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| $$bilyal |
 Posted: Sun Mar 19, 2006 12:25 am Post subject: tax liens |
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Investing Sr. Associate
Joined: 18 Mar 2006
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| Was reading something about a guy making 16% profit on "tax liens". Are these strictly to do with real estate? |
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| Dave Rathbun |
| Posted: Sun Mar 19, 2006 5:13 am Post subject: |
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CFO
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| If it is what I think it is, you simply go in and pay the back-taxes on property that is delinquent. If / when the property owner pays the taxes + the interest, you get paid back the original investment plus the interest. However, if the property owner never pays the back taxes, then you have additional legal costs... but ultimately (and this may vary from state to state) after you have paid the taxes for some number of years (seven sticks in my mind) then you can legally take possession of the property and sell it to try to recover your investment. |
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| efflandt |
| Posted: Mon Mar 20, 2006 8:34 pm Post subject: |
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Investing Manager
Joined: 01 Oct 2005
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It varies by location. In my county in Illinois, if someone does not pay their property tax due that year, it goes to tax sale (auction for back taxes) in late Oct/early Nov. If the property owner pays the taxes within 2 years, you get the tax and interest penalty. After that time, if you complied with all state requirements to notify the owner, etc. you can get title to the property.
I got a notice of tax sale for my property when I bought a home and both the title company and my lender failed to pay property tax on part of my double lot. I got the money from the title company, but I had to pay the rest myself before the deadline, and then try to get work it out with my lender to get reimbursed from escrow.
I have not been to one of the tax sale auctions yet, but may check it out soon if I have some extra cash some fall.
Unfortunately delinquent tax property in Wisconsin goes to the county, and they sell it at fair market value. So you have to check out the details for the area you are interested in (typically the county website if there is one). |
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| Dave Rathbun |
| Posted: Thu Mar 23, 2006 6:38 am Post subject: |
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CFO
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| It's an interesting way to acquire property. The possible negative is that it's probably best for vacant land rather than housing of some sort. If an owner is not paying back taxes, and has no intention to do so, then they have no intention to keep up the property. There are things you can do to mess up vacant land too, but not nearly as much as messing up a house or business building. |
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