Face Value
Can anybody explain to me how you make money with a tax lien when the face value is $40 and 18% interest and they go at the auction( ebay) for like $250 ?
Thank you.
Can anybody explain to me how you make money with a tax lien when the face value is $40 and 18% interest and they go at the auction( ebay) for like $250 ?
Thank you.
Quote:
On 2008-10-27 09:52, nashua wrote:
Can anybody explain to me how you make money with a tax lien when the face value is $40 and 18% interest and they go at the auction( ebay) for like $250 ?
Thank you.
Are tax liens sold on eBay?
1. Not really understanding your post. Perhaps you’re saying a property bought at a tax sale by someone else, who paid $40 for it is now selling it on eBay for $250. Please explain.
2. If tax liens from the taxing authority are sold on eBay would you tell me how I find them?
If you own the tax lien, you ensure that you make money by selling the tax lien. Buy for $40 sell for $250 and you have a $210 profit.
If you are buying this tax lien off ebay, you are speculating. You are hoping that the lax lien does not get redeemed and that you will eventually own a property worth sever times more than the $250 you paid for the lien.
I have seen tax liens for sale on ebay. Many of the liens have long redemption periods (some up to three years) before the lien holder can foreclose. In the interim, the lien holder has to pay the property taxes that may be assessed during the redemption period.
As an aside, even though the lien has a face value of $40, the winning bidder may have paid more. If you purchase the lien, and it is redeemed by the homeowner, you will be paid the difference between the lien amount (face value) and the bid price, plus the accruned interest on the lien. So, you can still make money on the interest premium if the lien holder also paid $250 for the lien.[ Edited by NewKidInTown3 on Date 10/28/2008 ]