Tax Lien Certificates

In the last few years, there have been many informercials about investing in tax lien certificates. Many of these informercials claim you can make 20 - 50% or more on your investment and obtain properties for pennies on the dollar. Investing in tax lien certificates can indeed be lucrative, but the hype surrounding this investment is often overblown. Here are the facts.

• A tax lien is a lien imposed on a property to secure tax payments
• When a property owner defaults on payments, the government sells the liens at an auction so they can get the tax money immediately from an investor, who pays the back taxes that are owed and continues to make the tax payments
• In return for making these payments, the investor gets a percentage return on their money, which they receive when the property owner catches up with the payments and pays all penalties
• The percentage return on the certificates is set by the state and is usually quite high compared to other investments. 16 - 24% is common.
• If the property owner does not bring his account up to date within the "redemption period," the lien holder can obtain the property through legal means. There is therefore little risk to the investor, provided the lien is for a property worth more than the taxes owed on it.
• Not all states offer tax liens (If you live in a state that does not, see our first resource below for a book that shows how to purchase them by mail)

Tax lien certificates are considered a low-risk investment since they are controlled by the government. Each state has different laws on how tax lien certificates are handled, however, most states sell them through an auction. The rate that is set for the liens is generally anywhere from 16 to 36%. However, because of the bidding process, be aware that the actual rate you end up getting could be somewhat lower.

In most cases, you do not become the owner of property (I've read as high as 95% of the time), so don't expect to own property when you buy a tax lien certificate. What you should expect, however, is to receive a sound investment that is secured by your lien, for which you make a nice return that often beats what you can get from most other investments.

While investing in tax lien certificates is considered relatively safe, there are certain things you must understand before jumping into this investment. For example, you should know how to protect yourself from lousy properties, how to bid, where to get information on auctions, what the laws are in the state you live in, etc. Listed below are some excellent resources and books I have found on investing in tax lien certificates:

Tax Lien Secrets Course

This is the most comprehensive course on investing in tax lien certificates, and I highly recommend it to serious investors. The course is by Ted Thomas, a recognized expert who has been featured on CBS, NBC, MSNBC, and Fox. The course comes with a guidebook, 2 audio CDs, and an extensive directory. Available in printout as well as digital format. If you are serious about tax lien certificates, this is THE course to get. >> Click here to find out more

Creating Wealth Without Risk
	This is a good resource for the price. You get several ebooks for the price of one. Topics include tax lien certificates, how to invest in tax liens by mail, a comprehensive directory of tax lien states/counties, and more. Also includes a video showing an actual tax lien auction. >> Click here to find out more

Tax Lien Investing Secrets
	For those who want a more personal approach, Tax Lien Investing Secrets offers 4 audio recordings, a manual, and a live teleseminar where you can ask any questions you have about this investment. No fluff - just the information you need delivered in a straightforward way. >> Click here to find out more

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