1. You can make a decent amount of money from tax liens if you are willing to do all the leg work to get it. Here are a few tips to get you started.
2. Make a list of all the courthouses in your area. Write down the address, phone number, website and contact information. The easiest way is to go the National Association of Courthouses or NAC website. Check out the county map for your county and click on it. This website lists all the counties of every state in the U.S. Once you have all that information either call or visit each courthouse and speak with the Treasurer. Ask them about the process to handle foreclosures as each county handles foreclosures differently and some sell tax certificates instead of tax liens. If the courthouse has all their tax lien information in their library ask what section it is in. Study each law book to be sure you get all the information you need including how all tax liens are processed in that county. You may even be able to save a lot of running around by checking if this information is available online. Another option is to consult an attorney in that county who specializes in tax liens and ask them if they will research this information for you for a small fee.
3. Next you want to preregister for the sale of the tax lien you are interested in. Most tax lien sales are once a year and you may have to attend the sale in person. Many counties are now having tax lien auctions online for example Arizona. Check out all the payment methods that are available for the auction. You can either bid down on the interest rate, bid up on the amount you have or there may be a round robin type of sale available. Be sure to find out what type of sale the county is holding for the tax lien before you preregister.
4. Be sure and do your homework. Thoroughly research all the documents for the particular property you are interested in and take a drive to check out the condition of the property Many times you can end up with some nice property if the property owner hasn't paid the property taxes
Take into consideration all the risks that may be involved on your investment. There are many risks that can make the property a worthless investment. For example, the home that is on the property may be run down or may have burned down, the house could pose environmental dangers or the house may have even been seized by the government for illegal drugs or firearms activity. There may even be a lien by the IRS on the house although tax liens by counties supersede IRS liens. The house may even be in foreclosure or bankruptcy in which you may have to fight banks for the property.
More like this: Why Do I Owe State Taxes, And How To Avoid Them?
Attend the auction and check out all the county documents for accuracy. Also check out the laws for tax lien redemption.
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Shawn Manaher is a former financial advisor, has founded 5 online businesses, and is a coach, speaker, podcast host, and author. He's been featured on Forbes, The Consults Corner on TAE Radio, The Writing Biz, What's Your Story, and more.