Tax Properties
Every property that is owned is assessed property taxes that
must be paid every year. Property taxes are paid to local and
state governments based on the appraisal value of the real
estate. All states, the District of Columbia, Puerto Rico and
the American Virgin Islands and Canada have property taxes.
When a property owner doesn't pay their taxes, they are usually
penalized and warned. If the owner still doesn't pay the taxes,
the property is either seized, gets a lien placed against it, or
both. After due process, the property is sold at a tax auction.
Tax auctions provide one of the most extraordinary investment
opportunities that exist to date. If properly educated, an
investor can by real-estate for a small fraction of what it is
worth. They can rent, sell, or use the property for themselves.
In most states, the government taxing agency allows investors to
pay a delinquent owner's taxes. The investor receives a tax lien
certificate. If the owner wants to keep the property, they have
a limited time to pay off the lien, including interest, fees,
and any additional taxes that had been paid after "possession".
If the owner fails to pay off the lien, the property is deeded
to the investor.
In some states, the government taxing agency will not allow
investors to pay the taxes, so the property is seized and goes
to the agency. The property is then auctioned off, usually for
back taxes, penalties, and interest. The successful bidder
typically gets 1st lien, so the dead is free and clear.
In other states, the delinquent property is sold at auction for
the amount of taxes, penalties, and fees, but the original owner
has a time period to buy the property back. The buy-back price
includes interest (often very high), penalties, fees, etc. The
taxing agencies make the deal as sweet as possible to encourage
investors to bid on the properties and solve the delinquent tax
problem.
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