Tax Lein Certificate Sales are caused by properties that the property owner has failed to pay the property taxes for. As a result, the government puts a lien on the property and gives an opportunity to tax payers like you to pay their property taxes for them. You can receive your money once the property owner pays back the taxes. Should the owner not pay the back taxes, you may just receive a decent three bed, 2 bath house for only$4,000 in California!
In California, first you have to find your county's real estate tax web site and phone #. First, go to the Google search engine and enter your county and state + "property tax collector", "property treasurer" or "property taxes". Once you locate your county's property tax office, look on their web site, e-mail or phone them to find out where you can find a list of their "delinquent tax properties." (Usually this list will be on their website, or in a local newspaper). Also ask when the county tax lein certificate sale is held & for a list of the rules for their tax lien certificate sale. (Please keep in mind that many counties and states call the tax sale by different names such as: tax deed sales, tax lien certificates sales, tax lein certificate sale, and tax levy sale...but they're all talking about the same thing.)
Once you have located a list of the properties available, you should research which real estate properties are valuable enough for you to place a bid on during the tax lien certificate sale and which ones you need to cross off the list. To do this, go to your county's property appraiser web site and search the public records for every property listed in areas that you desire. Nowadays, most counties will have this information online. If your county doesn't, then you need to visit your county property appraiser's office to look at hard copy files of the delinquent property records. Overall, the ideal properties you should be focusing on are the ones which have the lowest possible risk and the easiest potential to sell should you wind up owning the tax lien house or property. To be safe, you should ignore vacant land as a beginner because this type of tax lien has the most risk. Residential family homes in decent to good communities are a low-risk investment and should be your starting point. Begin to whittle down your list to properties you favor according to area, recent sales history, and estimated house value.
To get the estimated home value of a property research on your county's property appraiser web site or use websites such as Zillow or Cyberhomes to get a rough estimate.
Take your list of your desired properties and go see them in person. Get accustomed to the community, the outside of the home, take photographs and write notes. This is most important. It is absolutely critical that you go to look at the property in person. There have been times when I've done research on properties that looked like an amazing investment on file, but when I really looked at the home in its current condition, I discovered that it was a wreck! Believe me, you will thank yourself for spending the extra time to visit the property. After you complete a few tax lein certificate sales under your belt, you will get in the routine to quickly research and choose the most profitable properties.
Prior to going to the tax lien certificate auction or tax deed sale, you need to already know what properties you are going to bid on, and what your highest bid will be. (As a basic guideline, you should always limit your maximum bid to at least sixty percent or less than the estimated market value of the property to leave room for profit and surprise repair costs, etc.) If you win the highest bid for a tax deed and the delinquent owner happens to pay his or her delinquent taxes, you can expect a large return on your money of sometimes 20 percent or higher! If the owner doesn't pay his or her delinquent taxes, you may find yourself becoming the owner of a decent piece of property that you managed to get at a rock-bottom price...all thanks to your hard work and research. Any way you look at it, if you do it right, it could be a profitable outcome and an exciting project. Best of all, it is several times safer than investing in stocks, and a more profitable ROI (return on investment) than a savings account can offer. (Please notice the warning below).
WARNING:
Investing in real estate tax lein certificate sales can be very beneficial and enjoyable. At the same time, it does require the research of properties to minimize risk. This article just gives a small overview of the tax sale process but does not leave enough space to focus on the exact details.
If you really need a specific step-by-step guide on investing in tax lein certificate sales, refer to the link below. It is a down-to-earth guide written by one of the best in the business and has everything you need to know to get started, with none of the fluff and empty promises that some other books and websites say about tax lein certificate sales.
budurl.com/TaxLienGuide
