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Written by Tony Martinez
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The Truth About Successful Tax Lien Investing
It’s very important to understand the type of properties that tax lien certificates are offered on. I know the common thought can be some poor property owner who’s fallen on hard times and now is in danger of losing their home.
The truth is, we do not kick homeowners out of their homes, quite the opposite, we help homeowners keep their homes through the tax lien investment process, and you’ll learn exactly how in this lesson.
The next time you’re driving around town, I want you to look at every building as you drive down the street and realize that every one of those properties is real estate.
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Car Wash
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Dentist Office
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Health Club
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Grocery Store
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Storage Units
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Sports Bar
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Warehouse
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Gas Station
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Drug Store
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Pet Groomer
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Office Building
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Apartment Complex
| Golf Course
| Hotel
| Convenient Store
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Doctor’s Office
| Motel
| Pet Hospital
| Restaurants
| Condominium Complex
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Liquor Store
| Car Dealership
| Strip Mall
| All Land
| Duplexes
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| Triplexes
| 4-plexes
| Tire Shop
| Casino
| Sporting Goods
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Furniture Store
| Hardware Store
| Every Rental House
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As you will notice, not one of all of those different types of real estate is a person’s home.
More Truth About Successful Tax Lien Investing
I share this with you so that you begin to understand the reality and truth of tax lien investing. Tax lien certificates become available on every type of real estate, not just a person’s primary residence. Primary residences account for a fraction of all real estate in America, and a fraction of the tax lien certificates that become available.
The reason why it’s highly unlikely that a person ever loses their home through the tax lien certificate process for a few hundred or few thousand dollars in back taxes is because property taxes only account for a small fraction of the value of the property, typically 1% to 3% maximum.
Here’s Why Homeowner’s are Protected
from Losing their Home
One year’s property taxes on a $300,000 home is only $3,000, and with redemption periods, which is the grace period to pay property taxes ranging from 1 year to 4 years, as you can see, the homeowner has plenty of time to come up with the money. Just like you wouldn’t lose your home for a few hundred or a few thousand dollars in property taxes, other people simply don’t, either. Worst case scenario, if they really had to, they could sell their property, which pays the back property taxes, and then have tens of thousands or even hundreds of thousands of dollars left over.
Additionally, most homeowner’s have a bank mortgage. If the redemption period were to expire, and property tax foreclosure was initiated, by law, all the other lien holders must be notified by certified letter giving them the state statutory time to redeem before foreclosure is complete. In this scenario, the bank most likely will step in and pay the delinquent property taxes to protect their mortgage from being extinguished from the property.
So, the idea that homeowners falling on hard times are being kicked out of their homes has always been very far-fetched, extremely rare, and a highly unlikely scenario.
Think about it, would you lose your home for a few hundred or a few thousand dollars in property taxes? Of course not, and neither would anyone else.
The truth is, when it comes to primary residences, well over 99% of tax lien certificates redeem, which means property owners keep their homes and investors secure their high, fixed, secured interest rates.
Tax Lien Certificate Investors Benefit Homeowners
It’s important to understand than when we acquire a tax lien certificate on a property, the property owner benefits because they’re given the additional redemption period (grace period) to pay their property taxes. As mentioned earlier, redemption periods range from 1 year to 4 years depending on the state law, which gives the property owner ample time to pay their property taxes.
I’m unaware of any other bill or creditor that allows a person to remain delinquent for 1 to 4 years without any negative consequences.
In most states banks initiate their foreclosure process as early as 120 days, which can be devasting for homeowners.
The tax lien certificate system is the fairest system to help people who may need extra time to pay their property taxes.
The Win-Win-Win of Tax Lien Investing
The Property Owner Wins
Investing in tax lien certificates offers a triple win. The property owner wins because they’re given an additional 1 to 4 years to pay their property taxes, which most all property owners do, and without any danger of losing their property. Additionally, there is no negative reporting on their credit report.
The Community Wins
The county wins because they collect necessary property tax revenue for vital services that include public schools, police departments, fire departments, parks & recreation departments, roads, hospitals, and public libraries.
The Tax Lien Certificate Investor Wins
The tax lien investor wins because we safely earn fixed secured interest rates ranging from 8% to 24% interest per year.
Since homeowners basically never lose their home due to delinquent property taxes, how are properties acquired through the tax lien investment system?
How Properties Acquired Through Tax Lien Investing
Over the past 30+ years of expert experience, we’ve developed several proprietary “Get the Property” strategies that are specifically for acquiring valuable real estate at huge discounts through the power of tax lien investing. We target properties that are not a person’s primary residence because we understand that primary residences always redeem.
The vast majority of the properties we acquire through our tax lien investment systems are vacant at the time of acquisition. Through our research process we always know whether the property is occupied or not before we acquire it.
Investors will always have the option to focus on vacant properties only, which many of our beginning members do.
Here are a few examples of properties acquired through USTLA’s Tax Lien Investment “Get the Property” Strategies:
Total Purchase Price
$6,309.07
Total Purchase Price
$4,518.82
Total Purchase Price
$16,600
It’s Your Turn to Become a Highly Successful
Tax Lien Property Investor
As anyone can see, with the proper knowledge, systems, methodologies, and support, tax lien investing provides an amazing opportunity for financial freedom, especially for beginner’s starting with limited capital.
There’s a lot of inaccurate and misinformation regarding tax lien investing in the marketplace, and here at USTLA we remain committed to helping people achieve their financial goals by revealing the truth through our real world, evidence based, expert experience developed over the last three decades.
To continue learning more about how you can become a successful tax lien investor, please refer to our other invaluable free training resources available here on our website.
For a more comprehensive in depth training for beginner’s, we’re also giving you Immediate Free Access to our invaluable self-paced 3-Module Online Video Tax Lien Investing Crash Course.
