You might have asked this before, “Is it possible to invest in tax liens and tax deeds tax free?” Well, the answer is yes. It is entirely possible to use cash from a self-directed IRA to invest tax free in tax lien certificates and tax deeds.

You see, if you use the cash from a regular self-directed IRA to invest in tax deeds and tax liens, your cash will grow tax free until you decide to withdraw from your own account after you retire. However, if you plan to use the cash from Roth self-directed IRA and you did not withdraw until you retire, you will not pay your profits’ taxes! Sounds great, isn’t it?

Though a lot of brokerages may say that they contain self-directed IRAs, these may not be true. A true self-directed retirement account can permit you to invest anything as long as it is not prohibited by the law. Investments that are allowable are tax deeds, tax lien certificates, notes, real estate, and other usual investments. True self-directed IRAs are not allowed to sell investments but they suggest investment types that you can utilize your self-directed IRA account for and may even teach you in doing the paperwork but they cannot make any commission.

Now, retirement account specialists say that you are only allowed to roll-over the money from your 401k if you are not working anymore for the company where you set up your retirement account from. But you can roll over the money from a regular IRA account into a self-directed IRA.

Just a heads up, there will be fees when you open and maintain a self-directed IRA but they are of minimum compared to taxes that you will be paying for the government for your capital gains and investment income.

A lot of people may have come across a site that offers tutorials for investing in tax liens with exaggerated claims such as purchasing million-dollar homes with just a thousand dollars. Of course, some may think that it’s worth a try so they buy this program called “Tax Liens Made Easy” which will provide you access once you pay. Just to warn you, do not get fooled easily with such tax lien and tax deed programs. Always be wary and if you think you are willing to pay for the said program, learn more about it first so you won’t be wasting your time and money for something useless.

It will be helpful if you actually read the full text of the website’s offers so you will know what you will get when you purchase. If the website’s program does not elaborate on what information or what tutorials that will be provided to you, do think twice. It is also recommended to look for other alternative tax lien tutorial programs that are on the internet and choose the best for you.

Just so you know, investing in tax liens may require time and effort for you to study and understand the process before you actually start to bid but don’t be fooled with programs that claims to provide you outrageous steps that will make you rich easily. There are other ways to learn more about investing in tax liens such as reading free blogs or articles on tips and procedures, asking help from real estate professionals, or self-studying.

Investing in tax liens is considered to be one of the best investments that is guaranteed fool-proof and easy if you fully understand the ways just make sure you are able to get the best tips and advices rather than just spending cash on programs that really aim to scam rather than provide information.

In one form or another, almost every county government offers tax lien sales on properties. The government seizes these properties by delinquent homeowners who didn’t pay real estate taxes within a specific time or even not at all. Public auctions are held as a way for the government to make up for the taxes owed.

A person who wins a bid at real estate auctions can purchase the property at an amount which is lower than its actual market value. Every state has different laws and way on conducting such sales which is why you need to conduct some research on your own if you plan to buy tax liens.

Basically, you must learn everything you can about property tax laws, tax foreclosure process, redemption periods, and other aspects of real estate. You can find many resources on the internet as well as books talking about the subject. You would surely get the helpful information that makes buying tax lien certificates a breeze.

Contact the county where you plan to buy such properties. You can visit the county’s website or call them. After doing so, they can tell you when and where such auctions are taking place. They can also provide you a listing of the properties for sale. You can also find the auctions as it is published on local newspapers.

You should go see the property in person if you’re planning to bid on it. If you bid on it and win, it is yours. You can make improvements on it and maybe do some renovations. You can also keep it as a rental property or resell it in the future. Furthermore, to buy tax liens offers you the chance to move in yourself to that property.

Government tax lien certificate is the one that you should be looking for if you’re aiming for a low cost investment property. Tax liens are placed on a property when a real estate agent or delinquent homeowner doesn’t pay his real estate taxes to the city government. Thereafter, the government sells the property by holding an auction and they sold it to the highest bidder. The new owner now has the responsibility to take over the liability of paying the real estate tax arrears.

Getting in touch with the local county tax collect enables you to get a list of all the properties which are in government tax lien. Information on auctions and real estate biddings are announced on public via the local newspaper or websites. Through this you would know when the government intends on holding the next auction of the tax lien properties.

When it comes to the day of bidding and purchasing the real estate properties, all county governments have their own set of rules. Some of them might want the buyer to be present during the auction and pay cash in person for the property. That is why it’s very important to know these rules in advance by checking online as it is available. This assures you of not ruining the tax liens opportunity that’s on stake.

This type of real estate investment is also intended to those people who are really wanted to own a home of their own. Tax liens properties are a sure way of getting one as you can get the property for lower than the market value. You would still be saving lots of money even after paying the taxes.

Many people from all over the world ask this question, “Can anyone outside the United States invest in tax liens and tax deeds?”

Well, the answer is a yes.

All that person needs is a US TAX Identification or ID number, which is fairly easy to get from the IRS. What’s even great about it is – even foreigners have the opportunity to invest in tax liens and deeds. But of course, an investor not from the United States has to have all the needed due diligence in order to join the bidding. Here are a few samples of the most significant things one must have:

• Location
• Value
• Property Condition

Since international investors are away from the subject properties that are to be placed in auction, one cannot be in person near the site.

There are two choices that a potential buyer outside the country can do:

1. Have the due diligence through phone. With advanced software tools like Google Earth, counties can very well provide picture databases and map quests or MSN Live Search
2. Hire a Real Estate professional who can very well visit the property for you, take some pictures for you to check out, and do research for the investor.

