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thats how you learn. by reading.. ever hear the saying Reading is Fundamental lol .. this isnt like the Matrix movies where we can hook up our brains to a computer and get fed the information in seconds lol wish it was..
Nicholas
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Turns out the book is horribly outdated. It also turns out I live in Iowa where the rate is 24% and thousands of properties never get bids.
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Now if anyone has any experience, I have some questions to things I cannot find online
R1Man
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Nicholas, what exactly are you trying to figure out...give an example...are you trying to buy houses???
Machiavelli
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quote:Originally posted by Nicholas: Turns out the book is horribly outdated. It also turns out I live in Iowa where the rate is 24% and thousands of properties never get bids.
yes the book is outdated but it gives you the basics and general idea behind tax lien investing.. and 24% sounds damn good to me lol .. and if nothing gets bids in your state then it shouldnt be difficult for you to bid on them and win.. and if the owners don't pay back the back taxes the properties can be yours free and clear...
R1Man
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Most properties go through sheriff auctions. They are usually sold for no less then 20% less then the appraised value. If you go to your city website...I'm sure you'll find a list of properties where taxes are owed and homes are seized. To find see the homes that are for future auction...you have to contact the city treasurer and set up an appointment to view the property and to get the location. My parents buy homes in sheriff sales and fix them up and sell them for $30-50k profit. Its a lot of work but worth it if your a handyman. There is little money in buying homes that are in top notch shape. You WILL get taxed 28% of the profit if you don't own the property for 2 years or more. There is ways to get around this like creating your own business and making it into a corporation...just make the business restoration related and you can buy all kinds of crap, write yourself checks, write off meals, milage, vacation meetings, etc. Its a good way to shield your profits. Also, when you form a corporation...you have to issue stock to the directors. Obviously give yourself (president)10,000 shares, your wife (Treasuer) 10,000 shares, and everyone else 100 shares. This way you claim dividends from the profit of the sales and you keep the $$$ in your family. IT WORKS!!!
R1Man
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quote:Originally posted by Machiavelli:
quote:Originally posted by Nicholas: Turns out the book is horribly outdated. It also turns out I live in Iowa where the rate is 24% and thousands of properties never get bids.
yes the book is outdated but it gives you the basics and general idea behind tax lien investing.. and 24% sounds damn good to me lol .. and if nothing gets bids in your state then it shouldnt be difficult for you to bid on them and win.. and if the owners don't pay back the back taxes the properties can be yours free and clear...
True and but you left out something. What ever bid you win...the original owners get the opportunity to buy the house back at that price...even though its your bid not theirs.
Machiavelli
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quote:Originally posted by R1Man:
quote:Originally posted by Machiavelli:
quote:Originally posted by Nicholas: Turns out the book is horribly outdated. It also turns out I live in Iowa where the rate is 24% and thousands of properties never get bids.
yes the book is outdated but it gives you the basics and general idea behind tax lien investing.. and 24% sounds damn good to me lol .. and if nothing gets bids in your state then it shouldnt be difficult for you to bid on them and win.. and if the owners don't pay back the back taxes the properties can be yours free and clear...
True and but you left out something. What ever bid you win...the original owners get the opportunity to buy the house back at that price...even though its your bid not theirs.
Tax Liens are different.. you are not bidding on the property.. you are bidding on the property's debt.. so in essence you own the debt and will collect the past taxes.. the only way the owners will get the property back fully is to pay back the back taxes to the new owner of the tax lien which in this case would be Nicholas for example and if in his state the interest on tax lien's is 24% whether he gets the property outright if they dont pay the backtaxes or if he collects the taxes plus interest he wins either way and makes a profit either way.. again this is not foreclosure or bidding/buying any property then fixing them up for resale etc.. your buying up the debt... you could have paid off the mortgage a long long time ago but you still have to pay the taxman his cut till you die... if you don't they put a lien on your property for any taxes you owe... thats where people like nicholas come into the picture.. Taxman doesnt want the property tied up in liens and wants his money now.. so Taxman auctions off the lien to banks/institutions, investors etc.. not the property itself but the taxes owed.. just because the taxes were transferred to a new Taxman doesnt mean they dont have to get paid.. they still do and if over time it's not then the new Taxman can own the property free and clear.. but if not and the taxes are paid off Nicholas still makes the principle plus any interest (in his case 24% interest) ...
Nicholas
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Is the interest compounded every month, or a total of all taxes owed with a flat 24% added at the end?
Nicholas
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So in any case, you have to have a good amount to invest
Even if you win a house at $100 worth $1mil, you still have to pay the delinquent taxes...or sell off, if you sell before a set period has passed there is a heavy tax, unless you own a corporation
Do you have to pay the taxes immediately, or can you list the house for sale right away and avoid that until the sale?
Also, in Iowa, it is 1.75 years (or 1 year and 9 months). How is that measured though, is 30 days a month, or what?
ranger10
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Seems like you guys are talking about investiny in real estate. If thats the case i suggest looking at pre-forclosures....thats my speciality. Lots of $$ to be made dealing with pre-forclosures.
Nicholas
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The economy is going bust, interest rates are going up again, too many people are trying to get into real estate, there is just too much competition and overhead to be into real estate right now
Liens are an entire different area and don't require tens of thousands of dollars to get into
Machiavelli
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AGain this is not investing in real estate... lol i guess i have to repeat myself.. you do not buy the tax lien and pay it off and the house is yours.. you are buying up the debt from Uncle Sam or whoever the gov't is that auctions it off.. then the homeowners owe you the debt plus % ... this is not buying foreclosures, fixer uppers , no money down schemes etc.. etc.. the best example i can give so you understand what this is is you a "loanshark" buying a debtbeat's Debt from another "loanshark" for pennies on the dollar... the Debtbeat now owes you the money and if they dont pay you the money by a specific time then you take their house.. get it now??? lol ....
Nicholas
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quote:Originally posted by Machiavelli: AGain this is not investing in real estate... lol i guess i have to repeat myself.. you do not buy the tax lien and pay it off and the house is yours.. you are buying up the debt from Uncle Sam or whoever the gov't is that auctions it off.. then the homeowners owe you the debt plus % ... this is not buying foreclosures, fixer uppers , no money down schemes etc.. etc.. the best example i can give so you understand what this is is you a "loanshark" buying a debtbeat's Debt from another "loanshark" for pennies on the dollar... the Debtbeat now owes you the money and if they dont pay you the money by a specific time then you take their house.. get it now??? lol ....
Or land...or business...etc.
ranger10
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yeah i know what you are talking about....i know alot of real estate investors that use this method to get houses. Buying mechanics leans on houses etc.
Nicholas
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So does anyone here actually have any experience with these?
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