[amg2000]

I recently reviewed a new report called "Tax Lien Riches" at the following website... http://taxlieninvestingguide.com/ (yeah, you can see my ugly mug about 1/4 of the way down the page!)

Anyway, this is a quality ebook with solid advice on how to generate huge ROI by investing in tax lien certificates and deeds.

I noticed that several of you on this forum are interested in real estate, so just thought I'd share this with you.

Brian

[silversurfer]

yes, except that it's likely all false. I have found, through talking to people who tried it, that liens are bogus.

after reading about liens in the 1990s I attended one of my city's tax lien auctions with $5k to spend. There were maybe 50 people there and most of them wanted some choice properties. I wanted to look or see if I could pick something up where I could make 10% profit with the hope of a default.

After 20 minutes I figured it out, there were three people at the auction who represented banks and a major developer. Let me phrase this as clearly as possible- BANKS were there. These three people outbid everyone and won everything. There were some properties that had $50-60k in back taxes and judging by the neighborhood were likely not worth it or even abandoned property. The banks didn't touch those. No one touched those.

What I saw looked like:

Joe and Jane sixpack bid $7k for some property. The guys sat back and watched it go up little by little and they bid, you know, $12,250 or $17,500 and no one else touched it. Within a matter of minutes people were telling me which banks these people represented and what developer the other guy represented. They sort of talked like, "well when these guys stop showing up then we can make some money." I didn't waste more than an hour there- the bank reps weren't using their own money and they simply bought everything of value, leaving junk that no one else wanted.

So that's my personal experience with tax liens. I can't imagine a county or city where the banks don't know about this and don't get the pick of the litter. You're in competition with real professional companies here.

I've posted this story many many times and always asked the same question: Have you yourself successfully purchased a tax lien? Not one person has told me they ever won a tax lien and people have told the same basic story of my tax lien auction.

SS

[David Rocci]

I read a book called Profit by Investing in Real Estate Tax Liens by Larry Loftis. It is true that some institutional investors are getting involved in tax lien auctions but they tend to focus on bigger city counties. Every county has their own auctions so you could visit different counties to see what the attendance is like and which ones to avoid.

SS: what state did you attend the auction?

In my state, Illinois, it's a bid DOWN state. The interest rate penalty starts at 18% and the bidders actually bid DOWN the interest rate. The winning bidder may have bid down the interest rate to 12%, 11% or even as low as 8 or 9%. The difference is the real return on your investment is based on how quickly the default tax payer redeems.

Consider this, if you bid down the interest rate to 8% but the taxpayer redeems within 5 or 6 months, you've really earned a much higher rate of return.

Personally, I have never bought a tax lien and I have never been to an auction. The book has other tips for avoiding the institutional investor. The beauty about the institutional investor is that they have validated the security of this type of investment.

Good luck!

-dr

[shadfewl]

Originally Posted by David Rocci

I read a book called Profit by Investing in Real Estate Tax Liens by Larry Loftis. It is true that some institutional investors are getting involved in tax lien auctions but they tend to focus on bigger city counties. Every county has their own auctions so you could visit different counties to see what the attendance is like and which ones to avoid.

SS: what state did you attend the auction?

In my state, Illinois, it's a bid DOWN state. The interest rate penalty starts at 18% and the bidders actually bid DOWN the interest rate. The winning bidder may have bid down the interest rate to 12%, 11% or even as low as 8 or 9%. The difference is the real return on your investment is based on how quickly the default tax payer redeems.

Consider this, if you bid down the interest rate to 8% but the taxpayer redeems within 5 or 6 months, you've really earned a much higher rate of return.

Personally, I have never bought a tax lien and I have never been to an auction. The book has other tips for avoiding the institutional investor. The beauty about the institutional investor is that they have validated the security of this type of investment.

Good luck!

-dr

Don't forget that even if you bid down 0%, you can get the subsequent tax years without bidding because you are the lien holder. So you don't worry about institutional investors anymore since you have first position in subsequent liens (they are set around 12%).

Loftis' Profit by Investing in Tax Liens book and also the Complete Guide to Real Estate Tax Liens and Foreclosure Deeds: Learn in 7 Days by Don Sausa are probably the two best tax liens books out there.

[Young Spark]

Many people believe that purchasing a tax lien gives you the ownership of that property. FALSE! All states have pre-set limitations that give the owner of the property so many years (or in some cases, months) to pay you back. If they fail to, then you receive the ownership of the property free and clear.

Just to confirm, that is correct right?