Tax liens, tax deeds and surplus tax deeds
There are many different ways to make a profit investing in the US property tax system, and four come to mind immediately.
- Sales tax link.
- Sales of tax deeds.
- Front execution tax deed sale.
- Excesses from a tax deed sale.
As a potential investor, or as a new investor who would like to know more about the industry, the question that remains to be answered is: “What is the best strategy?” Well, they are all good. However, there are advantages and limitations to each.
Taxes on dirty links.
Tax lien sales are perfect for the institutional and paid investor, as large sums of money need to be invested to get a good return. $ 10,000 + will pay you $ 1800 + in the states with the highest interest rates. You may be lucky and even get the deed, however the limitations are that you rarely get the deed as 97% is sold at a tax deed sale. And you may have to wait up to two years to get paid! Also, you cannot approach the owner in any way. This means that you cannot work head-on, as the law prohibits you from approaching the landlord.
Sale of tax deed.
A simple public offering auction. If you’ve done your research and due diligence, and are the highest bidder, you own the deed! Tax deeds are often collected for taxes owed and for less than $ 1000. Simple, straightforward, and easy.
Front running.
The frontal execution is also known as “grabbing the writing”. There are two ways to take advantage of this strategy. Work through numerous tax deed sales ahead of time looking to get in touch with current deed owners. Send a large number of letters asking the owners to give up their claim to the deed before the day of the auction. Perhaps one in 100 will respond. Once you have the deed, you will be the new owner. You don’t have to bid on it and you have it for taxes and fees owed. Or you can let it go to auction and receive 100% of the overbidden money in 30 to 60 days.
Excesses.
Surpluses are what happens after the sale of the tax deed. Surpluses are also known as surplus funds. Working on this strategy involves skipping tracking skills to find former owners. These leads are usually cold and dead leads, with about one in 200 responding. If you are lucky enough to find the owner and the power of attorney is granted, you can get up to 50% of the refund. This is lucrative when it occurs, but it can cost you to skip tracking and attorney’s fees.
Of the four strategies, only two give you the opportunity to own the writing; frontal execution, and the deed sales tax itself. Now, let’s recap and take another look.
Investing in tax bonds takes too long to generate returns and offers too little return on investment; Unless you are investing large sums of money. Surpluses can also take too long, and it can be very frustrating and time-consuming to see a return of only 50% of the surplus funds that have been overbid; after tracking and attorney costs are incurred.
Early execution will give you the deed of taxes and fees due, at a very low cost and in a short period of time. The sale of the tax deed will give you the deed for the highest bid, often only for the taxes and fees owed. If your goal is to own the deed, the best strategies to focus on are early foreclosure and buying in a tax deed sale. Why?
Owning the writing is the goal!
If you own the deed, you have a guarantee and a potential sale with a higher profit at a later date. Once the economy recovers, your newly acquired real estate assets will also increase in value. The strategies that give you ownership of the deed are the best, because “Owning the deed is the goal!”
About The Author