Now, there are also cases wherein counties or states hold their auctions online and investors, inside or outside the country, can attend to. But again, the investor needs a real estate professional to check out the property or have the due diligence over the phone prior to bidding. Remember, it is always needed to see the property you plan to invest in.

The international investor can also just wait for the actual auction to be over and then ask for the list of the leftover properties known as over-the-counter tax liens. These tax liens are commonly available without the need to bid but by just mailing a cashier’s check with the details of the Tax Lien ID, the investor’s Tax ID, the Property ID, and Bidder ID. The county will then send the investor the Tax Lien Certificate of the property.

With today’s technology, investors from all over the world can now purchase tax liens and tax deeds in the United States.

These days, winning a tax deed auction may not be as easy as before as more and more people attend this exciting event.

As more and more people realize the great opportunities that lie behind buying tax deeds, the competition proves to be fairly difficult.

Here are some tips to winning a tax deed auction:

1.) Attend live tax deed auctions instead of online tax deed auctions. Most people prefer to bid in online auctions as it is more convenient.

2.) Choose a county that has a worth-it property that is not in a metropolitan area. There are chances that institutional investors prefer populated areas than rural.

3.) Choose to sit in front and in the center or near the isle so auctioneers can see you quickly.

4.) Attend live tax deed auctions even if the weather is bad. A lot of people are not really that serious that when the auction day turns out to be a bad-weather day, they prefer to not go and just stay home instead. This heightens the chances of you getting good deals.

Any more tips you might want to add?

A lot of people who are interested in buying tax deeds may wonder how do tax deed sales function. Here is a short but detailed walkthrough:

Before a scheduled tax deed auction takes place, the state or the county posts a list of all the properties that will be auctioned. Usually you can find it in newspapers but these days, posting a list in the internet has also become rampant. So if you are resourceful enough, you will be able to get a copy of  the list online (commonly in the county’s webpage). If you want the easy way, you can just contact the county and ask for a list that may come in CDs,  however, this usually comes with fee.

After posting, the public gets at least four weeks to decide and research about the the properties to be auctioned.

During bidding, the interested person will fill out a required form and will  have to claim a bidder number. There may be counties that will allocate these requirements few days before the auction while other counties prefer them during the actual auction day.

Some cases also require a proof of funds while there are also others that require bidders to have at least $2500 cash on hand or a cashier’s check that are to be submitted to the county. The money will then be refunded by the county if somehow the bidder does not win.

There are also some counties which are a less strict wherein they require you to have cash on hand during the auction. Note that counties have specific requirements so it’s always best to contact them and ask about these vital information.

During the auction, the bidding often begins at the amount that is being owed in taxes and goes higher from there. The highest bidder wins and will then receive a Treasurer’s Deed or a Sheriff’s Deed within a couple of weeks from the county.

It is then that the winning bidder becomes the official owner of that property and has the right to take possession of it or sell it.

What is a tax deed sale? A tax deed sale is not similar to a foreclosure wherein it is held by a financial institution because of unpaid mortgages. With the tax deed sale, the sale is being held by the government agency as it takes a real estate as a possession due to the non-payment of the owner of his back taxes. So the house will be sold in an auction wherein its minimum bid is calculated based on the amount of tax that is owed to the government, the interest that is accrued on back taxes, and of course, the cost of the sale.

Now a tax deed is nothing like a tax lien since a tax lien certificate is issued for the amount with interest while the owner’s tax refund checks can be garnished so as to collect the back taxes. There are states wherein the owners can get arrested or can get fines for failure of payment of the property’s taxes. If these tactics won’t work, the government will then ask permission to have the property on sale at an auction.

Take note, each state is different as some states are tax lien states while the others are tax deed states. There are even states that are a mix of both. So if you are indeed interested in purchasing properties at auctions, always conduct research into the procedures and rules of the specific state or county.

We may wonder what could be the reasons why so many people these days want to buy Tax Liens. Though the United State’s economy is literally struggling, this does not stop citizens to look for ways to gain a substantial amount of money. And yes, most of these people are looking in the direction of buying tax liens. There are others who maybe missing out on the great opportunities available for them because of insufficient information. But with today’s available resources including tutorials, updated news, directories, and informational blogs, there is no reason why a person couldn’t start learning about the wonders of buying tax liens.

So what are some of the reasons why people buy homes? First and foremost, this could just be the perfect move for you when you need extra cash. If you think carefully, you are paying the property owner’s debt and because of this, most of the time you will be receiving it back with interest that is accrued from the unpaid taxes of the property. Not only that, there is always the possibility that you can eventually acquire the property itself.

When you intend to buy foreclosed homes and there is indeed a foreclosure on your chosen property, this will eventually lead you to actually owning the property itself.

What’s also great in buying tax liens is that you can just bid at auctions depending on how much you would want to spend. There is actually no specific minimum amount of cash needed to get you started.

So, what are you waiting for? Learn, learn, learn!

In every state, there are several counties that have tax lien properties for sale. Why? Basically, there are property owners who are not able to pay the property’s taxes within a specified time and what happens is that the government will then seize it and then have it auctioned in public. This way, the government will be able to recoup for the property taxes owed.

So where do we find such properties? The best way to find one is to contact the specific county you plan to buy from. You can go online and visit the county’s website or you can call their number. They will give you the best details on when or where the next auction is and they can even advise you where to get properties for sale listings. You might also want to try looking in the local newspapers as most counties published the up-for-grabs properties.

It’s also highly recommended to actually visit the properties before actually bidding on them. Remember, if you get to win such property, you can do anything with it. You can make improvements and then resell it or you can have it rented. Or you can even move in to the property yourself. So just make sure to plan ahead so you won’t have any regrets in the future.