Imagine getting a $100,000 home or property for just a few hundred dollars. By purchasing Tax Lien Certificates this is very possible and many people have obtained property this way. But you are more likely to get these same properties for a few thousand dollars. You must have some Certificates of Tax Lien for this to work, as you are the person initiating the Deed of Tax application (the first step in the foreclosure process) and you will know an approximate date when this process will occur. Remember, you started the Tax Deed application process and it typically takes six to eight months to complete.
Owning several Tax Lien Certificates gives you the ability to request the Tax Deed on all of them at the same time. This process will allow you, as a present or future investor, to save enough money to obtain real estate for “Pennies on the Dollar.” Many tax lien certificates are redeemed by the property owner prior to the actual sale date of the tax deed. The property owner must pay the value of your tax lien certificate plus the stated amount of interest owed to you. Also, the lower the value of the property, the more likely he is to get the property.
Owning multiple Tax Lien Certificates allows you a greater chance of getting one or two properties in your Tax Deed Sale. Several states have an auction format on these sales: the highest bid price takes the property. However, today’s US economy is great for investors because there is less competition from other bidders than three years ago and there is much more property foreclosed on back taxes.
The price you will pay to obtain a property has both fixed and variable costs. For example, in Florida, each county tax collector charges between $225 and $240 to initiate a tax deed sale for each tax lien certificate. The clerk of the circuit court in each county charges around $250+/- to finalize the sale of the tax deed.
If the property is owner-occupied (he/she lives in the home), then the prospective bidder will be required to pay half the tax assessed value (usually a few thousand dollars) plus all costs (dealer collector). taxes and county clerk of Circuit Court fees paid by you plus back taxes paid by you, the owner of the Tax Certificate), plus paying you additional 18% interest on all county costs to start the sale, plus all interest declared prior to filing for a property tax deed. Uninhabited (non-owner-occupied) properties will not incur half the assessed tax value, but property taxes are typically much higher. You will get the property for around 2% to 20% of its value or you will get a very good return on your money.
