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21st Century Tax Lien Investing

Aug 12, 2008
There are four reasons why any savvy 21st century investor would want to learn as much as possible about tax lien investing. They are as follows.

Reason#1-Internet Tax Lien Sales:

The Tax lien market has seen considerable change over the last couple years.

It seems like only yesterday that a few of us would gather on the courthouse steps of what county in whatever state we were bidding for.

You would have the pick of the litter and watch the face of the county assessor drop as we all got our fill and stopped bidding.

In the bad old days the assessor would rarely, if ever sell off all of the liens that they had available. That would mean that the county would incur the wraith of an unfunded municipal coffer.

When a person does not pay their property taxes that county is left with an ever expanding deficit of funding for such things as road maintenance.

The bane of the tax assessor was the best kept secret in American investing vehicles, the tax lien. The word just never seemed to get out sufficiently about this amazing investment, thus a lack of sales of tax liens was a problem that needed solving.

The savior of the county came with the advent of the internet. Some of the more savvy assessors grasped the theory that folk just do not always want to travel, even for the BEST investment that money could buy.

The obvious solution was to bring the auction to bidder!

You can now sit in the comfort of your own home or office and make a fortune from GOVERMENTALLY SECURED investments!!! Several states such as Florida and Indiana are truly on the cutting edge of internet technology in the way they handle their auctions.

I, for one am more than happy to have the option to NEVER stand in the rain with my hand up again! While there are still a few of my PLATINUM level states that I heavily invest in and still have to travel to, I now can built my fortune ever higher by merely clicking my mouse!

Reason #2-Ease of Research:

Back in the good old days researching the properties that I wanted to bid on was tedious at best, impossible at worst.

Please do yourself the favor of NEVER bidding on a tax lien for a property that you have done no research on.

Sometimes a tax lien may seem too good to be true nine times out of ten it is exactly that TOO GOOD TO BE TRUE.

5 acres of land for pennies on the dollar sound great right? What if it is landlocked on all sides?? What if you need to drill a 1000 foot deep well??? What if it is an environmental waste dumping ground???? Get the picture?

The research phase of your tax lien purchase is going to be the difference between hitting a home run-redemption with full interest paid, possibility even a grand slam-getting a property for pennies on the dollar OR owning a piece of environment disaster history, made a parcel of useless land that YOU now get to pay taxes on.

Utilize all the tools that are now available to you at your finger tips. I say again GOD BLESS THE INTERNET!!!

Satellite photography has brought to us the power to look at any house in the nation within a few seconds. Like the old saying goes good fences make good neighbors.

Do not bid on a parcel that sits next to a junkyard; noise, dust, stench, environment waste, etc. will all be waiting for you if you win this gem! Good luck selling it!!!

A neighbors yard can look like a junkyard. A Satellite photo can show you if the neighbor has a messy back yard, or a shed that caught on fire and was never demolished.

The curb appeal of your neighbors house is just as important as the curb appeal of your house when you are trying to entice a buyer, especially if the market is hot and they have many homes to choose from.

Another essential tool for research, most importantly if you are going to concentrate of residential tax lien investing, is the deluge of real estate site available at a mouse click.

Now you can find out everything you would ever want to know about a neighborhood or even a whole city by just surfing the enormous number of real estate site that have comparables, resent sales number, noise and light level, and just general gossip. Never forget knowledge is power!

Reason #3 Information about Foreclosures and Failing Markets

Whether you deem it to be a blessing or a curse; we no longer have any privacy.

The internet has given us the ability to find mortgages that are in or close to default. It should be fairly obvious to you by this point in the book that if someone is not paying their mortgage, they are not paying their taxes.

This information is invaluable when you are making your desicion as to whether to buy tax liens for the interest or the property acquistion.

Banks and lending institution become heavy with foreclosed properties when the housing market crashes. They are not nearly as apt to pay off the back taxes on a property that is going to fill their books with more unwanted inventory. It is much easier for them to write it off the books as being seized for tax evasion.

As I mentioned above, so markets are MUCH more likely to redeem than others. Use the knowledge you accrue from your internet research on a given market to make an educated guess as to the outcome of your investment.

If you are only worried about getting an amazing interest rate, look towards investing in an area with a strong economy. You still maybe hit the jackpot, but it will be rare.

If you are looking to expand your real estate portfolio, look toward an area with a weaker economy. A lot of foreclosures and massive real estate sell-off are the indicators of choice. You will acquire your new property so cheap that you will be able to ask half the cost of your competition and still make a killing!

Reason #4 International availability

The internet has opened the doors to the international buyers market for goods and services around the world. Tax lien certificates are a perfect example of this 21st century investing arena.

I do not think you will see too many people flying in from Australia to stand on a county court room steps to bid for tax liens or deeds. While the hope of getting a home in America for pennies on the dollar is a huge draw to any savvy investor, now it can be done with your mouse, not a plane ticket.

Americans will always have the advantage of being able to easily travel throughout the country going to their favorite tax lien auction sites, but the advent of internet tax lien auction site has enpowered the world.

The great part is the county is getting their tax money to provide us with roads, fire and police departments, etc. Whether they use domestic or foreign investor dollars, we all win!
About the Author
Melford Bibens is an ACE certified personal trainer. He lost 150lbs in 1996 through a self-engineered fitness and nutritional program and has kept the weight off for more than ten years.

He is the author of
, THE comprehensive guide to Tax Lien Investing in the 21st Century.
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