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How I Made 12% Investing in Tax Liens

by Fred Fuld III

Have you heard about tax liens, especially how you can sometimes get high interest rates or even a house from your investment? Let me tell you how tax lien investments work.

I have gone through the process of looking looking for tax liens, buying, and getting a return.

What Are Tax Liens?

A tax lien is a legal claim placed on a property by the government (usually a county, sometimes cities) when a property owner fails to pay their property taxes. It is essentially a debt owed to the government for the unpaid taxes. The tax lien gives the government the right to collect the owed taxes by selling the property at a tax lien auction.

Tax lien investments, also known as tax lien certificates or tax lien sales, are investment opportunities where individuals or entities can purchase the right to collect the unpaid taxes from the delinquent property owner. When a property owner fails to pay their property taxes, the local government may decide to hold a tax lien auction to sell the tax liens to interested investors.

Here’s how tax lien investments typically work:

Tax Lien Auction: The local government organizes a tax lien auction, where investors bid on the right to purchase tax liens for specific delinquent properties.
Interest and Redemption Period: When an investor purchases a tax lien, they are essentially lending money to the property owner to pay off their taxes. In return, the investor receives a certificate indicating the amount of the lien and the interest rate that will be applied if the property owner redeems the lien.
Redemption: The property owner has a designated period (redemption period) to pay back the delinquent taxes, plus interest and any additional fees or penalties, to the tax lien holder (investor). If the property owner redeems the lien within this period, the investor receives their initial investment plus the accrued interest.
Property Acquisition: If the property owner fails to redeem the tax lien within the redemption period, the investor may be able to foreclose on the property and become the new owner. However, this process can be complicated and varies depending on local laws and regulations.

Tax lien investments can offer potential benefits, such as higher interest rates compared to traditional investments, and the possibility of acquiring properties at a discount through foreclosure. However, there are also risks involved, such as the property owner’s inability to redeem the tax lien, legal complexities in the foreclosure process, and the potential for properties to have other liens or issues that make them undesirable investments.

When you get the tax lien certificate, don’t expect anything fancy, like a certificate with scrollwork borders and a vintage font.

The following is an example of what I received from Maricopa County in Arizona. (Private information has been greyed out.) It almost looks like it was printed with a dot matrix printer.

Investors can buy the tax lien certificates through county auctions and can earn outrageously high interest rates of potentially 16% to 24% on their tax liens. Plus, bidding can be done all online.

The property owners are required to pay the back taxes plus the interest otherwise they can lose their property to the tax lien owner.

What States Offer Tax Liens?

The states that offer tax liens are as follows:

Alabama
Arizona
Arkansas
Colorado
Florida
Illinois
Indiana
Iowa
Kentucky
Maryland
Mississippi
Missouri
Montana
Nebraska
New Jersey
New York
North Dakota
Ohio
Oklahoma
Oregon
South Carolina
South Dakota
Vermont
West Virginia
Wyoming.
District of Columbia

You don’t have to live in a tax lien state in order to buy a tax lien in that particular state, plus you don’t even have to be a United States citizen or resident.

My Tax Lien Experience

The fist thing I did, after discovering that Maricopa County in Arizona was having an auction, was that I began looking though the Tax Lien section of the Maricopa County Treasurer’s Office website.

I then accessed the list of all the tax liens of properties being auctioned off, and started going through it. After being overwhelmed with numerous parcels, I decided to narrow my search, and chose Scottsdale, figuring that I couldn’t go wrong in a high income section of the county.

So I went through every property in Scottsdale, including houses, condos, lots, and raw land. It took a few hours but I did my searching while watching TV.

I looked up literally every one of the properties on Google Maps. Some of the lots turned out to be strange shapes, such as three feet wide by a 50 feet long. Some of the houses had liens that were way above my budget.

Then I came across a great one, a lot in an expensive neighborhood surrounded by million dollar homes, and the tax lien fit my budget of a maximum of ten thousand dollars. Since it was in a nice development, I assumed that it couldn’t be located on top of a toxic waste dump.

On Google Maps in Satellite View, I noticed that the ground had been graded and an indentation for a swimming pool was created, but no structure or even a foundation was on the property.

But then I discovered something else. I found a more up-to-date map on the Maricopa web site (which was hard to find and navigate to at the time) which also had a satellite view. When I checked on that map, it showed that the lot actually had a house on it! Apparently, the Google Maps picture was a bit out of date.

Considering that was a nice bonus, I registered to bid right away and funded my account.

Once all that was completed, I could bid. Now the way the bidding works is what I call reverse-intuitive.

Here is how the bidding process works. You bid on what the lowest interest rate is that you are willing to accept on your tax lien. The bidder who bids the lowest interest rate wins. At the time (this was several years ago), the bidding for this particular county could range from 18% to 4% in one percent intervals. The bidding range has since changed; it’s now 16% down to 0%, the last time I checked.

It was time for me to bid and with a couple weeks to go, I placed a bid of 6%, figuring that would be a nice return if I won.

