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Making Money With Tax Deeds Flipbook PDF

Tax deeds are a very little known investment opportunity that is available in some form in all 50 states. Most people sh




Making Money With Tax Deeds

Table of Contents

Understand Your Investment………………..


Decide How Much To Invest………………..


Identify Target State…………………………


Identify Target County………………………


Locate Sales List…………………………….


Evaluate Properties………………………….


Determine Your Max Bid…………………… 9 Know Your Exit Strategy……………………


Purchase The TaxDeed……………………… 10 Get Paid……………………………………… 10


Understand Your Investment What Is A Tax Deed? A tax deed is issued by the county when a homeowner has defaulted on their property taxes. The counties are prohibited by law from gaining any financial advantage from this situation. As a result, these deeds are made available for purchase by private investors. The goal for the county is simply to get the taxes back up to date. As a private investor, you have the opportunity to help the county achieve their goal, while also making a very good return on your investment. Most tax deeds carry a county mandated annual interest rate of 16% - 24%, a return that is far better than anything you can achieve through CDs, Mutual Funds, or even day trading. Some carry additional penalty rates that you will receive should the homeowner attempt to pay off their taxes after you have purchased the deed. Once you own a tax deed (after any applicable redemption period), you are free to sell the property for any price that you would like. Since you have paid only a fraction of the homes actual value, this leaves a significant profit margin.


Why Don’t More People Do This? The answer is that many people simply do not understand how tax deeds work. Those that do understand, invest freely. Those that do not understand are often too overwhelmed with the process to do the necessary research. If you are interested in learning how to make this process work for you, we can help!

We offer (3) three different levels of investment help. BASIC: We provide you with the necessary information and processes for researching and evaluating a property to ensure that it will be profitable before you invest in it. STANDARD: We provide tools that help you cut the average research time on a property down from 2 hours to 15 minutes. You also get access to our online training program to help you confidently invest. PREMIUM: In addition to all of the above benefits, we provide you with an exclusive monthly list of properties we have already evaluated and approved, along with the opportunity to join with us in investing, as well as one complimentary video Q&A each month.


Decide How Much To Invest Properties can have broad range of tax deed pricing that ranges from $1000 up to $150,000 and in rare occasions, even more. You will need to decide how much capital you would like to invest to help weed out properties.

Identify Target State It is important to know which state you are looking to invest in. While it may be tempting to focus on a state that you have a personal attachment to based on family, weather, or other factors, this is not always the best strategy for wisely investing your money. When deciding where to invest, you should ask yourself a few questions: • Is the state a good market for selling homes? • What is the interest rate for deeds in the state? • What is the penalty rate for redemptions? • How long is the redemption period?


Identify Target County Just like selecting a state, it is important the you carefully choose the county that you are investing in. A few questions you will want to consider: • What is their proximity to major commerce? • What is the current population? • What is the projected future population? • What businesses will be opening there? It is also important to know that most counties have independent rules and guidelines for handling Tax Deed Sales. It is vital that you understand the process thoroughly before purchasing a tax deed in a county other than one you are already familiar with. We have resources available to help you learn about the processes for virtually any county.

Locate Sales List Once you have decided which county to focus on, it is time to find listings for available properties. There are multiple resources available for this process.


Evaluate Properties This is the step that is the most time consuming, and also the one that determines whether you will make money on your investment or end up getting a bad deal. When investment deals go sour, this is the step that was rushed through 99% of the time. There is virtually no risk in tax deeds if you take the proper time to do your homework. If you shortcut this process, you might as well just roll the dice to see if you are going to get a good deal or not. Hidden fees and pitfalls can be averted by performing a thorough research on the property. At a minimum, you must perform the following research steps: • Pull the Property Card from the Assessor. • Research the neighborhood for appeal. • Research crime statistics in the area. • Research third party estimated values. • Do a comparable market analysis. • Do a lien search on the property.


Determine Your Max Bid Once you have evaluated a property and determined that it makes good financial sense, it is time to decide how much your maximum bid should be. We can help you with this step by using a tried and true formula to determine your maximum bid and the estimated profit from this purchase.

Know Your Exit Strategy What do you plan to do with the property once you obtain it? Some people want to acquire the property for personal use. Others are looking for a solid rental property. The most common way to use these properties as an investment is to resell it for at least $20,000 more than your total investment. The traditional way to do this is to list it on the market. In some cases, you may have acquired the property for a fraction of the actual value and it may make more sense to wholesale the property to turn a quick profit.


Purchase The Tax Deed This should be based on logical facts rather than a “gut feeling”. If somebody is bidding more than you have determined to be a reasonable maximum bid, let them have it. There are ALWAYS other properties to bid on. If you let your emotions dictate your bid, you run a high risk of getting a significantly reduced return, or worse yet, you could end up owing money.

Get Paid You own the property now. Depending on what state the property is in, there may be a redemption period for the current owner. If this is the case, and they wish to maintain possession of the property, they are required to pay you the full amount of your investment. In addition, they often must pay a penalty rate. Penalty rates are often 20% or more of the actual cost paid by the investor. If the property does default to you, then it is time to implement your exit strategy. As an investor, it will not make much difference which way this goes. Either way, you will make a significant return on your investment. These rates are better than any return you can get from a bank or other traditional investment.


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