Tax Lien investing requires significant due diligence. Post 5

Coach Mitch’s REFLECTIONS™

 

Be warned!

This is no kidding around! Your hard earned money is at stake, literally.

That’s right! If you buy the wrong tax lien certificate, then you will probably lose all your money, not just the interest. What?!!

How can that be possible? The government “guarantees” tax liens don’t they? The guru said so.

Well, the truth is that, by design, many owners will not pay their taxes.  There is a significant percentage of tax delinquent properties where the owners have no intention of ever paying the taxes. That should be good news, because then you get the grand prize, the property; and for only the cost of the taxes that you have already paid. Right?

Since you paid the property taxes and received a tax lien certificate in return, if the tax delinquent property owner does not pay the property taxes back to you, plus interest, then you are very likely to get ownership to the property.

Not all property is valuable

But, why would the owner not pay the taxes in order to secure his property? The answer is simple – maybe the property is not worth the taxes.

After all, what reasons could there possibly be as to why a property owner will not pay the taxes on his property?

1. He is a tax protester.
2. He is a financial genius and he can make more money by investing the tax monies in something else.
3. There is something very wrong going on in his personal situation, which is very probable.
4. OR – the property is not worth the taxes. The property owner does not want to throw out good money after bad.

This is a new thought

But how can it be that land has no value? We are all told that “It’s land, and they ain’t making any more of it.” Well, there is land and then there is LAND!

Imagine for a moment the kind of land on which you must pay taxes, but land that you definitely do not want to own. Without experience, it’s hard, isn’t it? We have been so gated to think that all property is valuable.

Let’s get specific

Would you want to be legally responsible for and liable to pay the taxes and maintenance on:

1. A ravine – what value is a steep hill with a 60° incline?
2. The median in a highway – just how will you profit?
3. A narrow strip of land in a development, 6′ X 100′ – how thin a house can you build?
4. The land under a bridge – not even a lemonade stand would do well there?
5. Land, with utility easements under it – maybe it can be used as a parking lot if it is in exactly the right place, but not much else.
6. A quicksand bog – ’nuff said.
7. Land that is landlocked – how will you get to your land if it is totally surrounded by land that someone else owns, and they won’t make a deal with you?

I think that you get the idea.

Not all land is valuable. Some land is downright not valuable and you don’t want to own it. Now you know why the current owner is not paying the taxes and if you purchased a tax lien certificate with a ravine as the collateral, then you should think long and hard if you actually want to take ownership of that particular piece of property.

Rather, you just might decide to take the loss of your tax lien certificate payment and not be responsible for the ravine.

Of course, you have just had an expensive seminar, you are not alone

Many others had the same idea as you

For the first time, this past tax lien certificate auction in Maricopa County, Arizona, sold out all the TLC’s. There are thousands of dessert lots in the outskirts around Phoenix that have little or no value, yet every tax lien sold. It will be years, if ever, for those dessert lots have even a marginal value until roads, utilities, and development has been built. Therefore, it will be years until people can move there.

TLC’s – yes or no?

Is investing in tax lien certificates a good investment? That is like asking “Is it a good idea to invest in the stock market?” The answer is “maybe”, depending on the investment.

There are many fine, wise, prudent and highly profitable tax lien certificate investments. But, just like any other investment, proper due diligence is absolutely necessary.

See Coach Mitch’s “Ridiculously Simple System…” ™ for details.

Safe investing –