Then two days before the auction close, I thought that I should lower the bid to 5% as it would give me a better chance of winning, plus 5% was and still is still a great return.

One day before the close of the auction, I changed my mind one more time, since I wanted that property badly.

So I finally changed it to 4%, the lowest bid level available at the time. At that time, I really didn’t care how much or how little the interest rate was, I just wanted to get the tax lien and hope that it never got paid off, so I could take over ownership of the house.

The next day, the auction closed. According to the web site, there were two bidders at 4%, with me being one of them. When there is a tie, a drawing takes place. I’m not sure how the drawing takes place, and didn’t really care at the time, but I won!

It was my lucky day. A few days later, I received the tax lien certificate in the mail. It looked nothing like any certificate I had ever seen. (See above.)

So you’re probably wondering if I got a million dollar mansion for a few thousand dollars.

As it turned out, the lien was paid off. I ended up owning the lien for slightly over a month, but earning three months worth of interest, giving me an effective yield of almost 12%. I’m not going to complain about getting three months of interest. I think it had something to do with the tax lien holding period overlapping three months.

The tax lien investment was practically riskless. It was backed by the value of the property, which was substantial. Not to bad a return for such a short term holding in a very low interest rate environment.

Where to Find More Info about Tax Liens

There are plenty of these tax lien auctions available. There are also plenty of books available about tax liens.

If you are interested in learning more about tax liens, check out some of these books:

Your Great Book Of Tax Liens And Deeds Investing

Understanding Tax Lien and Tax Deed Investing: No Fluff

The Complete Guide to Investing in Real Estate Tax Liens & Deeds: How to Earn High Rates of Return

Zero Risk Real Estate: Creating Wealth Through Tax Liens and Tax Deeds

Profit by Investing in Real Estate Tax Liens: Earn Safe, Secured, and Fixed Returns Every Time

Tax Lien$ for investing in New Jersey tax liens

The 16 % Solution, Revised Edition: How to Get High Interest Rates in a Low-Interest World with Tax Lien Certificates

Where are the Upcoming Tax Liens?

If you are looking for the web sites of the counties, parishes, and cities holding tax lien sales, here is a random sample of some of them with links:

Maricopa County, Arizona
https://treasurer.maricopa.gov/Pages/LoadPage?page=TaxSaleDetails

Yuma County, Arizona
http://www.yumacountyaz.gov/government/treasurer/tax-lien-information

Broward County, Florida
https://lienhub.com/county/broward/certsale/main

Sarasota County, Florida
https://www.sarasotataxcollector.com/services/tax-services/property-tax/tax-cert-sale

Sarasota, Florida
https://sarasotafl.realtaxlien.com

Charleston County, South Carolina
https://www.charlestoncounty.org/departments/delinquent-tax/tax-sale.php

Gwinnett County, Georgia
https://gwinnetttaxcommissioner.publicaccessnow.com/PropertyTax/DelinquentTax/TaxLiensTaxSales.aspx

Fulton County, Georgia
https://www.fultoncountytaxes.org/property-taxes/property-tax-sales.aspx

Baldwin County, Alabama
https://baldwincountyal.gov/government/revenue-commission/tax-lien-auction/lists/tax-lien-auction/191c681f-3e3e-4b00-9e1c-8a4b25f0b06a

Lake County, Indiana
https://lakecounty.in.gov/departments/treasurer-taxsaleinfo

Polk County, Iowa
https://www.polkcountyiowa.gov/treasurer/information-for-tax-sale-buyers/

Jefferson County, Kentucky
http://www.jeffersoncountyclerk.org/delinquenttaxes/

District of Columbia
https://otr.cfo.dc.gov/page/real-property-tax-sale

Baltimore, Maryland
https://www.bidbaltimore.com/main?unique_id=87A77E142A5211E8AB57310613945BAD&use_this=view_faqs

Nassau County, New York
https://www.nassaucountyny.gov/527/Annual-Tax-Lien-Sale

Happy Investing!!!

As an Amazon Associate, earnings may be generated from qualifying purchases of books from affiliate links at no additional cost to you.

The Best Way to Invest in Real Estate: Top Residential REITs

by Fred Fuld III

Let’s say that you want to invest in real estate. You don’t want to buy single family residences, because prices are too high and you don’t want to deal with leaky toilets and other management issues. Even if you have a property manager, you still have to deal with rental problems indirectly.

You might want to consider Real Estate Investment Trusts, most commonly referred to as REITs (pronounced “reets”). However, there are many different kinds of REITS, such as hotel REITs and industrial REITs. REITs pass through most of the rental income to investors, avoiding taxation at the corporate level.

Many investors are staying away from office building REITs, since so many people are working from home now and companies don’t need as much office space.

Other REITs that some investors are avoiding are retail REITs, as many retail shops have closed up and more and more people are buying online instead of through brick and mortar locations.

So investors have been looking at residential REITs which own apartment buildings. If people can’t afford to buy a home, they have to live somewhere, and apartments are usually the best option.

