Estate House QTA

With a little knowledge and some prior research it is quite possible to buy homes with tax liens for as little as 10-50 cents on the dollar.

In certain states, tax lien holders can force the lien property into foreclosure. These properties are then auctioned off at tax deed sales. Typically, a canny investor can acquire property at these sales at much lower prices than traditional real estate auctions where prices will usually make over 60 cents on the dollar.

These states are called Tax Deed States. In a deed state:

* The investor actually acquires title to the property

* No interest rate or redemption period is involved since the investor received the property itself.

So what type of properties end up at these sales? Surely they must be run down places in bad neighborhoods right?

Wrong. Certainly, out of the many lien-outstanding homes there will be some undesirable examples in rough parts of town but there will also be plenty of perfectly nice, habitable properties going for a song.

Do not assume that it is only poor homes where people allow their property taxes to lapse and get into a foreclosure situation. You would be amazed at some of the people and places who end up losing their homes in this way and there are many extremely valuable lots selling at tax deed sales in every state.

My best guess is that most of these people simply miss the payment deadline. I have known of famous and wealthy people that have been foreclosed on. Often these people have no experience in the financial world and employ a financial company to manage their affairs. Maybe the management company missed an invoice or never received it in the first place?

In the case of developers and real estate companies sometimes they will intentionally hold off on paying their property taxes so that they become the buyers responsibility on closing. They see it as a kind of short-term loan. This tactic can go badly wrong if an absent minded secretary misplaces an invoice!

Obviously, the nicer the property the higher the price it will make at auction, but even with a relatively small budget it is possible to buy real estate at tax deed sales.

* All properties (other than Native American Reservations) incur property taxes. These pay for local and municipal services like Police, Fire Protection, Libraries and Roads.

* Tax Liens can be found on a wide variety of properties. From small homes to luxury homes, condos to vacant lots. Commercial lots to warehouses and even entire shopping malls. At any given tax deed sale you will find real estate that once belonged to well known companies, celebrities and even federal organizations.

* Lien amounts range from $100 to over $1 million.