Real Estate Property Tax Lien Investing Caution

Gather around children for a tale of royal power. Far back in history the king owned everything. (Does that remind you of Donald Trump?). Occasionally the king would grant property to a duke. Property ownership meant wealth, so the king would demand that the duke pay yearly taxes. To this very day much of the money that supports government comes from property taxes, for you see children, government is still king.

If the property owner fails to pay the tax the county government places a lien on that property. Every year property tax liens are sold at auction to the highest bidder. If the property owner fails to satisfy that tax lien the new owner of the lien can begin foreclosure and acquire the property. That seldom happens, but it is possible. Usually the liens are redeemed (paid) before the time limit expires.

You’ve probably seen the TV infomercial extolling the benefits of buying property tax liens. It’s true, property tax liens usually pay an above average rate of interest (it varies from state to state) and the lien is secured by some kind of real estate. Because of the infomercial and real estate seminars, tax lien investing has became very popular. There was a time in some counties when few people would show up at the property tax lien auction. These days the seminar gurus often arrive with bus loads of students ready to bid.

A good investment, yes, but there are some surprises for the uninformed. Because property tax sales occur each year, there may be liens on the same property, for different tax years held by different investors. Like this… Bill bought the 1980 lien; Hillary bought the 1981 lien and George was the successful bidder the next year when the 1982 liens were offered.

Here in Arizona the law is very clear that tax liens for different tax years held by different private parties have parity among themselves. So if the redemption period for Bill’s 1980 tax lien had expired without being paid he could foreclose on the property, but his foreclosure would not wipeout the liens held by Hillary and George. Bill might have a right to the property, but he could not get clear title until he pays off Hillary and George.

If Hillary and George had been influenced by that infomercial and thought that they could scoop up ownership of property for the simple price of a tax lien, well they are more than a little disappointed.

Oh, there could be one more surprise. Sometimes the state owns tax liens. When the state government forecloses all other privately held property tax liens are turned into waste paper.

Property tax liens certainly can be a good investment if you always keep one fact one mind… You are the duke and the government is the king!

About the Author

Markk Walters is an investor and manager of the Real Estate Investor Base Camp at http://www.CashFlowInstitute.com

Real Estate Property Tax Lien Investing Caution

Gather around children for a tale of royal power. Far back in history the king owned everything. (Does that remind you of Donald Trump?). Occasionally the king would grant property to a duke. Property ownership meant wealth, so the king would demand that the duke pay yearly taxes. To this very day much of the money that supports government comes from property taxes, for you see children, government is still king.

If the property owner fails to pay the tax the county government places a lien on that property. Every year property tax liens are sold at auction to the highest bidder. If the property owner fails to satisfy that tax lien the new owner of the lien can begin foreclosure and acquire the property. That seldom happens, but it is possible. Usually the liens are redeemed (paid) before the time limit expires.

You’ve probably seen the TV infomercial extolling the benefits of buying property tax liens. It’s true, property tax liens usually pay an above average rate of interest (it varies from state to state) and the lien is secured by some kind of real estate. Because of the infomercial and real estate seminars, tax lien investing has became very popular. There was a time in some counties when few people would show up at the property tax lien auction. These days the seminar gurus often arrive with bus loads of students ready to bid.

A good investment, yes, but there are some surprises for the uninformed. Because property tax sales occur each year, there may be liens on the same property, for different tax years held by different investors. Like this… Bill bought the 1980 lien; Hillary bought the 1981 lien and George was the successful bidder the next year when the 1982 liens were offered.

Here in Arizona the law is very clear that tax liens for different tax years held by different private parties have parity among themselves. So if the redemption period for Bill’s 1980 tax lien had expired without being paid he could foreclose on the property, but his foreclosure would not wipeout the liens held by Hillary and George. Bill might have a right to the property, but he could not get clear title until he pays off Hillary and George.

If Hillary and George had been influenced by that infomercial and thought that they could scoop up ownership of property for the simple price of a tax lien, well they are more than a little disappointed.

Oh, there could be one more surprise. Sometimes the state owns tax liens. When the state government forecloses all other privately held property tax liens are turned into waste paper.

Property tax liens certainly can be a good investment if you always keep one fact one mind… You are the duke and the government is the king!