The largest REIT by market capitalization is Equity Residential (EQR) with a market cap of $29.568 billion. The company has a price to earnings ratio of 45 and pays a yield of 2.27%.

Running a very, very close second is AvalonBay Communities (AVB) at a market cap of $29.537 billion. It has a P/E ratio of 37 and has a dividend rate of 2.96%.

Invitation Homes (INVH) is in the business of leasing single-family homes. It sports a market cap of $21.2 billion and a P/E ratio of 105. It pay a yield of 1.7%.

Essex Property Trust (ESS) has a $19.5 billion market cap. It trades at 43 times earnings and the yield is 2.69%.

You might want to check and see if your portfolio has a home for a residential REIT.

Disclosure: Author didn’t own any of the above at the time the article was written.

Choose a Property That Can Be Recession-Proofed

Guest Article By Terry Painter, author of The Encyclopedia of Commercial Real Estate Advice

Sorry to start with a disclaimer, but with the exception of buying a commercial property occupied by a credit tenant like Walmart or the federal government that has an insanely high credit rating and 20 years or more remaining on the lease, nothing is truly recession-proof. The Gap, which had a fair credit rating of BB+ in March of 2019, was downgraded toward junk territory with a BB– a year later as a result of stiff competition from online sales and the start of the coronavirus recession. Then they stopped paying rent in April of 2020 after furloughing 80,000 employees and their credit rating tumbled further. The same month, Staples, Mattress Firm, and Subway stopped paying rent. These were all considered good tenants.

Does this mean that commercial property is just too risky to invest in? No. What it means is that just like in all recessions, the coronavirus recession—which was the worst economic tsunami to hit global financial markets since the Great Depression—nearly wiped out hospitality and wounded office and retail properties. Apartments, flex-industrial, self-storage, and mobile home parks seem to always make it through with much less pain.

Many of my clients are just sitting on the edge of their seats waiting for the next recession to hit. They have cash ready to grab good properties at great prices. For their existing properties, they put cash aside to protect them for the next recession, along with other recession-proofing strategies. They did this in the same way someone buying property in a storm surge area in Florida prepares for the inevitability of a hurricane. In a moment I share with you the 10 best recession-proofing strategies.

In most markets, a recession causes commercial real estate values to go down. This is because there is lower demand, and financing becomes more stringent, resulting in fewer buyers being able to qualify. Even though interest rates are usually low during recessions, lenders lend less by lowering their LTVs, raising vacancy, and raising their underwriting interest rate. Appraisers get pressured by lenders to lower valuations by having appraisals reflect lower occupancy, higher credit loss, and rent concessions.

According to Wikipedia, during the 60-year period between 1960 and 2020 there were 10 recessions in the United States, or an average of one every 6 years. If you are buying a commercial property and are planning on a long-term hold it would be smart to pick a strategy that will recession-proof you and your property. What you really want to know is this: If your occupancy takes a dive, how low can it go and still allow you to pay all expenses and your mortgage payment? Can you hang in there until things get better? What resources will you have to enable you to survive?

Which commercial property investors do the best during a recession? During the Great Recession that started in December 2007, my clients who had bought commercial properties with a long-term hold strategy weathered the storm better than those who planned on a short-term hold. The latter group intended to make a bundle in the future and pulled cash out to buy more properties. Although property values went down and occupancies dropped for properties held by many of the long-term hold borrowers, most made it through until occupancy and property values went up again. How did they pull this off? Most had chosen a more recession-friendly property and had enough cash or other sources of income to ride it out. In contrast, some short-term investors who had bought properties to rehab and flip got hurt because once they had completed the renovations the lease-up period was too long because the recession had already started. They just did not have enough capital left to make the mortgage payments, and many in this group lost their properties.

