Investing

Instead of talking about well drilling, this time I want to address an investment topic called tax liens and tax deeds. I have been doing research on this subject since mid-summer and found it a good way to invest. Here is how it works. The beginning of the process involves a property owner not paying there taxes. When they don’t pay their property tax a tax lien goes up for sale, weather it is at an auction or not. Basically when you buy one of these tax liens you are paying the property tax off for the person, in return you receive your money back plus what ever the state mandate percentage is, particularly around seventeen percent. Next year comes around and the property owner still hasn’t paid past taxes or the new years so another tax lien comes out. Now let me explain that the owner has a certain period of time (depending on the state) to have all these taxes paid back otherwise the house is foreclosed on. We are going to say that here and Michigan the people get three years to pay all fees off. So second year tax lien comes out, you can choose to buy it if you want or let someone else buy it, either way doesn’t matter. Okay so now two of the three years goes bye, third year comes out still not paid, another tax lien comes out and the property owner is given another year, weather you are the one to buy it or not, however the owner of the very first tax lien gets the right to have first chance to purchase future tax liens or the house before others get a chance. So, no taxes are paid off the house and bank has a chance to pay off these liens, and foreclose the house for bank property to try and sell. Otherwise if the bank doesn’t pay the liens off the first share holder gets a chance to pay off the other two liens plus pay a tax deed bill to the county in exchange for the house. I just want to say the property tax can range from $90 to thousands of dollars, but by going through this process you can get a house for merely only thousands of dollars. You see the county needs to keep making money off this property tax and if someone else gets the house and can pay these taxes the county starts making its money again, therefore it is very beneficial in the tough times we are in now. Unfortunately in the year of 1999 a law was set, getting rid of tax liens and setting up a system of land sales or tax deed sales. This system basically goes through the same process but instead of you putting fourth the money for back taxes the county lets them build up until the house is foreclosed. From there you go to a tax deed sail in which you can bid on a house with a minimum bid of what is owed in taxes, along with any fees throughout the sale process.