I have received this question a lot from my friends in outside the US who hear about the concept of Tax Lien investing.

“Can I invest in Tax liens and Tax deeds even though I am a foreign citizen and don’t live in the US.”

The question is yes. As long as an investor can get a US TAX Identification number, which can be obtained from the IRS fairly simple, even a foreign citizen not living in the US, can invest in Tax Liens and Tax Deeds.

But just as any other Tax Delinquent Property investor, an International investor needs to make sure he do all the necessary due diligence before bidding;

In my experience the most important areas to do Due diligence on are:

- VALUE,

- LOCATION,

- ENVIRONMENTAL ISSUES, and,

- CONDITION of the property

These should be checked prior to investing any money.

Since the international investor lives hundreds if not thousands of miles from the subject properties, obviously the due diligence can not happen on site and in person.

Therefore there are two options:

1. do the due diligence via phone, and software tools like google earth, county provided aerial pictures databases, and mapquest/maps.google.com/msn live search..
2. the second less hands on option is to hire the services of a Real Estate professional who for a fee is usually more than willing to visit the property for you, take some pictures and do all the necessary research for the investor..

If the auction is online, then the investor can attend it virtually. If it is live, the following two options exist;

- Travel to the auction location, although the travel costs cuts into the Investment Profits.

- Again hire someone to go to the auction in place of the investor armed with detailed directions on what they should bid on and how low or high they are allowed to go..

A third less known option is for the investor to wait until the actual auction is over, then request a list of all “left-over” properties, which are also called “over the counter tax liens.”

These are usually available without any bidding, but just sending a cashier’s check to the county along with the details on the desired Tax Lien ID, the Property ID, the investor’s Tax ID and Bidder ID and the county in turn will then mail the investor the desired Tax Lien Certificates (if still available at the time the mail gets to the county).

The advantage here is that the investor can do all the work without particular time pressure from home on the phone and computer.

Make 16-32% on your money Buying Tax liens from the comfort of your home.

Most people teaching Tax Lien Investing or actually doing the investing believe that the only way to obtain a Tax Lien is by going to the actual auction in person and bid. This is still the normal procedure for most counties but what most people don’t know is a little hidden secret which allows anyone to get them from the comfort of your own home. All you need to have is a computer and access to the internet or in the worst case a stamp, a piece of paper and an envelope.

Just imagine what you could do if you would not have to travel to make money.

Technique #1:

More and more states and counties have already transferred their Tax Deed auctions onto the internet and now the Tax Lien States are following suit and doing the same with their Tax Lien Auctions. In Maricopa County, AZ (Phoenix, AZ), between 6,000 and 11,000 tax Liens come up for auction each year in January or February through their own tax Lien auction webpage. Webpages like www.bid4assets.com also on a regular basis host county Tax lien auctions. All you need to do is look online for Online Tax Lien auctions in the area you are interested in, read the terms of the auction, and participate. In most cases you will have to send a cashier’s check (or a wire transfer) with a security deposit, so the county is sure you are a “real” bidder, and then if you buy something, they will use these funds as part of the payment. If you don’t buy something they will send you the money back.

Technique #2:

But even if you miss a state’s/ county’s live auction, there is still hope. You still can make extraordinary returns on your money with just the expense of mailing a letter.

Here is how this works;

Usually during a county Tax lien Sale, not all Liens on all properties are being sold. The “left-over” liens, which are now held by the state, are placed on a publicly available list (and more and more even online available).

You as an investor can now purchase these property liens outside of the auction at the highest interest rate available. All you need to do is request the most recent list of “Over the counter Tax liens from the county. If it is not available online, the county often can mail you a CD for a nominal charge or send you the actual list (you might not want to do that in a large county, because the county often charges $0.50 per page for the actual paper list.

Once you have the list all you need to do is select the properties you want, send the county a cashier’s check for the lien amount along with the Parcel ID/ Lien ID and your Bidder ID (which you can also get by mail or over the phone) and you are done. The county will then send you your Tax lien Certificates (TLC’s) by mail.