The 10 Best Recession-Proofing Strategies

Have working capital and other sources of income. Yes, cash is king! There is absolutely nothing that can make you and your commercial property more recession-proof than a nice chunk of cash. Having additional sources of income is a lifesaver too. Working capital is a rainy day fund used to pay unplanned-for repairs, or in the event of a recession to help with expenses and even mortgage payments. Do a quick pro forma on your property to determine what the expenses and mortgage payment will average each month. Then for a multi-tenant property bring occupancy down to 65% and calculate the monthly shortage you have after paying all expenses and the mortgage. Your working capital fund should be 12 to 18 months of this shortage.
Find a property with a break-even ratio that is 75% or lower. The break-even ratio tells you the minimum occupancy you need to pay all of your expenses and the mortgage on the property. Keeping this at 75% or lower is the next best recession safety strategy after having a stash of cash.
Don’t overleverage. Plan to reduce your personal debts and make sure that all your investment properties are purchased with at least 25% down. It’s a lack of positive cash flow that ruins commercial property investors during a recession. One of my clients owned a beautiful historic eight-unit apartment building in San Francisco that was thriving through the Great Recession. But it was the four distressed apartment buildings in Sacramento purchased with 15% down seller financing that took him down. He lost the San Francisco property because he drained it of cash to cover the shortages on the Sacramento properties, which he ended up losing, too.
Refinance with lower payments. Having lower payments on all the properties you own, including your home, will give you extra positive cash flow during a recession that can be used on investment properties that are not able to make it on their own.
Buy a property at below its value. There is nothing better that you can do than to buy a property for an even lower price than what it is worth. Let’s say that you brilliantly take $125,000 off a $1.5 million purchase price. Well, first of all, think about how long it would take for you to raise rents and lower expenses to earn an additional $125,000 from the property. Most importantly, this windfall will enable you to take out a smaller loan, thus lowering your monthly payments.
Keep your rents below market. I know, this sounds like leaving a lot of money on the table. But think about it. During a recession, rents get lowered and some tenants move to less expensive properties. If you already have lower-than-market rents, your tenants won’t be leaving and you will be attracting renters from more expensive properties. My client who owns a shopping center in Louisville, Kentucky, keeps his rents about 15% under market. I have scolded him for this. But his intention is to keep his property full during both good and bad times and he has. I have a client in Eugene, Oregon, who owns two apartment complexes, a 36 and a 61 unit. He made it through the Great Recession unharmed and is collecting 96% of his rents during the coronavirus recession. He says this is because his rents are lower than his competitors’ in his submarket. He always stays full for the same reason. And during bad economic times his tenants don’t want to risk losing their homes.
Choose a recession-friendly property type. Multifamily, medical office, self-storage, and flex industrial properties, as well as mobile home parks and senior housing, have a much better chance of making it through a recession unscathed. In 2008, multifamily occupancy grew as more people lost their homes and moved into apartments. Many of the same people rented self-storage units to hold the stuff that did not fit in the apartment. Mobile home park occupancy stayed strong during the Great Recession. Flex industrial complexes weathered the recession too, with small spaces having reasonable rents occupied by a large variety of businesses.
Don’t buy at the top of the market. This is hard to do if you are buying during a seller’s market. Little adds value to a property like not overpaying for it. In an up market you will have to work harder to find decent deals. If there are no good deals, just wait until the market comes down.
Choose a multi-tenant property with many smaller units. If you buy a four-unit office or retail building and two tenants fail during a recession, you could be left with 50% occupancy and be underwater. Also, stay away from retail and office properties where one tenant occupies 20% or more of the total space. The exception to this rule is anchored retail.
Find a property that has many value-add opportunities. Buy a property where you can do two or more of these lower-cost value adds: make cosmetic changes and raise rents, increase occupancy, lower general expenses, lower taxes and insurance, optimize lease potential, and attract higher paying tenants. Put together a buyer’s pro forma that shows the financial gains from your value adds and that you will obtain a lower break-even ratio in the near future. Boy, does this make your property recession-proof!

Time and Money Saving Tip

One of the best ways to make a killing during the recession and recovery phases of the real estate market cycle is to have the cash ready to buy a distressed seller out fast. When you submit your letter of intent to the seller or listing agent, include a letter of pre-approval from a bridge lender that states they can close in two weeks. If you can pay cash, mention that you will provide verification of funds upon request. Bridge loans are expensive but well worth it if you can buy the property for the right price. Buying well below market means you will be recession-proofing the property right out of the gate.

Terry Painter is the author of The Encyclopedia of Commercial Real Estate Advice. He is the founder of Apartment Loan Store and Business Loan Store, two mortgage banking firms specializing in commercial lending in all 50 states since 1997. He has been a top producer for Lasalle Bank and Lehman Brothers and is known for his exceptional investment consultations and stratagems. For 18 years Terry has spoken nationally to commercial real estate investor groups and real estate professionals about commercial real estate investing and lending. For over 20 years, Terry has built strong correspondent relationships representing Fannie Mae, Freddie Mac, FHA/HUD, Life Companies, Wall Street conduits, Hedge Funds, Regional, and National Banks. He is a member of the Mortgage Bankers Association and the Oregon Bankers Association.

This page contains Amazon Associate links.

How to Invest in Tax Liens

by Fred Fuld III

You may have heard about or read about tax liens in the past, especially how you can sometimes get high interest rates or even a house out of your investment. But do you really know how a tax lien works?

I have actually gone through the process of looking at tax liens for sale, researching them, buying them, and getting a return on my money.

What Are Tax Liens?

Here are some basics. Tax liens are county government liens against real estate where the property tax is past due. When the property owner fails to pay the taxes that are due, a tax lien certificate is issued.

When you get the tax lien certificate, don’t expect anything fancy, like scrollwork borders and a vintage font.

The following is an example of what I received from Maricopa County in Arizona. (Private information has been greyed out.) It almost looks like it was printed with a dot matrix printer.

Investors can buy the tax lien certificates through county auctions and can earn outrageously high interest rates of potentially 16%, 18%, 24%, or possibly 36% on their tax liens. Bidding can be done all online.

