Almost everyone has heard about foreclosures but not too many have heard about tax lien foreclosures. This type of foreclosure results from non-payment of taxes due to property, income other taxes put against any type of property.

If foreclosure occurs, more likely than not the original property owner will not be able to bid on the property. The sale usually is held at the courthouse or the property being sold and notice of the sale is required.

Here is how this type foreclosure happens:

When a property owner does not pay his taxes on time, it causes the government to have less money to do its business, so what the government puts into place to try to make sure it will have money is a penalty fee (tax lien) against the property where taxes are owed.

This penalty fee is substantial, it can be 18%, 24%, even 36% of taxes due, this is a real incentive to pay on time. Also the government will allow investors to buy certificates (not available in all states) by a bid process. You do not take ownership of the property; you pay the late taxes for the delinquent non-payer and wait for him to pay you back. This allows the government to get their money through investors and when late taxes are paid the investor will get his original investment back, which was the amount paid plus the investor will receive as compensation for covering the tax payment; the late payment fee, which is obviously normally a good return on money invested.

If the above does not work or is not available in your state then tax lien foreclosure happens. It takes time to get this far, in some states up to 5 years.

An investor, if your state sells certificates can start foreclosure proceedings on property that he holds a certificate on after the said amount of time to pay the late taxes back has ended. When this occurs proper foreclosure gives all property rights and ownership to the certificate holder as payment for cost of original investment plus interest.

TAX LIEN FORECLOSURES usually create a very very high profit margin for the investor, I am talking 30%, 50% on up. Now in some states the government will not issue certificates they will go straight to a foreclosure.

If you are reading this and you owe taxes - find a way to pay them, at the very least if you do not you will owe a very steep late penalty fee and at the worst you will be foreclosed on and lose ownership of your property!

If you are reading this and you are thinking up one question after another about TAX LIEN FORECLOSURES and how investing would be easy as pie, think again.

If you do not have the knowledge or know-how for investing it can be costly. But if you get the right information and proper steps are followed, you to can realize your dream of financial stability can be as easy to obtain as pie.

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