www.REIClub.com – Are Tax Sales a Good Investment For Real Estate Investors? Here Is A Quick Video On The Pros And Cons Of Investing in a Tax Sale Hi, this isFrank Chen with REIClub.com, the only site you need as a real estate investor. Today I’ve got quick video on the Pros and Cons of Investing in Tax Sale Properties. Tax Sale vs. Tax Lien – Tax Lien A lien in general is a claim or security of interest placed on personal property to secure the repayment of debt. Therefore, a tax lien is a lien imposed by Federal or state law to secure payment of back taxes. As the investor: You buy the rights to the money owed in taxes and the interest and penalties that have accrued. – Tax Sale: (also known as aa ‘Tax Deed Sale’) Refers to property, in this case real estate, being sold by a taxing authority or the court to recover delinquent taxes. This is commonly done by Auction. As the investor: You are buying the rights to the property itself. – Return on Investment Tax Lien: Allow you to earn high interest rates on your investment – When delinquent property owner “redeems” the lien you get your initial investment PLUS a guaranteed percentage interest. The interests vary by state. – Average 12-24% interest per annum – as high as 50% Tax Sale: Deed sales transfer full property rights to your name. – Average Purchase Price 30-60 cents on the dollar – Tax Value = Purchase Price – Right of Redemption: Gives the right to the original homeowner to reclaim their property during a …