The property owners are required to pay the back taxes plus the interest or they can lose their property to the tax lien owner.

What States Offer Tax Liens?

The states that offer tax liens are as follows:

Alabama
Arizona
Arkansas
Colorado
Florida
Illinois
Indiana
Iowa
Kentucky
Maryland
Mississippi
Missouri
Montana
Nebraska
New Jersey
New York
North Dakota
Ohio
Oklahoma
Oregon
South Carolina
South Dakota
Vermont
West Virginia
Wyoming.
District of Columbia

Sorry, Californians. However, the good news is, you don’t have to live in a tax lien state in order to buy a tax lien in that particular state. You don’t even have to be a United States citizen or resident.

My Tax Lien Experience

So what was my story? I went to the county website of a couple of counties that had tax lien auctions coming up and start bidding.

It was a little more difficult and time-consuming than that, but it worked. The fist thing I did, after discovering that Maricopa County in Arizona was having an auction, was that I began looking though the Tax Lien section of the Maricopa County Treasurer’s Office website.

I then accessed the list of all the tax liens of properties being auctioned off, and started going through it. After being overwhelmed with numerous parcels, I decided to narrow it down, and chose the Scottsdale area. I figured that I couldn’t go wrong in a high income section of the city.

So I went through every property in Scottsdale, houses, condos, lots, and raw land. It took a few hours but I did my searching while sitting in front of the TV.

I looked up literally every one of the properties on Google Maps. Some of the lots turned out to be strange shapes, like five feet wide by a hundred feet long. Some of the houses had liens that were way above my budget.

Then I came across a good one. It was a lot in an expensive neighborhood surrounded by million dollar homes, and the tax lien fit my budget of ten thousand dollars maximum. Since it was in a nice development, I figured that it couldn’t be located on top of a toxic waste dump.

On Google Maps in Satellite View, I noticed that the ground had been graded and a space for a swimming pool had been dug, but no structure or even a foundation on the property.

But then I discovered something else. I found a map on the Maricopa web site (hard to find and navigate to at the time) which also had a satellite view. When I checked on that map, it showed that the lot had a house on it! Apparently, the Google Maps picture was a bit out of date.

Well, that was a nice bonus. I registered to bid right away and funded my account.

Once all that was completed, I could bid. Now the way the bidding works may seem strange, but when you think about it, it makes sense.

Here is the bidding process. You bid on what the lowest interest rate is that you are willing to accept on your tax lien. The bidder who bids the lowest interest rate wins. At the time (this was several years ago), the bidding could range from 18% to 4% in one percent intervals, for this particular county. The bidding range has since changed; it’s now 16% down to 0%, the last time I checked.

It was time for me to bid, with a couple weeks to go. I placed a bid of 6%, figuring that would be a nice return if I won.

Then two days before the auction close, I thought I better lower the bid to 5% as it would give me a better chance of winning, plus 5% is still a great return.

One day before the close of the auction, I changed my mind one more time. I wanted that property and I wanted it badly.

So I changed it to 4%, the lowest bid level available at the time. I really didn’t care by then how much or how little the interest rate was, I just wanted to get the tax lien and hope that it never got paid off, so I could take over ownership of the house.

It was my lucky day. A few days later, I received the tax lien certificate in the mail. It looked nothing like any certificate I had ever seen. (See above.)

Now you’re probably wondering. Did I get a million dollar mansion for a few thousand dollars?

As it turned out, I ended up owning the lien for a little over a month, but earning three months worth of interest. I’m not going to complain. I think it had something to do with the tax lien holding period overlapping three months.

The tax lien investment was practically risk-less. It was backed by the value of the property, which was substantial. Not to bad a return for such a short term holding in a very low interest rate environment.

Where to Find More Info about Tax Liens

There are plenty of these tax lien auctions available. There are also plenty of books available about tax liens.

If you are interested in learning more about tax liens, check out some of these books:

Zero Risk Real Estate: Creating Wealth Through Tax Liens and Tax Deeds

Tax Lien$

Profit by Investing in Real Estate Tax Liens: Earn Safe, Secured, and Fixed Returns Every Time

The Complete Guide to Investing in Real Estate Tax Liens & Deeds: How to Earn High Rates of Return

The 16 % Solution, Revised Edition: How to Get High Interest Rates in a Low-Interest World with Tax Lien Certificates

Where are the Upcoming Tax Liens?