Now you just wait until the owner redeems the Tax Lien and you get your money plus a GREAT interest rate back and then you do it all over again. Or if the owner never redeems the Tax lien you have hit the Jackpot and can foreclose on it.

What are “redeemable Tax Deeds” like used in Texas Tax Deed auctions

In most states offering Tax Deeds the redemption period ends usually the day prior to the actual Tax Deed Sale. However there are a few noted exceptions like for example the state of Texas, which offers “Redemption Tax Deeds” or also called “Redeemable Tax Deeds”

Texas is a Tax Deed state, meaning that it does not offer tax liens. Instead after only 2 years of a property being Tax Delinquent each county such a tax delinquent property is located in has the right to put up a Tax Deed Auction and sell the actual property.

In many counties around Texas this happens as often as once a month and a steady stream of properties are being sold to the highest bidder.

The Distinction of Texas Tax Deed sales is that after the sale, the former owner still has the right to redeem the property for a time period of ½ year under normal circumstances or even up to 2 years if the property was registered as a homestead in the state of Texas.

However, if the original property owner redeems the property within this post-sale redemption period, he will have to pay a steep penalty of 25% of the high bid. So if a property sold at Tax deed sale for $20,000 and the former owner redeems it after only 1 month he will have to pay the $20,000 plus a fee of 25% or $5,000 for a total of $25,000.

So you can make as much as 25% return within only 1 month which equals an annualized return of 300% if all you do is repeat this over and over again.

Like in any market, Tax Deed have their share of problems. For example there is competition. Excessive competition during tax deed auctions auctions will affect the prices drive them up closer to the true market value. However in the Tax Deed arena has some ways to circumvent the number of problems I am listing below;

In this publication I am focusing on the most drastic problem investors face when attending Tax Deed auctions, particularly when targeting higher value properties.

The problem is that Tax Deed Sales are usually a Cash affair. That means you can’t come to an auction with $500.00 in your pocket expecting to be able to buy a $100,000 property and then spend the next few weeks qualifying for financing, like it happens in the regular market for residential homes. Instead most counties have regulations expecting any winning bidder to come up with the full cash within somewhere between 24 and 48 hours from the sale.

As a result, because most of the population does not have $100,000 or even $10,000 sitting in their bank accounts unused, the vast majority of the population will and cannot attend the auctions to buy a property.

Solution: Partner with investors

One of the fastest and easiest ways to solve the CASH requirement in a Tax deed auction if you don’t have the cash yourself is to partner up with someone who has the cash. As they say “If the deal is good enough, the money will show up.” In my experience of doing over 5,000 Real Estate Deals in the tax Delinquent real Estate area I have yet to see where this is not true. Any investor in his/her right mind will say yes to a deal you bring to them, where they can buy a property for as little as 10-30% of market value, where you do all the work and they give the money and then you share the profits in some way (up for negotiation).

And finding investors is easy. Just place an ad into the newspaper or attend a meeting of your local Real Estate Investor’s association. Or just ask around, I am sure you have someone in your extended circle of friends who has some money available. If none of this works go online and look for Real Estate investors or private money (also called hard money) lenders.

Like in any market, excessive competition at Tax Deed auctions will affect the prices drive them up closer to the true market value. However in the Tax Deed arena has some characteristics, which prevent this from happen.

Characteristic #1: Cash requirements.

Tax Deed Sales are usually a Cash affair. That means you can’t come to an auction with $500.00 in your pocket expecting to be able to buy a $100,000 property and then spend the next few weeks qualifying for financing, like it happens in the regular market for residential homes. Instead most counties have regulations expecting any winning bidder to come up with the full cash within somewhere between 24 and 48 hours from the sale.

As a result, because most of the population does not have $100,000 or even $10,000 sitting in their bank accounts unused, the vast majority of the population will and cannot attend the auctions to buy a property.

Characteristic #2: Insurability of title

Most people and even banks think that the title of a property purchased at Tax Deed sale is not insurable and first must pass through a Quiet Title Suit. While this is not exactly true (there are ways to insure these properties) banks in particular are very conservative institutions, and they usually (mostly) do not finance properties purchases from Tax Deed Sales. So even if an investor does his due diligence in advance, finds an awesome property with a high value and a very low starting bid, it will be almost impossible to get a regular bank to commit to financing this deal.

