Government Auctions For Tax Lien and Tax Deed similarities – Houses For Under $2K?

Government Auctions For Tax Lien and Tax Deed similarities – Houses For Under $2K?




It was one of those late nights where the TV is teaching you how to make a million dollars just by parting with four payments, no make that three low payments if you acted now (that’s why you don’t keep a phone near your bed). Then the most interesting infomercial came on covering an area I know very well, that being foreclosures and government auctions. In this case it was in the form of what they referred to as ‘character tax sales’. For the more complex audience that would be referred to as ‘tax liens’ and ‘tax deeds’ government auction character sales.

In this infomercial they were claiming that if you purchased their program you could run out and buy a nice house in a great neighbourhood for under $1000. Examples were shown of modern executive kind homes that were acquired for $2000 to $3000 dollars. They briefly mentioned this was done by paying off someone else’s taxes. But that was about as much detail as they went into, the rest was focused on the great houses you would be guaranteed to buy if you simply bought and followed their program.

So can you buy a nice house in a good area by a tax lien or tax deed opportunity for a associate of grand? Well the answer surprisingly enough is yes! It’s just that the infomercials aren’t creditable because they don’t provide any insight as to how this could be possible. There are truly two possible ways to receive very inexpensive homes. Here’s how it works. It’s a known fact that the government if not an entity that you want to default on when it comes to paying character taxes. They will always do in any case it takes to retrieve these taxes as it is counted on to cover the budget for the local community including schools, town and city inter-development, etc.

To retrieve these unpaid taxes the county government holds a public auction where they have a ‘tax lien sale’, and any one in attendance can bid on a lien certificate that represents the debt owed by the homeowner. Basically, anyone in attendance is bidding over the debt of the homeowner. Over a predetermined time period the homeowner will pay the lien certificate purchaser with interest in exchange for the investor covering their debt. So here is where the opportunity for obtaining a cheap house is presented to the investor (lets assume you are this opportunistic investor). If the homeowner fails to pay you back in complete over a time period set by the local and state government then you have first right to foreclose on the character and acquire the similarities title. So your investment helps out the home owner as they can delay and hopefully avoid foreclosure, while there is virtually zero risk for you as your investment is secured by the character itself. You’ll earn a very good interest rate on your loan with the upside chance of possessing a house if your loan is defaulted.

Being the shrewd business opportunist that you are you will clearly want the homeowner(s) to default on the loan. If you feel a sense of sorrow for the homeowner well that’s understandable, but remember you helped them by providing additional time for them to pay their taxes. If they nevertheless can’t pay them after the additional time is depleted then it is in their best interest not to be burdened with owning a house in the first place. Renting would be a much cheaper and a less stressful near term solution for them in this situation.

Tax deed sales are different then tax lien sales, other than the fact they’re both obtainable at government auctions. A tax deed sale is when the government is selling a foreclosed character itself rather then selling the debt on the character. In the case you as the investor would buy immediate rights to the character. So depending on the situation, the government has the choice of selling a lien certificate or proceed with a tax deed sale, in order to cover the homeowners tax debt. With a tax deed sale the current homeowner has no choice but to surrender the rights to his or her character.

The good news for the homeowner is that they will be cleared of all liens and debts related to the character. So depending on the prearrangement and local state laws, you as the investor, upon receiving title of a tax deed sale, may be responsible for any noticeable liens, mortgages, and any other debts on the home. If there is one thing you should take away from reading this it would be to understand what debt, if any, you will be inheriting when purchasing a tax sale character (or any character for that matter). This information is publicly obtainable and can be freely found at your local government office. Auctions where these tax lien and tax deed listings can be found are on a few of the better government auction sites. The link below provides free advise and reviews on how to find these government auction sites.

Tax lien sales and tax deed sales are definitely two of the best investments of any kind, which you can assistance from by researching the right government auctions sites. A review site will educate you on which government auctions sites will successfully provide you with this information and make sure you avoid many of the scams trying to charge for information they don’t have access to.

There isn’t another investment obtainable where you can earn a 10%-20% interest, and if not paid, gives you complete title to a new house or an investment where you can buy a house outright for cents on the dollar. So look into tax liens and tax deeds opportunities and who knows maybe you’ll retire sooner then you think.




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