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.

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.

What you can expect from a tax sale all depends on the state you are attending to. Just remember, counties and states have different processes in doing tax lien sales unlike tax deed sales wherein they are most likely to be the same.

Take Florida, Illinois, and Arizona for example, these states have interest rates that are bid down. Other states, on the other hand, have interest rates that are in constant and their lien prices are bids up. Now a premium is the fee that is bid up from the original amount due, it’s also called as overbid. And again, different states handle these things differently.

There are states that you can actually get an interest from the premium that is paid for tax liens such as Indiana and Alabama. While there are also states that you are not able to receive an interest on the premium like West Virginia. States that somehow don’t pay interest on the premium and don’t give back the premium to its investor include Vermont and Colorado. But there is one state wherein you can bid down its interest rate to zero and then to premium – New Jersey.

There are also states that use a random selection process and even the so-called round robin process to award the tax lien certificates during tax sales. In the first process, the person who conducts the auctions randomly chooses bidders. Oklahoma and Wyoming use this procedure.

The round robin process on the other hand, the auctioneer will offer a parcel according to the list to the next waiting bidder. The problem with this procedure is that you are not able to choose freely which properties you would somehow like to bid on to. So you will really have no idea which properties will be offered to you and the only thing you can do is to either accept the offer or decline it. Some counties in Colorado use this procedure to tax liens on certain amounts.

It is indeed important that if you decide to bid on a certain state or county, make sure to know the procedures so as not to be disappointed and to fully take advantage the great opportunities being offered in tax lien auctions.

Question 1: What is a Tax Lien?

A tax lien is a right to take ownership of a property due to tax payment delinquency usually by a federal government, a state, or even a county.

Question 2: Who can buy tax lien certificates?

Anyone who has the money can buy tax lien certificates. Just remember, you are only paying for the owner’s unpaid taxes, so you are not actually doing any foreclosures.

Question 3: What is the limit of acquiring tax liens?

There is no limit actually. You can acquire as many tax liens as you like if you have got the cash to pay for them.

Question 4: Where do I pay?

You will be paying the government agency not brokers or any other intermediaries.

Question 5: Who will then pay me the returns?

The government agency to which you paid the delinquent taxes for will be the one to contact you when the property owner has paid for his taxes. The agency will then require that you return the tax lien. After the process, you will be receiving a government check.

Question 6: Are tax lien certificates transferable?

Yes, tax liens are transferable. You can transfer these to anyone you like.

Question 7: Will all the counties and states have the same processing when you purchase tax liens?

Actually no, each county and state have different rules to acquiring tax liens. So before you go and purchase tax liens, make sure to research about your chosen county’s rules.