As a result not only does the county require cash but it is almost impossible to get that cash from any conventional financing institution.

So short of obtaining a private money loan (bye the way a very feasible option), the only way to get a property is to have the cash at hand, something only a small fraction of the general population has access to at any given time.

Characteristic #2: Image

Even for properties where bidding start at the lower end of the spectrum, most people shy away from these auctions because they can just not imagine that a property which has an opening bid of $300.00 is any good. These properties are admittedly not in downtown of a larger city, but rather in the outskirts or in more rural areas, but in the majority they are pretty nice properties, worth perhaps $5,000 to $10,000 and usually vacant or raw land, but that also means that competition on these is usually quite low and you can get some awesome deals here.

And many investors skip these properties in favor of more valuable pieces of land.

Tax Lien and Tax Deed investments are a extremely safe form of obtaining huge returns on your money. Sometimes these returns are as high as 16 to 36% in the Tax lien area and can exceed this Massively if the investor forecloses on the property or gets a good deal in a Tax Deed auction.

Counties and Municipalities need money to pay for their infrastructure, schools… and therefore they need to collect the Property taxes. If someone is not willing to pay these taxes, the State takes some measures to ensure they get paid. One of these measures is to sell the property taxes to investors in exchange for them receiving a high interest rate and the right to eventually foreclose on that lien. . The other one is to after a statutory waiting period (2-5 years) sell the property itself at auction.

For much more details about how Tax Liens and Tax Deeds work please visit the webpage www.SecretLandProfits.com

However, there can also be some problems with Tax Liens and Tax Deeds which most of the self-proclaimed “Gurus” do not mention. They can easily be mediated with a little research and due diligence but they do exist.

Problem #1: Usability of the property:

Nothing replaces going out and looking at the actual property you are about to purchase a Tax lien on, or bid on during a Tax Deed sale. Although a high percentage of the properties coming up for Tax Lien sale have NOTHING wrong with them, there are properties you rather do not want to own. Property could be in the middle of a wash. Or it could be a “measuring mistake” and that ½ acre property in the middle of the city, is really 10 feet wide and 2,178 feet long, making it impossible to every put anything on it.

Or it could be so steep that you will never get an building permit. Etc.

This is easy to notice if you do a few steps:

1. Get an official county Plat map of the lot. If it is such a small but long strip of land you will see it right there.
2. Go to the land and look at it. If you need a helicopter to get to it, or if it is soo steep that you need Mountain climbing gear to walk it, it is probably not such a good property to own.
3. Call the Flood Control District or the County Planning and Zoning department and ask them if the property is in a registered Flood Plain.

Problem #2: the outstanding Taxes are more than the value of the property:

This is something that usually happens only in lower value properties and in states where it takes many years for a property to come up for Tax Lien or Tax Deed sale. Each year, the county does not only assess the taxes for the property, but it also slaps hefty Fees and Penalties on all properties with Delinquent taxes from prior years. This along with the Interest accrued over several years can add up to MUCH more than just the simple initial tax lien amounts. A property with an annual property tax bill of as little as $200.00 can have outstanding back taxes of easily $5,000 or even more after a few years, due to all the fees and penalties.

So make sure that when you invest in Tax Deeds or Tax liens you get a good estimate of the value of the subject property.

Problem #3; Environmental Problems.

This is the problems most people fear most, particularly in vacant land Transactions, however if you have any concerns about this, there are some easy steps to minimize the risk of buying a contaminated property.

Here is what you can do:

- Many townships and cities have lists of condemned properties.

- Visit the property and look around. Of course you might not be able to do this if the property is an occupied single family residence, but you can do it if it is a vacant piece of land.

- Call the State’s Environmental Agency ( like for example in Arizona the “Arizona Department of Environmental Quality”). They can tell you if the subject property is on any of their lists.

- Check the recorded documents and see if anything concerning Environmental issues was recorded against this property.

If you do all or at least a few of these things you should be quite sure that your investment is safe

One of the myths of Tax Delinquent Property Investing, is the myth that all these properties coming up for auction are junk.

