Posted by michaela-CA on February 13, 2008 at 14:42:02:
IB,
money isn’t my big motivator. Quality of life is more important to me. Having been all over the world, I always considered Atlanta lacking in international flavor and open-mindedness. I’m very glad I’m out of the south.
Michaela
tax lien investing - Posted by BigV
Posted by BigV on February 08, 2008 at 04:30:41:
my dad called me. He saw a course that would show him how he can buy a home for $300 by buying a federal tax lien.
now, I know that if it were that easy, everyone and their brother would be buying tax liens.
I’ve searched the archives here, but there does not seem to be a lot of info about how to buy at tax liens.
Is it possible to buy (say 150K house) for as little as $300? Have any of you done it within the past 6 mo?
Re: tax lien investing - Posted by IB (NJ)
Posted by IB (NJ) on February 08, 2008 at 06:40:55:
Your Dad may be somewhat mistaken. He’s probably talking about purchasing an unpaid municipal lien such as a water and sewer lien or a property tax lien.
Here in NJ, the market is VERY competitive. Most, if not all of the liens in my farm area are purchased at 0% interest and $5k + premium. In other words the interest rate gets bid down to 0% and then up to $5k or more in premiums. So it’s definitely big investors with deep pockets who are out bidding everyone.
Ben(NJ) and BillH are two of the tax lien aficionados on this site who may be able to give more information.
Ib
Re: tax lien investing - Posted by David Krulac
Posted by David Krulac on February 08, 2008 at 04:58:01:
I never heard of buying a Federal Tax Lien, but have bought property with Federal Tax Liens on them.
Tax liens usually refers to real estate property taxes from the muncipality, school district and county, which you can buy at auction.
No, no, no… - Posted by James
Posted by James on February 08, 2008 at 06:46:10:
His dad is right you guys…it DID say ‘FEDERAL TAX LIENS’…
John Beck’s system. New infomercial format basically.
I saw it a couple days ago…it was a different format
than before (and I caught them say federal liens), so I watched…for 2.5 minutes.
meh…
It’s the same course though…just another way to market it. Good information…from what i hear, just
not for everyone. People start checking the archives for info.
James
then what? (if you don’t mind me asking) - Posted by BigV
Posted by BigV on February 08, 2008 at 10:41:33:
From what I understand, there is usually some sort of a right of redemption, where a person can buy their home up until 3 years after the sale and pay your price plus interest.
So, even though I bought a lien for $500, I still have carrying costs for the house, correct? I.e. I still have to pay taxes on it, utilities, etc…
So, all of this effort and expense only to have the original owner buy back my tax lien cert and giving me 20%?
John Beck - Posted by Rick, the Probate Guy
Posted by Rick, the Probate Guy on February 09, 2008 at 23:21:02:
I met John the first time many years ago and I’m almost certain that the guy in the commercial is not really John but an animatronic version of John because he’s way too amp’d up on TV.
Seriously, in real life, John has about the most monotone speaking voice that I’ve every heard and yet I always found myself on the edge of my seat because his material was always so rich in content. He and wife Joyce are really nice people and very giving when it comes to being helpful.
I have not heard the most recent infomercial referring to buying Federal liens, so I can’t really speak much about that. Fluffy TV material aside, John has produced some incredibly well researched material in years past, primarily before he became fixated on proeprty tax liens. I have the CA book and I’ll challenge anybody else’s material, including West, Lexis-Nexis, and other legal publishers’ books for depth and application. It’s not the same as the course offered on TV, from my understanding.
I do believe that Federal Liens, including IRS liens, can be purchased, however, but I know experience in buying these animals. it would be really interesting to learn if they can be foreclosed upon in some manner, especially as a means of clearing title.
Anybody listening to that last idea?
it depends on your state laws… - Posted by David Krulac
Posted by David Krulac on February 08, 2008 at 11:32:01:
In one state the interest is 12% and the redemption is 18 months. In some other states the redemptiuon is 2 years, etc. There are risks, unlike the TV guru fantasy land and there are ways to lose money. Proceed with caution. One yera we really blitzed it buying all kinds of tax liens. We didn’t get a single property but the 12% interest rate was as Lonny would say “Good enuf”. Soem other states have higher interest rates such as MI & TX.
Re: John Beck - Posted by jack E
Posted by jack E on June 20, 2008 at 14:47:48:
Rick. The guy in the info commercial is John Beck. I went on a boot camp with him several years ago. He was mild mannered then, but he sucummed to the infomercial lure and turned the way he is now. Too bad. Look out his basic program gives good information, but the add on will kill you and are useless.
Re: John Beck - Posted by Bill H
Posted by Bill H on February 10, 2008 at 08:53:34:
Yes, Rick, IRS liens can be purchased. In fact the IRS website. (www.irs.gov) has a section called “Seeking Guaranteed Bidders” on which they ask you if you want the property to step up and guarantee their lien at the sale.
They only want a guarantee for the opening bid. If it is overbid you are on your own from there.
Of course you take the proerty subject to any senior liens and encumberances.
I too am not certain about the Federal liens, unless the website that is doing the advertising has “Fluffed UP” IRS tax liens.
