A Tax Lien Home purchase can lead to a nice return on your investment. A property, which the government has put a lien against do to failure to pay taxes on time, is considered a Tax Lien Home. This lien is called a certificate and allows an investor to purchase the right to collect taxes from a non-paying property owner by way of the government. The certificate does not give any property rights to the investor only the right to collect payment and any interest due on said property.

Many people do not know there are basically two types of tax investing. They are certificate investing and deed investing. Deed sales are different than certificates, deed sales occur when a delinquent non-payer after a period of time still has not for whatever reason paid his taxes due. The government will hold an auction and will sell to the highest bidder the property whose taxes have not been paid on. This transaction gives total and complete ownership and all rights to the investor.

The non-payer loses all rights to his property, this does not happen often as nobody wants to lose ownership of what is theirs and get nothing in return. But when it does happen a investor can purchase property for 30%, 40%, even 60% or 70% less than what it is worth, its hard to beat those rates.

Now the certificate holder has no property rights only the right to collect a debt, here is what I mean. If an owner is late on his tax payment they will issue a certificate and offer it for sale to highest bidder. When the bidder takes control of the certificate he agrees to pay the tax bill for the owner. When the property owner decides to pay his debt to the government (you the investor is only loaning him the money) you the investor after the delinquent non-payer settles up will get 100% of your initial investment back plus interest on your investment that the government will charge the late paying owner. This interest amount can be 12%, 14% up to 18% depending on what state the tax lien certificate was issued in. You can't get that at a bank.

These investments are very high secure investment with very low financial risk involved, do to the fact they are secured by the property the taxes have not been paid on and if the non-payer decides never to pay his taxes he realizes the government will hold a deed sale and sell off his property to get the money owed to them. Having the thought of one losing his property hanging over his head causes property taxes to end up being paid over 98% of the time thus literally guaranteeing you the investor a nice profit.

A Tax Lien Home no matter if you are referring to certificate or sale of deed will be a terrific investment opportunity if you are aware of what and how to do it.

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