Why else would someone let a property that they own free and clear without a mortgage go for property taxes. Couldn’t they just sell it?

And if they can’t sell it how bad does it have to be for them to see a Tax Deed sale as the only option.

Well the truth is, there are some bad properties out there. However I would estimate that the majority of properties sold at a Tax Deed Sale are actually of remarkably good quality. There are many subdivided lots in decent subdivisions for sale and quite a few Homes. The homes usually are in a little bit of disarray, but they can mostly be fixed by a qualified contractor.

Thee is an entire host of reasons why someone decides to stop paying property taxes and let their property go for taxes. Here are a few of them.

1. Divorce: according to statistics almost 50% of all marriages in the US get divorced at some point in time. Some of these divorces are amicable, many are not. And in case of one of these less than amicable divorces the different parties don’t want to have ANYTHING to do with each other. Yet, they often get stuck with property which to them “smells” like their former partner/spouse. That is in many cases more than they can handle. They don’t want to deal with it, because it reminds them of their ex-spouse so they rather just give it away than have to deal with it. I have personally bought properties like that for something like $323.00 and sold it days later for over $12,000.00

2. Retirement; a lot of the cases I am seeing are from people who were planning to retire in a particular area of the US but then decided to stay where they are, closer to the family. Now then own this piece of land (usually) somewhere across the US and they have lost all interest in it. Plus since they live so far away, they don’t want to deal with a Realtor and they have lost all touch with property values in that area.

3. Inheritance: another frequent case is when someone has inherited a particular property but already has a home. Now dealing with this second property becomes a headache for the seller, particularly if the seller lives a little further away from the property, or even is an out of state owner. These sellers are some of my favorites because they tried to manage the property from away, but now they are only just frustrated, while not having ANY emotional affiliation to the property.

There are many more reasons, but I wanted to at least mention these three. More another time.

For many years, land has been said to be a sound investment in many ways. However, if you want to build your wealth by purchasing land, you need to be aware of a few things first and answer a few questions. What type of land is it that you are interested in? Is it raw land? If so, remember that raw land unimproved property. It will have no utilities, sewers, structures and sometimes will have trees that need to be cleared before you can build on it.

In doing your homework, you will need to determine the use of the land. Will you be flipping it to resell? Do you want the land for commercial, residential, recreational or agricultural? Once you’ve determined what you want to do with the land, you can move forward with finding the land you are looking for. And once you found it you can proceed to your investigation of the value of the land. The Value of a piece of land now and in the future depends on a variety of factors. Mainly what you want to do with the land, or in other words what the purpose of the land will be in the future.

There can be many benefits to investing into raw land, such as appreciation, the potential for value creation through sub-dividing it. For example, if you purchase a piece of land in an area that is experiencing high growth the price of the land might multiply in a relatively short period of time. With Land you don’t have to worry about Tenants, broken toilettes, mold, termites, theft… .

Once you own a piece of land and you want to sell it there are an entire host of value creating options available for you. One option to consider would be subdividing the land and selling it off in individual pieces. This allows you multiple opportunities to make a profit, because there are many more people with a budget enough for a small piece of land than there are for a large piece of land. So by splitting the parcel into let’s say 5 pieces, you now can sell each piece for much more than 20% of the initial sale price of the large piece. Instead you might be able to sell the smaller (1/5^th) parcel for ½ or even almost the same price that you could sell the large piece, effectively multiplying the return on your investment.

You can also sell a piece of land to an buyer and offer them Seller Financing at a nice Interest Rate, sometimes even well above market average. This will not only allow you to sell the property at a higher overall price (because you are offering it with a low down payment, which makes it more accessible to people) but you gain considerably in the long run through the interest payments.

Another factor to consider what to do with your land and how to sell it includes planning and zoning of the land and the surrounding area. You will want to check with city departments regarding these issues. A Pending Re-zoning of an area close by area could potentially make your parcel’s value skyrocket, or the opposite can also be true. The County officials can offer you tons of information, including the existing uses, future development forecasts, maps of the surrounding areas, flood zones, etc. They also control building codes, subdivision regulations, permits for curb-cutting and housing codes. You can also find aerial photos and plat maps, which are a dated real estate tool, but it helps in you evaluation process.