Re: Taxliens - Posted by Nick
Posted by Nick on May 16, 2008 at 07:19:15:
I would encourage your Dad not to buy the package but actually go to a tax sale for his town most towns usually have them twice a year in the spring and around November ish. Tell him to bring about $300 - $500 in cash with him. If no one is bidding on a particular property let him try it out for himself. I went to a tax lien sale and got 0 interest but if the taxes didn’t get paid I would have owned two lots worth 75,000.00 each on a $40.00 total investment. Unfortunately the tax office made a mistake and the taxes were paid on these properties, I recieved all of my m0oney back and it doubled somehow.
But… - Posted by BigV
Posted by BigV on February 08, 2008 at 13:02:50:
if the right of redemption is 18 months, who is paying taxes during those 18 mo?
Beck - Posted by Nike
Posted by Nike on February 10, 2008 at 12:52:25:
I think you’re confused—IRS does not sell their lien rather when they seize property they sell at auction. Before an auction they solicit people to come and bid. Also when a senior lien forecloses IRS may seek bids for buyer to come in and execise IRS 120-right of redemption.
Re: But… - Posted by Bill H
Posted by Bill H on February 08, 2008 at 16:44:49:
There might be a possibility that a Federal Tax Lien could be sold. Some IRS liens carry a redemption period. (That ought to raise a lot of comments)
Some Federal taxes may go to sale…very rarely though.
I buy hundreds and hundreds of tax liens every year. Make a very nice living by doing so.
Basically"
You do not pay taxes…city, county, ie., the taxing jurisdicsion that has the authority can sell the property for the taxes due.
You buy the lien…you have NO OWNERSHIP right. All you hve done is loaned the taxing jurisdiction the money to pay the taxes for someone else.
In every tax lien state that I know of there is a redemption period…meaning the owner or any other interested party can step up and pay the taxes…All you are entitled to is the interest and penalties.
If it goes to maturity…you get a tax deed from the taxing jurisdicstion. The redemption period has expired.
You must pay all back taxes and the other costs associated with the transaction in order to get this deed.
In virtually all states the title is cleared of all liens and encumberances…BEWARE…that is NOT true in ALL CASES.
You could possibly wind up with a city tax lien or a state tax lien, a mechanics lien, etc. remaining and must be taken care of the clear title.
You go through what is called “Quiet Title Action” a process in which you ask the courts to clear the title and give you clean ownership.
If anyone appeals the process or uses the most common plea…“I was not properly served with process” you have to satisfy that to get clean clear title.
All the late night TV Gurus are selling books and tapes…NOT…success. Watch as the TV screen scrolls by and you will see in much smaller print, “Unusual results…yous may vary”…Belive me they will.
That in a nutshell is tax lien investing. Tax Deed investing is another different ball game.
Re: Beck - Posted by Bill H
Posted by Bill H on February 10, 2008 at 16:00:14:
A play on semantics here. IRS does not have the $$$ to buy the property. The cannot use taxpayer $$ to build an inventory of siezed properties.
Their procedure is as I simplisticly tried to explain. If there is equity and they are in a junior position they will advertise their liens on their website under “Seeking Guaranteed Bidders”…if someone steps up and guarantees the bid they will sieze and sell during their 120 day right of redemption. If no one steps up they will pass the deal.
Thank your for further clarification of the issue.
Re: But… - Posted by Kristine-CA
Posted by Kristine-CA on February 08, 2008 at 18:27:29:
Hi Bill. I live in CA and have only purchased properties at tax sale where a
tax deed is issued. Very straightforward. When you are the winning
bidder on a tax liens, is all your capital tied up until the owner redeems?
Do any of the municipalities make annual or periodic interest payments,
or is it all cumulative until redemption? Thanks, Kristine
Re: But… - Posted by BigV
Posted by BigV on February 08, 2008 at 17:48:32:
thanks all for your time. I appreciate it.
Re: But… - Posted by Bill H
Posted by Bill H on February 08, 2008 at 20:10:02:
When you are the winning bidder on a tax liens, is all your capital tied up until the owner redeems?
Yes, however there will be redemptions almost monthly. So you in essence get back $$$ and interest just like any other note.
Do any of the municipalities make annual or periodic interest payments, or is it all cumulative until redemption?
The taxing jurisdictions pay you as the property is redeemed. The taxes have beenpaid so theyhave no reason not to repay you.
Re: But… - Posted by michaela-CA
Posted by michaela-CA on February 08, 2008 at 18:49:08:
Kristine,
in Georgia (haven’t done any tax lien investing, but have redeemed a number of properties) you buy the tax lien/fifa and , yes, your money is tied up. The owner has 12 months to redeem. If they redeem, they will have to pay a m/m lumpsum of 20% above the lien value. After that first year, it’s no longer possible to redeem. At that time you will have to either wait until someone buys the property somehow or you can push for a tax sale.
Michaela
Re: But… - Posted by Anna
Posted by Anna on June 03, 2008 at 06:40:40:
Hello dear i will find for you what do you want about properties, but firs you need send me leter of unterest.