If you are looking for the web sites of the counties, parishes, and cities holding tax lien sales, here is a random sample of some of them with links:

Maricopa County, Arizona
https://treasurer.maricopa.gov/Pages/LoadPage?page=TaxSaleDetails

Yuma County, Arizona
http://www.yumacountyaz.gov/government/treasurer/tax-lien-information

Broward County, Florida
http://www.broward.org/RecordsTaxesTreasury/FrequentlyAskedQuestions/Pages/TaxCertificateSale.aspx

Sarasota County, Florida
https://www.sarasotataxcollector.com/services/tax-services/property-tax/tax-cert-sale

Sarasota, Florida
https://sarasotafl.realtaxlien.com

Charleston County, South Carolina
https://www.charlestoncounty.org/departments/delinquent-tax/tax-sale.php

Gwinnett County, Georgia
https://gwinnetttaxcommissioner.publicaccessnow.com/PropertyTax/DelinquentTax/TaxLiensTaxSales.aspx

Fulton County, Georgia
https://www.fultoncountytaxes.org/property-taxes/property-tax-sales.aspx

Baldwin County, Alabama
http://baldwincountyal.gov/Government/revenue/divisions/collections/tax-sale

Lake County, Indiana
https://www.lakecountyin.org/portal/media-type/html/group/treasurer/page/default.psml/js_pane/P-13b9cba7958-10765;jsessionid=A16CFFBF59CB0D86B6F925D0A7CECBD4

Polk County, Iowa
https://www.polkcountyiowa.gov/treasurer/tax-sale-buyer-info/

Jefferson County, Kentucky
http://www.jeffersoncountyclerk.org/delinquenttaxes/

District of Columbia
https://otr.cfo.dc.gov/page/real-property-tax-sale

Baltimore, Maryland
https://www.bidbaltimore.com/main?unique_id=87A77E142A5211E8AB57310613945BAD&use_this=view_faqs

Nassau County, New York
https://www.nassaucountyny.gov/527/Annual-Tax-Lien-Sale

Happy Investing!!!

As an Amazon Associate, earnings may be generated from qualifying purchases of books from affiliate links.

Are Tiny Houses the Latest Hot Real Estate Investment?

by Fred Fuld III

With the high costs of buying or renting a house spreading across the nation, more and more homeowners are looking at building a tiny house in their backyard, and renters are looking to rent them.

A small house is generally considered to be between 400 and 1,000 square feet, and tiny houses are less than 400 square feet. The smallest tiny house is considered to be one that is only 80 square feet. I wonder if they hold a lot of parties in that house?

Last year, California passed new laws allowing homeowners to construct tiny houses due to the fact that rental costs have gone through the roof (no pun intended) in the state partially due to the shortage of available rental units. Some other states are following suit.

These homes can either be built by contractors or can be ordered online as a kit the is relatively easy to assemble. So what kind of a house can you get, and how much does it cost?

One of the smallest is manufactured by Luoman and is only 113 square feet. TheAllwood Escape Cabin Kit sells for only $5,350, giving you the bare bones basic.

If you are looking for a bit more space, there is the starENERGY Tiny Home Kit which sells for $21,900 plus shipping. This home falls into the small house category at 648 square feet, and may accommodate a full kitchen and pantry, bathroom, one bed room with walk in closet, laundry room and living room.

You might want to consider a 320 square foot Prefabricated Container Hotel Room Furnished Economic Modular House at $54,000.

The Allwood Avalon Cabin Kit, manufactured by Lasita, gives you 540 square feet for only $33,990 with free shipping. It includes triple glass windows and doors.

Generally, none of these come with foundation materials or shingles for the roof. Construction usually takes two people and can take anywhere from two days to a week to complete.

Maybe you can have your own real estate investment in your own back yard.

Affiliate links

Top Investor and Trader Books for the Holidays

Are you looking for some reading during the holidays? Are you looking for some books that you can spend your Amazon (AMZN) gift cards on? Here is a selection.

Books on Stock Trading & Investing

These books are all about either day trading, swing trading, or investing in stocks and all have an average of four or more stars on Amazon.

Beat The Crowd: How You Can Out-Invest The Herd By Thinking Differently
by Ken Fisher

Investment Guide
by Gary Charles Palmer

Unleash Your Investments
by John Hagensen

Stock Traders Almanac
by Jeffrey A. Hirsch
(every stock trader should have this book)

Day Trading Journal
Wall Street News Network

Stock Trading Journal
Wall Street News Network

How to Day Trade for a Living: A Beginners Guide to Trading Tools and Tactics, Money Management
by Andrew Aziz

How to Make Money in Stocks: A Winning System in Good Times and Bad
by William J. O’Neil

Stock Trading: THE BIBLE This Book Includes: The beginners Guide + The Crash Course + The Best Techniques + Tips and Tricks + The Advanced Guide Immediate Cash With Stock Trading
by Samuel Rees

A Beginner’s Guide To Day Trading Online 2nd Edition
by Toni Turner

The 1 Hour Trade: Make Money With One Simple Strategy, One Hour Daily
by Brian P Anderson

Investment Trivia
by Fred Fuld III

Real Estate Investing

You have probably seen those ads on TV about flipping houses and investing in real estate. Before dipping your foot in the water, maybe you should read up on buying and renting homes. The following are some recent top selling books on real estate investing, shown by category. Read, learn, and invest.

