Tax Lien Investing: How I Got Started

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?

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

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

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

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

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

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

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

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

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

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

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!

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

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

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

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

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

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?

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

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.