register online or by calling the tax sale department at 516-571-5023. You can purchase the updated sale list from Nassau County for $150.00. This list does not give the address of the properties only the tax ID numbers, you will have to cross-reference this list with county assessment information, which is
available on the county assessor’s web site at http://www.nassaucountyny.gov/mynassauproperty/. If you don’t have time for this part of your due diligence, you can buy a detailed property list from LienSource for $500.00 at http://www.liensource.net/.

Here are some other important tidbits of information that I have gleaned from the County web site and from subscribers in the NY area:

You have to pay 10% of the amount due at the sale and the balance is due in 30 days.
Even though the interest is bid down (it can be bid down to zero). The maximum interest rate (10% for each 6 month period up to 24 months) is still collected by the county. The difference between the interest bid and the maximum interest is known as the “differential lien” and must be paid to the county by the property owner upon redemption
or by the lien-holder upon application for a deed.
The lien holder may pay subsequent taxes, and will get interest on the subs, but only at the rate that was bid at auction.
Liens are sold for school or county taxes but the individual municipalities
may have their own tax sales, so check with them to make sure that no
municipal taxes are due on a property that you bid on.

Note: Every effort is made to give you accurate and useful information regarding tax sales.
This information, however, is constantly changing and is only intended to be a guide
for educational purposes. It is no substitute for legal or financial advice, and no
guarantees are implied.

Happy and Prosperous Investing,
Joanne M. Musa,
The Tax Lien Lady
Answering your questions about tax lien investing
Tax Lien Consulting, LLC
mailto:joannemusa@taxlienlady.com
http://www.taxlienlady.com/

Update for Subscribers to Tax Lien Tips Newsletter

2006-01-13T12:42:00.000-05:00

Hi, Joanne Musa, The Tax Lien Lady here with an update for subscribers to my Tax Lien Tips newsletter. I have recently changed my newsletter delivery service from Relevant Tools to 1ShoppingCart. As a result of this change you have been asked to confirm your subscription to my Tax Lien Tips newsletter. All you need to do to continue receiving Tax Lien Tips along with other news from taxlienlady.com about how to invest in tax lien certificates and tax deeds, is click on the link in the confirmation e-mail that was sent to you. You do not need to reply to the e-mail or fill in the form on the confirmation page that you are sent to when you click on the link. I apologize; I didn’t realize that the confirmation page had this form on it. Don’t worry if you did fill out the form, you won’t get duplicates of my newsletter. You will, however, receive my 5-week tax lien investing e-course over again. If you do not want the course again you can simply unsubscribe to it. There is a place to unsubscribe at the bottom of each lesson and it will not affect the delivery of your newsletters.

Keep your eyes open for the next issue of Tax Lien Tips. In the next issue I will feature an article by Texas attorney Darius Barazandeh about tax deed investing in Texas. His article will soon be available on the article page of taxlienlady.com. His course in Texas tax deed investing, Texas Houses for Pennies, is the only deed program that I use to help me with my deed investing. Texas Houses for Pennies is a complete course on how to invest in tax deeds. Although the program is written for Texas tax deeds (which are redeemable deeds) it can be applied to most tax deed states. I have found the information in this course to be very helpful for buying deeds in Pennsylvania. If you are interested in investing in tax deeds or redeemable tax deeds, this program is a must have along with my State Guide.

In my e-book, Tax Lien Lady’s State Guide to Tax Lien and Tax Deed Investing, you’ll find out which states sell liens, deeds, and redeemable tax deeds, and you’ll learn about the differences between them. You’ll learn about the bidding process in each state and who to contact for information about tax sales. You’ll also get valuable links to state and county web sites that will save you a lot time in your due diligence and in searching for tax sale information.

Joanne Musa is a Tax Lien Investing Coach and Consultant who works with investors who want to learn how to buy profitable tax lien certificates and tax deeds. She is the president of Tax Lien Consulting LLC, a consulting firm for tax lien investors.

For more information about Texas Houses for Pennies go to www.taxlienlady.com/texastaxdeed.htm.

For more information about Tax Lien Lady’s E-books go to www.taxlienlady.com/store2/sales.html.

Who's On Your Team?

2006-01-05T20:47:00.000-05:00

By Joanne Musa,
The Tax Lien Lady

Have you been wanting to start investing in tax lien certificates or tax deeds but don't know where to start? Every successful endeavor requires a support team. Tax lien investing gurus make it sound so easy, you just go to the tax sales and buy a lien or a deed. But it's a lot more complex than what you here about in those tax lien seminars. In fact, it takes a TEAM to be successful at tax lien or tax deed investing. So who is on your tax lien investing team?

You, the investor, are an important part of your investment team. You are the person who does the due diligence and purchases the tax lien certificates or tax deeds. You may be doing this all by yourself or you may hire someone to do the due diligence and bid at tax sales for you. But you are making the decisions of what tax lien certificates or tax deeds to buy.

Your Title Searcher. This can be a title search company or an individual who does your title searches for you. Their job, in the case of tax lien certificates is to check on the title of the property before you start foreclosure proceedings. In the case of tax deeds, since you are actually buying the property, you may want to have a title search done before you bid on a property at the tax sale. You definitely need someone who can research property titles for you regardless of whether you are investing in tax lien certificates or tax deeds.

If you are using a title search company, there are different levels of title searches that you can get. For tax liens, you may only need the simplest and cheapest search. If more detailed searches are needed during the foreclosure process, your lawyer can order them from the same title company. Sometimes you may want to use different title companies to do different types of searches on the same property.

Your Lawyer. Most tax deed states do not issue a "warranty deed." This means that you will have to clear the title of the property before you can sell it to someone else. I recommend that you have a lawyer for this purpose. Although it can be done without a lawyer, if you miss any deadline or notification, you could loose your right to the property. The same goes for the foreclosure process on tax deeds. Although there are a few states that make this process easy for you, in most states this is somethhing that you'll want to have a lawyer take care of for you. It's best to get a lawyer that specializes in tax lien foreclosures, otherwise the process could take longer and cost you more money that it should.

Your Rehabber. Properties bought at tax sales are often neglected. Typically if a property owner is not paying the taxes on their property they are not keeping up any maintenance on the property either and it may be in bad condition. If you acquire a property through a tax lien it could have been neglected for a long time since you have to wait out the redemption period before you can foreclosure. Unless you know how to do the fix up yourself, and you have the time to do it, you'll need to have someone who can do this for you.

Your Realtor. Once you've acquired a property, whether it be from a lien or a deed, and you've done the rehab, you'll need to sell it or rent it to make a profit on your investment. If you don't have many properties and you have the time, you may want to do this yourself. However, if you are busy buying more tax liens and/or deeds, you may want to hire a realtor to do this for you. This will free up your time to spend on buying more profitable investments.

Other members of your successful tax lien/deed investing team may be your office manager - someone who can take care of all of your paperwork, such as recording liens or deeds with the county and paying subsequent taxes, your bookkeeper, and your accountant. These are things that you may want to do yourself or hire a professional to do, depending on how many liens or deeds you purchase each year.

Regardless of whether or not you've ever outlined all of the activities that are involved in creating and maintaining a profitable tax lien or tax deed portfolio, they do all exist. And if you've been wondering why your investments are not as profitable as you'd like them to be - it could be you've left out an important function and/or member of your tax lien investing team.

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Joanne Musa is a tax lien investing coach who works with independent investors who want to learn how to make profitable investments in tax lien certificates and tax deeds. Ms. Musa is the author of Tax Lien Lady's e-books.