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Tony Martinez Reveals Some of the Risks Associated with Tax Lien Investing
Becoming a Tax Lien Certificate investor can obviously be a lucrative investment strategy; so what are the risk factors one should know about. The more obvious risk factors are: Bankruptcy, IRS liens, environmental issues, worthless lands, condemned structures, undesirable neighborhoods, and industrial properties. You may be thinking, “sounds risky.” Consider this, these risk factors exist even when you’re purchasing your own home. Although these risk factors exist with Tax Lien Certificates and Tax Foreclosure Real Estate, each can be easily avoided.
Tax Lien Certificate investor: How to learn to become one...
It’s not possible to teach the strategies on how to eliminate these risk factors in this short article, so instead I’m going to give you one technique we use that basically eliminates the possibility of environmental issues, unusable lands, condemned structures, undesirable neighborhoods, industrial properties, and worthless properties. Here’s how: We only acquire Tax Lien Certificates on single-family residential homes in great neighborhoods, with top school districts.
Let’s say we’re interested in investing in an entirely new area we’ve never invested in before, and we’ve never visited the area either. Let’s also say that the area is in a completely different state, and we have a list of 11,680 Tax Lien Certificates available.
Step 1: we’ll go online and find a real estate agent in that area and ask the real estate agent this important question… “can you give me the name of the area and zip code of the neighborhood that has the highest home values, and best school district.”
Step 2: we’ll locate this zip code on our list of Tax Lien Certificates, and highlight all of the single family residential homes with Tax Lien Certificates and/or Tax Foreclosed Homes that fit our financial criteria (how much we have to invest).
With just these two steps, we’ve basically eliminated undesirable neighborhoods, industrial properties, worthless lands, and environmental issues. Why? Because single-family homes with the highest home values don’t exist in undesirable neighborhoods, and this step also eliminates industrial properties, and worthless lands. Additionally, if there was an environmental issue, the homes couldn’t have been built to begin with.
Step 3: we’ll then take these properties through our 14-point due diligence process, which is a combination of online research, and phone calls. Once we’ve gathered the information on our 14-point checklist, then even a novice Tax Lien Certificate investor will know whether or not it’s a great investment.
Remember, Bankruptcy, IRS liens, and environmental issues are all of public record, and are easily revealed in the due diligence process.
The secret to successfully becoming a Tax Lien Certificate investor is one phrase: Due Diligence. Yes, there are some risk factors associated with investing in Tax Lien Certificates, yet, with the proper due diligence methodology; these risk factors are easily avoided.
IMPORTANT: the due diligence process isn’t complicated, and doesn’t take much time; it’s simply a series of steps to gather information, which reveals whether or not it’s a great investment. If you can commit at least four hours per week in your spare time, and it doesn’t have to be during business hours, then you can become a very successful Tax Lien Certificate investor.
Tony Martinez is the Co-Founder and Co-Chairman of the US Tax Lien Association, which is an organization that is committed and dedicated to helping others achieve total financial freedom through the power of investing in Tax Lien Certificates. With over 20 years of expert experience, Tony is the world's #1 authority on the subject of creating enduring wealth through the little know strategy of investing in Tax Lien Certificates, which gives anyone the opportunity to earn guaranteed fixed rates of returns of 18% – 36% interest per year, and acquire valuable real estate for approximately 10% of market value.