They say that Real Estate Investing has made more millionaires in America and many parts of the world than any other form of business or investment. Many individuals and experts also say that it does not take any money of your own to get started in Real Estate Investing. While there may be some truth to that statement, the fact is that many of the creative investment techniques mentioned by the experts may not work for everyone. Now the reason they may not have worked could be due to many different things. It may be due to the area you are looking to invest in, or you may not have been able to obtain the capital or a loan to invest with. Also, it may be difficult to find an investment partner/co-signer with good credit, and the ones with good credit may not be willing to invest with you at the moment. Whatever your reason may have been for not having gotten started in Real Estate Investing, do not despair. But is there a way to start inveting in real estate with almost nothing at all, even if you have bad credit? Yes, Absolutely Yes. The best part about it is that you may be able to invest right from the comfort of your home. So, what is this form of real estate investing that I am talking to you about? Well, it's Tax Lien Certificates. What are Tax Lien Certificates, you may ask!
What Are Tax Lien Certificates And How Are they Sold?
Tax Lien Certificates are issued by a county to investors who have paid delinquent property taxes on someone elses property. You see, a county needs property taxes to pay for such services as Police Departments, Fire Departments, Schools, and other governmental operations. When a property owner does not pay their property taxes this puts a strain on the county and its ability to pay for such sevices. As a result many counties allow investors to pay the delinquent property taxes in order to obtain the necesary funds. Tax Lien Certificates are usually sold to investors via auctions.
How Do I Make Money?
As an investor you can earn anywhere from 16% to 50% return on your investment depending on the State or County. At an auction the percentage paid out to investors on a Tax Lien Certificate depends on what the county is offering at the time and the amount of investors interested in that property. The percentage is bid down among investors. In other words, an auction for a Tax Lean Certificate can start at 25% interest and end at 15% depending on the amount of investors interested in that property. Or, if you are bidding to pay $100 for a for someone elses property taxes and the county currently pays 25% return on your investment and there are two other investors intrested in the same property. Now if one of them is willing to accept 24% from the county and the other is willing to accept 23 and 1/2 %, then you would have to be willing to accept a 23% return or less on your investment. Let's say you are the winning bidder at 23%. The county then collects the funds from you and gives you the certificate. When the property owner is ready to pay for their delinquent taxes, the county will collect the amount owed plus any percentage placed on the taxes at the time of the auction. The county will then issue you a check for your $100 plus the 23% or $23 for this matter. You will never have to meet the property owner. The county collects the funds and sends you the check. Now, if the property owner does not pay the amount owed to the county after a certain amount of time, (usually three years) you could end up owning that property for much less than it's actualy worth regardless of whether it has a mortgage or not. You would not be responsible for the remaining balance on the mortgage. That is why some investors choose to bid on the same property year after year. Their hope is that the property owner will not pay their taxes so they could end up owning that property. There are many other ways to make money with Tax Lien Certificates, like selling your certificate to other investors. You can invest in Tax Auctions at Bid4Assets.com
