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How Does the Tax Lien Certificate Investment Process Work? A brief overview... Once property taxes are delinquent for one year, the county government is going to offer tax lien certificates on all of the delinquent properties. As investors, you and I can acquire tax lien certificates that pay us fixed rates of returns 8% to 36% interest per year depending on which county we're investing in. You can also acquire tax lien certificates directly from the county through a strategy called "assignment purchasing."
You can also acquire tax lien certificates directly from the county through a strategy called "assignment purchasing."When you acquire a tax lien certificate, by law, you are now the first position lien holder of record. Yes, the tax lien certificate even takes priority over the mortgage.
When you acquire the tax lien certificate, in essence what you're doing is paying the delinquent property tax bill, and in return you receive a tax lien certificate. Similar to a government bond or bank certificate of deposit (CD), the tax lien certificate bears an interest rate. The difference is that unlike government bonds or bank CD's that pay pathetically low interest rates, tax lien certificates pay you 16% or 24% or 36% interest, depending on which county you're investing in.
Important: You don't have to go to auctions to acquire tax lien certificates; it's simply the way the process begins. You can also acquire tax lien certificates directly from the county through a strategy called "assignment purchasing."ON THE RUN..BLACK LIVES MATTER:...drop me your email...It's Still Rock and Roll To Me Billy Joel-Lyrics. Daily Events, Rebirths And Let's Go Somewhere !
When the delinquent property taxes are paid, you receive all of your original investment back, plus the guaranteed high interest rate (16% or 18% or 36%).
Each state has a redemption period, or grace period in which the delinquent property taxes must be paid. Redemption periods range from 6 months to 3 years depending on which county you're investing in.
If the delinquent property taxes are not paid within the redemption period, then the property will be taken through a judicial process (property tax foreclosure). Once this process is complete, the tax lien certificate investor will receive the deed to the property free and clear with no mortgage. Property tax law clearly states that once this process is complete, "tax foreclosure will result in the loss of ownership of the property and all rights of all interested parties..." which gives you a free and clear deed to the property.
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