Rental Property Investing
by Charles Pennyfeather

Real Estate Investment
by Lee Strong

Preparing for a Property Upturn: Trends and Pitfalls in Real Estate Investments
by Ku Swee Yong

Keep Claiming It!: A Guide To Property Depreciation
by Tyron Hyde

Real Estate Investment 101: Learn The Passive Income That Everyone Is Talking About
by Meir Zaslavskiy

Real Estate Investing UNCENSORED: Real Answers From The Flipping Coach
by Delinda Harrelson

Success Secrets of Real Estate Investors
by Peter Crisp

How To Jump Into Property Investing: Without Being Eaten By Sharks
by Mike Harvey

Real Estate Trivia
by Fred Fuld III

Business Books

Strategize to Win
By Carla A. Harris
A Wall Street veteran offers proven strategies for success.

The Pocket Small Business Owner’s Guide to Building Your Business
By Kevin Devine
Each step of the entrepreneur’s journey.

Boost Your Career
By Sander Flaum and Mechele Flaum
How to climb the corporate ladder.

The Serving Mindset
By Farnoosh Brock
Practical guide to making sales pitches.

The 7 Principles of Public Speaking
By Richard Zeoli
Improve your communication skills.

10-Minute Focus
By Daniel Walter
Guide to maintaining your focus and maximizing productivity.

Chasing the High
By Michael G. Dash
How to manage the highs and lows of business.

Getting to Yes
By Roger Fisher, William Ury, and Bruce Patton
Master the art of win-win agreements.

Your Living Trust & Estate Plan
By Harvey J. Platt
Tips on creating a living will and estate plan.

Disclosure: A couple of the books above were written by me. Affiliate links.

How About Meghan Markle’s House as an Investment

If you are looking for an unusual investment, here is an idea, a house owned by a princess.

More info courtesy of TopRealEstateDeals.com

When Megan Markle, now Duchess of Sussex and a princess of the United Kingdom, first got her acting part in Suits in 2011, she was married to Trevor Engelson and they rented this charming Colonial-style home in L.A.’s Hancock Park neighborhood – a stone’s throw from downtown Hollywood. Though it was necessary for her to live nine months of the year in Toronto while filming, this is where she would return between filming and where she called home until her divorce in 2013. It has recently been put on the market staged in pure Megan style, almost as if she had just stepped out for a quick trip to the grocery. It is now for sale priced at $1.8 million.

Filled with sunlight bouncing off of white walls and bright minimalist decor, the 1924 Colonial measures 2,262-square-feet with four bedrooms, three baths, family room, living room with fireplace and dining area, all on an open plan. The eat-in kitchen is also filled with natural light and white cabinets are covered with marble countertops. The dining room opens onto a patio for entertaining and there is a two-car garage with additional parking.

Although romantics love to believe that Markle’s marriage to Prince Harry was a real life Cinderella story, she had been starring in Suits for six years and was paid, at what Fortune estimates, $450,000 per show. In addition, her two clothing lines were popular, selling out quickly and her fashion-lifestyle blog was also pulling in about $80,000 annually. Not one to sit back and waste time, she had a number of small acting roles in between and made about $200,000 for each of her minor film roles. By the time Markle became engaged to Prince Harry, her estimated wealth was already hovering at $5 million.

Although Markle was divorced from Engelson in 2013 and married Prince Harry in 2018, with whom she now has a child, it is rumored that the Sussexes may be looking for a second home in California where Megan’s mother still lives. But would they be interested in this home? Not likely, as times and fortunes have changed and security needs have changed, but for Megan followers who themselves have big dreams, it is the perfect house. Now for sale at $1.8 million, the listing agent is Sheri Bienstock of The Bienstock Group, Los Angeles.

Photo credit: The Bienstock Group

My Tax Lien Investment Adventure

by Fred Fuld III

I used to go to those “get rich quick” seminars every year or so as I wanted to see what the latest money making schemes were being foisted upon the American public, and they would give me some ideas for articles. I have a friend who was big fan of these events and was able to drag me along every once in a while.

Usually these conferences would last for a few hours and have three different presenters, each one lasting about an hour long, and at least one real estate related. So for one of the ones I attended, the first was how to flip houses, the second was trading with stock options, and the third, make money with tax liens.

The tax liens that were referred to in this event are county government liens against real estate where the property tax is past due. When the property owner fails to pay the taxes that are due, a tax lien certificate is issued. Investors can buy the tax lien certificates through auctions and can earn outrageously high interest rates of potentially 16%, 18%, 24%, or possibly 36% on their tax liens. The property owners are required to pay the back taxes plus the interest or they can lose their property to the tax lien owner.

The states that offer tax liens are as follows:

Alabama
Arizona
Arkansas
Colorado
Florida
Illinois
Indiana
Iowa
Kentucky
Maryland
Mississippi
Missouri
Montana
Nebraska
New Jersey
New York
North Dakota
Ohio
Oklahoma
Oregon
South Carolina
South Dakota
Vermont
West Virginia
Wyoming.
District of Columbia

So what was my story? After going to one of these seminars and being offered a course for a couple thousand dollars on how to buy tax liens, I thought to myself, why should I pay for a course? I will just go to the county website of a couple of counties that had tax lien auctions coming up and start bidding.

