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Tax Lien Certificates
Old 03-08-2007, 09:02 PM   #1
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Tax Lien Certificates

Does anyone really make any money from tax lien certificates?
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Re: Tax Lien Certificates
Old 03-08-2007, 09:10 PM   #2
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Re: Tax Lien Certificates

I think we had this discussion some time last year. FWIW here's my take. I read a book or two about it and concluded it's not worth the effort. Here in CA we don't have TLCs so some go over to AZ to bid on them.

I think the main benefit would be the relatively high interest rate you could earn assuming you bid on the right TLC. The odds of actually getting a property from a delinquent tax payer is extremely low. Those late night TV ads try to pull people in with the idea they can end up with properties "free and clear" by investing in TLCs.

I chose not to go this route. I suppose if you live in a TLC state and are willing to dig in and develop the expertise you could earn a decent return on your cash. Just don't buy into the hype about attaining real estate bargains this way.
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Re: Tax Lien Certificates
Old 03-08-2007, 11:30 PM   #3
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Re: Tax Lien Certificates

I read Joel Moskowitz' book, which seems to be a down to earth book and has remained in print a long time. I determined that if I lives in a tax lien state, or traveled in a motorhome that I would like to try this out.

It really seems more like a fairly involved business than a passive investment.

I believe it is competitive. There are always a number of intelligent locals wherever you go who don't believe in stocks for the long term, are not lazy and are willing to do the legwork to succeed at things like tax liens. They are your main competition.

Still, it appears that reasonable returns are there if one could control his overhead tightly enough.

I keep tax liens on my back burner.

Ha
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Re: Tax Lien Certificates
Old 03-08-2007, 11:35 PM   #4
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Re: Tax Lien Certificates

Quote:
Originally Posted by retire@40
Does anyone really make any money from tax lien certificates?
Kiyosaki has claimed to have made gazillions from them.

That's enough to point me in any other direction...
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Re: Tax Lien Certificates
Old 03-09-2007, 07:46 AM   #5
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Re: Tax Lien Certificates

I looked at TLC years ago and couldn't find a single investor who acquired the property via TLCs. Interest accruing was great (~14% in early ninties). But my guess is the first mortgage holder is not going to let his lein go .... which is a good thing if all you want is your return $$.
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Re: Tax Lien Certificates
Old 03-09-2007, 10:29 AM   #6
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Re: Tax Lien Certificates

In illinois I believe it is a bidding process where you bid the lowest interest rate you are willing to receive..... from what I hear you don't get the juicy 18% yields, but more like 7% or so.

Like anything, if it seems too good to be true......

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Re: Tax Lien Certificates
Old 03-09-2007, 10:38 AM   #7
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Re: Tax Lien Certificates

I looked into sales in Maricopa County in Arizona, which listed all their available properties online... some went for 16% but most seemed to go for 5%-7%... if you Google them you can find their website, log in, and check it out.
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Re: Tax Lien Certificates
Old 03-09-2007, 12:26 PM   #8
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Re: Tax Lien Certificates

That's what I remember from last year's discussion....with somebody having a brother in law or such getting a property that needed new septic and roof before they could turn around and sell it....seemed like a lot of work for little return...
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Re: Tax Lien Certificates
Old 03-09-2007, 04:16 PM   #9
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Re: Tax Lien Certificates

www.taxsales.com
I have never bought any but sometimes its fun to look at the sales.
Many of the listings are just dirt.
Just like not putting a scalding cup of coffee between your legs. There is some dilagence

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Re: Tax Lien Certificates
Old 03-09-2007, 04:35 PM   #10
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Re: Tax Lien Certificates

The interest rate that these are generally sold at usually exceeds the best going rate for a longer term CD. So if you can get 5.5% for a 3 yr CD, generally you will see tax certificates going for maybe 6 1/2 to 7%. When yields for CD's were down around 2 1/2 to 3%, tax certificates were not much higher.

It is a lot of work for not a great yeild. I don't know the % of defaults, but I am sure it is quite low. I like many others looked into it and read several books, but felt I didn't have the time to do all the research, and the reward wasn't worth my time.
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Re: Tax Lien Certificates
Old 03-09-2007, 07:10 PM   #11
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Re: Tax Lien Certificates

i have researched this and decided that the amount of time involved is not worth the reward.
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