If you’re thinking of bidding at tax lien certificate auctions as your next real estate investing method, you may want to pause and re-think that strategy. While investing in the arena of tax foreclosures is a great idea, many new investors make the mistake of investing in tax liens when their money could be more easily multiplied elsewhere.
Unless you have a lot of money, and a lot of time to wait for the return on your investment, tax lien certificate auctions are probably not for you. Large tax lien firms have an edge over the average bidder, and you’ll be bidding against their agents on just about any property worth bidding on. Since they have funds “out the wazoo”- that’s an industry term- they can afford to make less money on their investment, and thus, will almost always be the winning bidder on any property they want.
If you are successful at bidding, you very well may have to hold that lien for up to five years in some states before you will be able to foreclose on the property– and you don’t want to foreclose, you want the return on your cash, right? See, it’s not so easy. There are a lot of traps and pitfalls, a lot of “ins, outs, and what-have-yous” that the average investor isn’t equipped to handle. So what to do?
Forget tax lien certificate auctions. If you want tax foreclosures, go straight for the deed!
It’s a lot easier than you think, and it doesn’t involve tax deed sales, either. What most tax property investors don’t exploit is the avenue of purchasing this property directly from the buyer. It seems so obvious, and yet few people are doing it. Why? Well, a lot of new tax foreclosure investors are failed mortgage foreclosure investors. (Sound familiar?)
If you’ve ever tried to invest in mortgage pre-foreclosures in this way, you’ve probably had a terrible experience. It’s like pulling teeth to get people in mortgage foreclosure to call you back, and if you are able to find a decent deal somewhere, then you’ve got headache after headache to deal with- back mortgage payments, other liens and judgments, back taxes, the works.
Surprisingly, it’s quite different with tax foreclosures. Since mortgage companies will pay off back taxes to prevent a property from going to tax sale, you will rarely find any tax sale properties encumbered by a mortgage. Homes with no mortgage are also often homes with no other liens. Usually, all they’re encumbered by is the taxes that are owed. So why don’t their owners get them out of tax sale?
The answer is simple, and probably not what you think. Frequently, properties that end up at tax sale are owned by people who simply do not want them anymore, and have decided to let them go to the government, rather than deal with the tax burden and the burden of ownership any longer– people like unwitting heirs, ex-landlords, and failed investors. Find these people (they are often long gone), and you’ll find owners who are ready to strike you a great deal just to get the property out of their name and to get on with their lives.
This little-known method of investing in tax foreclosure properties is known as “deed grabbing” amongst the small number of real estate investors that practice it. It’s not difficult to do, and best of all, there’s very little competition in this field. Due to the current economic climate, there are more tax foreclosures than ever before, and will likely continue to be for some time.
Read “5 Days to Getting Tax Delinquent Property for $200 or Less” – visit http://www.Deed-Grabber.com
Learn what to say to an owner on the phone to “grab their deed” for as little as $10! (Yes, really!) Visit http://Deed-Grabber.com now.
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