How to purchase tax lien certificates. Learning how to purchase tax lien certificates can take some
time to learn, but can be a very rewarding investment. The process varies from state to state, but the basics are the same.
The first step is learning where to look for tax lien certificates. There are two types of tax lien certificates available for investors to purchase. The first type is through a tax lien auction.
Tax lien auctions are usually held once a year in a particular county. The auctions are advertised in the local newspaper and on the county website if the county has a website. If you are unsure where to look for the list of upcoming tax certificates, contact the county tax collector or county treasurer and they should be able to tell you where you can find the list.
More and more counties are choosing to hold online tax auctions rather than physical auctions at the courthouse. This means that more investors have the opportunity to invest in tax certificates across the country without leaving home.
The downside to online tax lien auctions is more investors turn out for the auctions making them competitive. The interest rates are often bid down significantly.
The best deals can be found at live auctions where fewer investors are willing to travel and in counties that do not have a website. Most investors pass on counties that do not have a website, because there are plenty of other counties that have websites to make research easier. This means that you could potentially be the only investor at an auction if you travel to a physical auction.
Before bidding on an auction whether it be physical or virtual, always read the auction rules and requirements. In some cases you will need a form signed by the county before you can bid. This means you need to prepare well in advance.
Some auctions also require deposits for each lien you want to bid on before the auction begins. It is important to know the rules before starting. It is also a good idea to talk to the tax collector about the auction to be sure you know all the fees involved and the rules, even if it is printed online.
The other type of tax lien certificate available to purchase are the county held certificates. These are liens that did not receive any bids during the auction. They usually can be purchased for the cost of the lien and fees and you often will receive the maximum interest return.
The reason the certificates did not receive any bids could be for a number of reasons. The county may have held a physical auction and didn’t have a large turn out. Or the lien may be for vacant land which has a lower possibility of redemption than a home would have. What ever the case may be, you would still want to do your before buying the lien.
Learning how to purchase tax lien certificates can be fun and rewarding. There is no other investment like it that is virtually risk free. To learn more about how to purchase tax lien certificates visit http://BankREOTraining.com
