Posted by Nelson J Vega on September 30, 2000 at 18:22:28:
I’m sure others can learn from your contribution, as I have. Thanks again.
Nelson
Tax lien certificates - Posted by Michael
Posted by Michael on September 29, 2000 at 11:23:42:
Has anyone here made money buying these and either holding them or proceeding through foreclosure? What did you learn? Did you lose any money? Are there unanticipated costs?
Thanks
Michael
Tax liens been berry, berry good to me! - Posted by Ben (NJ)
Posted by Ben (NJ) on September 30, 2000 at 06:36:54:
Maybe one day JP will get that FAQ section going but until then here goes: I would pick up a copy of Moskowitz’s “The 16% Solution”. In my opinion, this is the best book on the market for tax liens. Also check out the materials at taxsales.com., and johnbeck.net. I have been buying liens for five years and can honestly say I have made almost no mistakes. I
have rarely if ever varied from my original formula of buying good residential and commercial properties with mortgages on them and doing at least a drive-by on every property before purchasing the lien. This business requires alot of liquidity though and it may be two or three years before you get your money back
so be prepared to tie up funds for awhile.
BEN (NJ) In NJ, if you’re interested in a tax… - Posted by Nelson
Posted by Nelson on September 30, 2000 at 12:25:45:
…certificate on a property that was vacant, and you went and bought the lien, and you paid taxes on it again when it came due; all of a sudden, somehow, the property burned down, how do you recoup the amount you paid in?
Not knowing anything about the tax lien purchasing business, I just wonder how you go about protecting your investment, and if you will–maybe even go through the process or the steps you take and perhaps the steps that the municipalities require you to take to keep your interest intact. Thanks in advance:-)
Nelson
Good question, let’s run through an analysis… - Posted by Ben (NJ)
Posted by Ben (NJ) on September 30, 2000 at 14:23:10:
let’s say a property is assessed at $100,000 total (say land $40,000, improvements $60,000) One years taxes is roughly equivalent to 2% of assessed value,
so lets say $2,000. You buy a certificate for one years
taxes ($2,000) you have to hold it for two years and carry the taxes before you can foreclose (you pay $4,000 more), now it takes you another year to foreclose (you pay a lawyer $2,000 to do that and pay another years taxes) Your total outlay now is $10,000. Now,the house burns to the ground. You have still obtained a $40,000 piece of land (assuming the assessments are not COMPLETELY off the mark) for $10,000. That having been said, there are companies
that will insure tax liens in case of the above. I think Lloyd’s of London is one of them. I know
hardly anyone who insures their liens though.