About the Author

Markk Walters is an investor and manager of the Real Estate Investor Base Camp at http://www.CashFlowInstitute.com

Chicago Real Estate Investing

Donald Trump and countless other moguls built their empires on real estate, and, lately, a lot of people have realized the wisdom behind real estate investments. Chicago real estate investing is a formidable, yet very feasible, business. Chicago is a booming city that is economically sound with prime real estate everywhere. Owning a piece of land at the right location is like owning a gold mine: In just a few years, its value may jump to double the amount you started with in the first place.

But as with any business venture, jumping on the real estate investing bandwagon should be more than just a split-second decision. You must be well prepared before you commit to this daunting task.

First, you have to study Chicago real estate investing. Ask significant questions:

Where is the ideal location?

How is the market doing?

How much start-up capital should I have?

What are the different aspects of real estate investing should I be familiar with?

What type of property do I want to deal in?

When you have the answers to all these questions, then you can start thinking of Chicago real estate investment as a possibility.

When you start your business make sure you cover the important facets of promoting your Chicago real estate investment. Know the importance of advertising and how beneficial it can be for your business. You need to constantly let people know what is out there by advertising your property. There’s no such thing as too much advertising-it’s the lack of it that can hurt you.

You must also have reliable real estate agents handling your Chicago real estate investing business. If you surround yourself with hardworking and smart people, chances are you’ll be in it for the long haul.

Sitting at the negotiation table can be intimidating, but you must realize that you’re in this to win. Start your bargains at the lowest possible price: not too low, as this could be insulting for the seller, but low enough so that you’ll have a lot of room for haggling.

Be pro-active. Be on the watch for the smallest movements in the market and make sure you are ready to pounce when prime real estate is suddenly brought to the market.

Chicago real estate investing can be a lot of hard work but it can also be very rewarding in the end.

7 Tips For Real Estate Investing Success

1. Find out what you really want from your investments.

Set goals. Where do you want to be 5 years from now? Do you want a much larger nicer house for your family? How about waltzing into a car dealership and paying cash? Picture what you want.

Your investing needs to provide a living -and a lifestyle. You need to be able to look forward and enjoy your life and your family.

If you want to coach your children’s sports teams, your real estate needs to give you the time, not steal the time from those precious events.

With proper planning you can learn how to out-source but you’ve got to know where you want to go before you can get there.

2. Start simple and keep it simple

Sometimes it’s too easy to lose focus because of information overload. Our generation is being bombarded with more knowledge than any in history. And it’s only going to get worse.

Real estate is basic investing. Stick to the fundamentals. Go to the old gurus such as Tyler Hicks and read the old books. Markets come and go, but the basics never change.

3. Do your investing one small step at a time

Don’t try to compete with Donald Trump with your first property. Start small.

Get your first property going. Then move on to the second and the third. Don’t worry about what the stars and experts in online forums are doing. They’ve been at it for a long time. Naturally they can do more. And you will too if you don’t allow your investing to get too complicated.

4. Focus on one aspect of investing for six months

What are you really interested in? Foreclosures, Buy and Hold, Short Sales?

How is the market doing in your area of interest? Concentrate on one type of investment and soak up everything you can about it for six months. Not only will you become an expert but it will be almost second nature to you.

5. Design your investing around your strengths and weaknesses.

Okay, this is the challenging one.

We’ve been taught all our lives that winners do what they hate. It’s a conditioning process. In order to get it done, we’ve got to make ourselves do the dog work.

That’s okay for football or high school algebra, but real estate investing is different.

You need to like it. If there are parts of it you don’t like, don’t get bent out of shape about it. Sub those parts out. Out sourcing is one of the most valuable lessons you can teach yourself.

Don’t get upset about landlording if it’s not your thing. Out source that too. The most important point is to invest. That’s where the money is.

6.Stop analyzing and buy something

There are investors who paralyze themselves to death with market analysis. Another way of putting it is they are fearful of doing it. Jump in. Get your feet wet. Sure, you might make some mistakes but if you read the right real estate materials and study the right courses, as well as networking, you can cut those mistakes down to miniscule small potatoes.

7. Set aside some properties for your lifetime profits.

This is your own personal bank. Whether you’re a flipper, wholesaler, rehabber and you want to move those properties fast, this advice still applies to you.

It’s amazing to me how some investors let perfectly great properties get out of their hands because they want to make a quick profit. Occasionally, keep a few of them. Hold on and watch them appreciate. They may truly pay for your old age.

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