I then accessed the list of all the tax liens of properties being auctioned off, and started going through it. After being overwhelmed with thousands of parcels, I decided to narrow it down, and chose the Scottsdale area. I figured that I couldn’t go wrong in a classy area.

So I went through every property in Scottsdale, houses, condos, lots, and raw land. It took a few hours but I did my searching while sitting in front of the TV with my laptop on a TV-dinner table, turning my wasted time into productive time.

Then I came across a good one. It was a lot in an expensive neighborhood surrounded by million dollar homes, and the tax lien fit my budget of several thousand dollars. Since it was in a nice development, I figured that it wasn’t located on top of a toxic waste dump.

On Google Maps in Satellite View, I noticed that the ground had been graded and a space for a swimming pool had been dug, but no structure or even a foundation on the property.

But then I discovered something else. I found a map on the Maricopa web site (hard to find and navigate to at the time) which also had a satellite view. When I check on that map, it showed that the lot had a house on it! Apparently, the Google Maps picture was a bit out of date.

Well, that was a nice bonus. I registered to bid right away and funded my account.

Once all that was completed, I could bid. Now the way the bidding works may seem strange, but when you think about it, it makes sense.

Here is the bidding process. You bid on what interest rate you are willing to accept on your tax lien. The bidder who bids the lowest interest rate wins. At the time (this was several years ago), the bidding could range from 18% to 4% in one percent intervals, for this particular county. The bidding range has since changed; it’s now 16% down to 0%.

It was time for me to bid, with a couple weeks to go. I placed a bid of 6%, figuring that would be a nice return if I won.

Then two days before the auction close, I thought I better lower the bid to 5% as it would give me a better chance of winning, plus 5% is still a great return.

One day before the close of the auction, I changed my mind one more time. I wanted that property and I wanted it bad (badly?).

The next day, the auction closed. According to the web site, there were two bidders at 4%, with me being one of them. What happens when there is a tie is a drawing takes place. I’m not sure how the drawing takes place but I won!

It was my lucky day. A few days later, I received the tax lien certificate in the mail. It looked nothing like any certificate I had ever seen. It appeared to have been printed with a dot matrix printer (are any of those still around?) and said something like “You are the owner of the following tax lien(s)”.

I still have a copy of it in a file in a box somewhere in my storage unit. If I ever find it, I will add the picture to this article.

Now you’re probably wondering. Did I get a million dollar mansion for a few thousand dollars?

There are plenty of these tax lien auctions available. As a matter of fact, there are 23 coming up in Florida in May. As a matter of fact, the City of Baltimore is holding a tax lien sale that has just started and ends in May.

If you are interested in learning more about tax liens, check out some of these books:

Zero Risk Real Estate: Creating Wealth Through Tax Liens and Tax Deeds

Tax Lien$

Profit by Investing in Real Estate Tax Liens: Earn Safe, Secured, and Fixed Returns Every Time

The Complete Guide to Investing in Real Estate Tax Liens & Deeds: How to Earn High Rates of Return

The 16 % Solution, Revised Edition: How to Get High Interest Rates in a Low-Interest World with Tax Lien Certificates

If you are looking for the web sites of the counties, parishes, and cities holding tax lien sales, here is a random sample of some of them with links:

Maricopa County, Arizona
https://treasurer.maricopa.gov/Pages/LoadPage?page=TaxSaleDetails

Yuma County, Arizona
http://www.yumacountyaz.gov/government/treasurer/tax-lien-information

Broward County, Florida
http://www.broward.org/RecordsTaxesTreasury/FrequentlyAskedQuestions/Pages/TaxCertificateSale.aspx

Sarasota County, Florida
https://www.sarasotataxcollector.com/services/tax-services/property-tax/tax-cert-sale

Sarasota RealTaxLien, Florida
https://sarasotafl.realtaxlien.com

Charleston County, South Carolina
https://www.charlestoncounty.org/departments/delinquent-tax/tax-sale.php

Gwinnett County, Georgia
https://gwinnetttaxcommissioner.publicaccessnow.com/PropertyTax/DelinquentTax/TaxLiensTaxSales.aspx

Fulton County, Georgia
https://www.fultoncountytaxes.org/property-taxes/property-tax-sales.aspx

Baldwin County, Alabama
http://baldwincountyal.gov/Government/revenue/divisions/collections/tax-sale

Lake County, Indiana
https://www.lakecountyin.org/portal/media-type/html/group/treasurer/page/default.psml/js_pane/P-13b9cba7958-10765;jsessionid=A16CFFBF59CB0D86B6F925D0A7CECBD4

Polk County, Iowa
https://www.polkcountyiowa.gov/treasurer/tax-sale-buyer-info/

Jefferson County, Kentucky
http://www.jeffersoncountyclerk.org/delinquenttaxes/