Tax Liens & Tax Deeds

Question 1

What two factors determine your property tax?

Answer 1

1. Assessed Property Value

2. Property Tax rate in your county,

Question 2

What is a Lien?

Answer 2

A Lien by Definition is a claim against an item which affects the ability to transfer ownership by another party which utilizes that item as security for repayment of a loan or other claim

Question 3

Most common type of lien?

Answer 3

Mortgage

Question 4

When and only when does lien become active?

Answer 4

The lien only becomes active if the terms of the contract are not met.

Question 5

Why do county governments sell Tax Liens?

Answer 5

County governments are authorized to sell tax liens to the public to recover delinquent property taxes.

Question 6

How is a lien removed?

Answer 6

All delinquent taxes, penalties and fees must be satisfied in order to remove the impending lien.

Question 7

What is the Redemption period?

Answer 7

The grace period that the property owner is given to redeem all property rights and remove lien.

Question 8

Major differencr between tax liens and tax deeds?

Answer 8

Tax Liens do not imply any type of ownership rights. Lien holders maintain the right to initiate foreclosure if the terms of the lien are not met, but they do not provide ownership liability or rights until foreclosure is complete.

Question 9

What does an investor get with a tax deed?

Answer 9

Investors that purchase Tax Deeds are purchasing parcels of land outright with no redemption period or interest rate paid.

Question 10

When can a Tax Deed be bought?

Answer 10

After foreclosure on the property has taken place, the county holds a deed sales where tax deeds are sold.

Question 11

What can you expect to pay when you acquire a Tax Deed?

Answer 11

-Delinquent taxes, penealties and fees

Question 12

What is a Redemption Deed?

Answer 12

a hybrid of both Tax Deeds and Tax Liens. Redemption deeds are tax deeds with redemption periods.

Question 13

Why are tax sale list published?

Answer 13

Most counties are required by statute to publish a list of properties scheduled for auction between one and six weeks prior to the sale.

Question 14

Why should you wait until the last two weeks before the sale to review property list?

Answer 14

Because alot of people wait to the last week to pay deleqeunt taxes, you dont want to waste time researching a long list of propertes that wont be available. Also the list gets shorter and more reasonable to manage the longer you wait.

Question 15

What is Due Diligence? Why is it important?

Answer 15

Due diligence is the process of researching potential investments in order to make an educated decision with your investment.

Investors that perform the necessary property research before the auction understand exactly what they are bidding on. The prepared investor knows what the potential return is, and also knows what properties to avoid.

Question 16

What types of land is bought in the majority of Tax leins and Deeds?

Answer 16

the majority of Tax Liens and Deeds are against raw land and other properties without structures or improvements. The opportunity to acquire homestead properties exists all over the country, but usually requires more research and time.

Question 17

What should you bring to Tax Sale?

Answer 17

Investors should also be prepared with a list of properties including the maximum bid and any prepared notes. Also proper form of payment

Question 18

How long does a bidding session last?

Answer 18

It depends on the amount of parcels for sale, some can last up to several day.

Question 19

Why is a shortage of bidders a good thing?

Answer 19

It may allow you to get the property or certificate you want for less and allw you to get a better rate of return.

Question 20

In order to make sure you tax lien is valid, what must you do shortly after you attain it?

Answer 20

Get it recorded with the proper official so that your claim is recognized officially.

Question 21

How does self-executing foreclosures work?

Answer 21

Those states and counties that have self-executing foreclosures handle all of the required notices and steps necessary to foreclose. The lien holder simply waits for the process to be executed to collect a tax deed to the property

Question 22

How does non-self executing foreclosures work?

Answer 22

States and counties that practice non self executing foreclosures require the lien holder to send the necessary notice and perform the proper procedures. Individual counties stipulate the necessary procedures to foreclose on any property.

Question 23

Why does Florida add a 5% penalty to leins paid off in the first year?

Answer 23

This is to provide further incentive to the investor. If the lien is paid in the first month and the investor is promised a 12% annual return, the investor will only get a 1%. But with the penalty the investor gets an extra 5% in the pay in the first year.

Question 24

What should the goal of every Tax Lien investor be?

Answer 24

The goal of every tax lien investor is to have their money constantly invested and earning income.

Question 25

What do you need to be successful as a tax lien investor?

Answer 25

To be successful in your endeavors you must devise an investment strategy. This strategy should be based on your investment objectives.

Question 26

What is “Over the Counter” investing?

Answer 26

Many states allow you to purchase tax liens directly from the county. This is often referred to as “over the counter” investing. Over the counter investing allows you to conduct research from the comfort of your home. It also provides you with the necessary time to conduct the proper due diligence and research.

Question 27

What state is known for using the redemption deed process?

Answer 27

Texas

Question 28

What are characteristics of liens that will redeem?

Answer 28

Have outstanding mortages
Highly value property
Parcel has improvements or structures on it
Occupied by responsible party
Highly valued compared to lien amount.

Question 29

What are charateristics of liens that will go into foreclosure?

Answer 29

No mortagage against property
Owners live out of state
Abandoned or unoccupied
Multiple liens over several years
Value is low compared to the lien amount

Question 30

Does Tax Liens always mean the owner is in financial distress?

Answer 30

No. Alot of time tax liens are on the property because a mortgage company holds a note on the property and the owner is just paying the note down.

Some may see a tax lien as an easy way to deffer taxes and pay them later.

Some people simply forget to pay until they recieve notice and then they pay.