You want to educate yourself about the ways to sell a property and the factors influencing the value of a piece of land before taking on the task of purchasing land, as you want your wealth to grow, not fall. You need to be well informed, or you will end up with a piece of land you paid too much for and can’t do much with it. After all, this is your future we are talking about. So, be well prepared.

The good news is that there are programs out there like my www.LandForPennies.com free CD which offers you lots of information about these subjects and can help you make better buying decisions and create your desired and deserved wealth fast and Safe.

One real estate technique that is crucial when buying or selling Tax Delinquent real estate or any form of real estate for that matter, and that is determining real estate value. We all know that sellers are trying to sell their properties for top dollar and buyers are trying to steal properties from sellers. Let’s face it, you don’t want to buy a property for $200,000 only to find out after the deal is done that its real value is $100,000 or $150,000. No one likes to lose money. We want to build our wealth and in order to do this we have to gain real estate knowledge.

The absolute solid answers will come from a real estate appraiser, but you will have to pay for an appraisal (in many states it will cost anywhere from $400 to $900). If you don’t have that kind of money, or if you’re not sure you want to make an offer on a particular property, you will want to take another approach.

You can easily research on your own to determine the real estate value of property. Just go down to the County Assessor’s office who has sales records of every sale in the county. Most counties and states in the US have a form that needs to be filled out upon Title transfer which specifies how much was paid for the property and whether it was a cash sale or involved a mortgage. Based on what those properties sold for, you’ll get an idea of the approx. Value. You can also ask a professional. Your local real estate office will surely have the comparables in the surrounding areas. Ask them for the comparables for the area you are interested in. You really need between three and five comparables to provide you with a close dollar figure.

If you are dealing with a house in a more rural area where there are no good comparables anywhere close, what you can do is talk to an insurance agency or contractor to see what the replacement cost would be on a particular property. They key is to ask them for a price to replace the existing property. This gives the real value of the property. If you tell them you want to replace the existing structure “exactly” as it is you will have a good number to go by. Once your know the real estate value of the property you’re considering, you can make a much better judgment on whether you want to go forward with the project.

How to Buy Land 3

You’ve done your homework on what to look for in purchasing land. You’ve got your cash in hand. Now how do you find these properties?

You’ve got numerous options. You can start by looking at the Multiple Listing Service or going on the internet looking at a page like www.Realtor.com. These are great places to find properties but you will have to pay Market Value. If you are like me you don’t want to pay Market value for ANYTHING!!! Of course you also check with the local farmers, city departments if you want a vacant lot within the city limits and last but not least the most common way to find any kind of real estate is by contacting a real estate agents. While this is fine, it won’t get you a bargain, and I am all about bargain.

Therefore, let’s look at some other, better options to find property for values way below market. Of course, you have the newspapers and real estate magazines you can look through to find the occasional Bargain. When you are out driving you will also see “For Sale By Owner” signs.

My favorite way of buying land is to buy properties which have Back Taxes accumulated. If someone is not able or willing to pay their back taxes, that tells me that I usually have a motivated seller on hand. Someone who is in need of some cash or someone who just doesn’t want his/her property anymore.

Tax Liens or Back Taxes is subject to public record so all you need to do is go look them up, apply a set of rules to the list of properties, based on your investment criteria, and then you have a good list of potentially Motivated sellers at hand.

Some of the juicier deals will take a little effort on your part. You will have to do a little research on several properties until you identified a few which fulfill your criteria when you find them (and there are TENS OF THOUSANDS of them out there), you can make a fortune on each of them. Nowadays, you don’t even have to leave home to get a lot of the information you need. In many counties most of this information can be found on the county property appraiser website.

And the beauty is that in the Tax Delinquent Property arena, you often only need a few hundred dollars to buy a property worth Tens of thousands of dollars. They key to making the most on these is to act first and have a little bit of cash on hand for a quick close. These tips will put you in the right position at the right time to build your wealth.