The beauty about real estate is there are so many ways that you can invest. You don’t always need a perfect credit score and hundreds of thousands of dollars sitting in the bank. To play in the real estate tax lien investing niche, you do need laser-beam focus and pounds of perseverance.
Maricopa County, Arizona is going to give real estate investors the opportunity to earn up to 16% rate of return. The county is planning on having its largest sale of delinquent property-tax liens on record, an estimated $47.5 million worth of unpaid taxes. Last year’s auction was $32 million. What do you think the 2010 auction will bring? Most likely another record.
How Can You Achieve 16% Interest Rate?
This area of investing is outside my area of expertise, but I’m going to find out the answer. Here’s how. Next week I am interviewing Joanne Musa, “The Real Estate Tax Lien Lady.” We are going to discuss some basic ins-and-outs of real estate tax lien investing.
However, I do know that if you attend one of the February auctions, you will most likely never be able to get 16% interest rate. Why? Because the lowest bids wins.
In an Arizona Republic interview, Mark Manoil, a Phoenix lawyer who specializes in property-tax issues and has written a book about tax-lien investing said, “A reasonable winning interest rate this year would be 8 to 10 percent. The average winning interest rate at the 2008 auction was 7.6 percent.”
Manoil’s 3 Big Risks In Investing In Real Estate Tax Liens
- In some cases, a property doesn’t sell for enough money to pay off all county tax liens, which can exist for multiple years and be held by multiple investors.
- Investors who don’t do their research could find themselves holding a lien on property that has been deemed an environmental hazard and could be liable for cleaning up the problem.
- A lien investor can initiate a foreclosure action against the property owner in court but not until three years after the lien is purchased, provided that it still has not been repaid.
Moving Forward,
Kendall E. Matthews
P.s. Visit Arizona Tax Liens and get a Free delinquent property tax list for Greenlee County, other counties, like Maricopa cost between $49 to $29.
P.s.s. Remember, next week I will upload an interview with the Joanne Musa, “Tax Lien Lady” so check back soon. To tied you over here is her Free Report “7 Steps To Building Your Profitable Tax Lien Portfolio.”
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