0% Percent Bids And Premiums.
Why would a investor bid 0% and a premium on top of no interest, Many savvy investors are willing to accept 0% interest rate on the initial investment in order to acquire the tax lien, in order to get 18% return on subsequent taxes.
Investors earn penalties of between 2 and 12 percent on every tax lien even if the interest rate is bid down to 0.
Let’s say I bid 0% on a tax lien the tax has not been paid for the year, they owe 45,000.00 on a 3.5 million home/land,
If the lien is paid off the 1st year I get no interest just penalties, up to 12%, the second year I am in position to pay off the tax for that year no bid just pay the 45,000.00 and now I have penalties and the 2nd year at 18% and I now have 90,000.00 invested. If I let it go a 3rd year another 45,000.00 at 18% first off the bank will never let me foreclose they have to much invested themselves
So in 3 yrs I get my money back plus an average of 16% profit
One main thing about buying tax liens, to keep your first position you must buy all subsequent tax liens on any and all that you buy or you will lose your position to some other investor if they buy your lien at the next auction to keep your first position you have to purchase all liens,
I hope this makes sense, I would recommend a good book on the subject Tax Lien$ by Michael Pellegrino, Esq.
Hi
If you haven’t already given it to your lawyer he/she can take care of it. Some sell the lien before they will foreclose. Some don’t care. If you don’t do it someone else will.
Thanks.[ Edited by lithiumcove on Date 03/05/2008 ]
Just curious are there alot of properties going to sale?
Craveness:
Has the list been published for the 2008 sale? If so,is it on-line?...in a newspaper?
Thank you.
I was in Las vegas recently and went to the court house to check out the situation. It looks like it is very competitive and the next auction is in April. The list is published in the local paper 3 weeks before the sale. Good Luck!