Government Auctions Tax Lien Sales and How to Profit From Them

Government Auctions Tax Lien Sales and How to Profit From Them

by Jane McIntrye

Have you ever considered what the penalty is when a property owner is unable to pay their taxes? Well as you may of guessed the IRS is intolerant and will do whatever is required to retrieve the taxes due, including forcing the buyer to foreclose on their home. On the outside this may seem like a very unpleasant situation, however, there are other sources of alternative financing available to assist this owner. That’s where individuals like yourself can profit while providing a possible ‘light at the end of the tunnel’ for the distraught home owner.

A public property tax sale, also known as ‘property tax liens’, are auctions organized by local government councils in an effort to dispose of tax debt. What occurs is that the public bids on the debt owed by the property owner. For argument sake say you are the winning bidder. That means you are paying off the tax debt on behalf of the property owner by buying a tax lien certificate which establishes you as the new lender to the property owner. The property owner has to pay you back with interest before the expiration of the redemption period as predefined by the government. This redemption period can be any time between 6 months to 4 years.

However, the caveat for the property owner is that if they don’t pay the loan as agreed upon, you, as the lien certificate owner may foreclose the property and take title of it. Everyone wins, so long as you are payed back the full amount of the tax debt plus the healthy interest owned. This way, you obtain a good interest rate on a very low risk investment, while saving someone from losing their property and/or home.

Even more, the lender can sell the property after obtaining the title. Imagine how much money they can profit from doing that! It’s always best for the owner to keep up with all mortgage and tax payments, but sometimes financial problems can prevent that. Since we’re still going through an economic collapse, the odds are more often than not AGAINST the struggling homeowner.

In addition to tax lien sales, there are also tax deed sales. Tax deed sales are when the government auctions off the property and title right away, giving the winning bidder immediate ownership. The current homeowners must surrender their home and/or property immediately. They have no choice otherwise. Tax lien sales will give them a chance to maintain their home, tax deed sales will not.

Obviously, there are great opportunities for profit at government auctions, whether by earning money through tax lien sales or tax deed sales. Those who are business savvy can earn all kinds of money by either charging the homeowners high interest, or simply obtaining the home and reselling it for a nice profit.

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To locate websites with the top tax lien and tax deed opportunities and receive a free Government Tax Sale Properties Report visit property tax sales or to visit the home page click government auctions.

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