What if someone was to tell you that there is a secret real estate market that exists right in front of your eyes? Never mind calling your local real estate agent – chances are, they’re not even aware of it themselves. The ‘secret’ real estate market is the tax-defaulted real estate market, and this is how it works:
Local governments levy property taxes on real property owners in order to fund services it provides to its residents, like water, sewer, schools, etc. State law (in all 50 states) mandate how long a property owner has past the due date before it takes the most drastic measures to recoup the lost tax revenue.
All 50 states either A) Seize title to the real estate (called a tax deed) and sell it at public auction, or B) Sell the delinquent tax amount (called a tax lien) to an investor, who, for his or her investment, makes a statutory interest percentage rate on their investment (anywhere from 10-30% depending on the jurisdiction). With tax liens, interest accrues for the tax lien investor until a specified number of years after the sale, and if the homeowner doesn’t pay back the investor his/her costs PLUS all the accrued interest, the investor may foreclose on the real estate and get title!
DIFFERENCES BETWEEN TAX DEEDS AND TAX LIENS:
Tax DEEDS: Are actual deeds to the real estate. Once the money is paid to the local government, and the deed is recorded, YOU are the rightful owner to the property! You have the right to evict any occupant and move in to your new house!
Tax LIENS: Are interest-bearing LIENS (claims) to the real estate that are secured by the property. They DO NOT give you ownership until a foreclosure suit is brought in the county court where the real estate lies. Tax liens are a great alternative to putting money in a savings account, as the high interest rate outpaces the interest paid by a bank on a savings account several thousand times over!
These types of investments are available in all 50 states. They are offered for sale at varying times throughout the year, and have varying degree of sale terms.
WANT TO KNOW WHAT IS GOING ON WHERE AND WHEN? Learn how each state conducts sales, and when. See how much money you can make on your investment by clicking the e-book cover below. For ONLY $19.99, you can connect with ALL taxing authorities in ALL 50 states. See current inventory, sale dates & terms, and SO MUCH MORE! The work has been done for you! Happy investing!