Do you know about - The Top 5 States For Tax Lien Investing
Dmv Ga! Again, for I know. Ready to share new things that are useful. You and your friends.One request that is frequent asked about tax lien investing is: "Where is the best place to invest in tax liens?" Here are what I reconsider to be the top 5 states for tax lien investing:
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Texas
Texas is undoubtedly not tax lien state, but a redeemable deed state. The nice thing about purchasing a redeemable deed though, is that you get a penalty when the deed redeems, not an annualized interest rate as you do with liens. This means that it doesn't matter when the deed redeems, you get the full penalty, not a fraction thereof. And in Texas the penalty is 25% in the first 6 months, 50% in the first year. So if the deed redeems in the first 6 months you get 25 percent on your money and if it redeems in the first year you get 50 percent on your money.
The redemption period in Texas is only 6 months for non-homesteaded and non-agricultural properties. So if the deed redeems, you only get the 25 percent on those types of properties and if the deed doesn't redeem in 6 months, you receive proprietary of the property. That is an additional one nice thing about redeemable deeds in this state; you are determined the owner of the asset as soon as the redemption period is over and you do not have to go straight through foreclosure procedures. You will have to clear the title, but that is something that you would have to do with any tax foreclosed asset anyway.
Unlike some of the other redeemable deed states, in Texas you undoubtedly receive the deed at the sale and must narrative it with the county clerk. Once the deed is recorded the redemption period starts. You are determined the owner of the asset and can take proprietary of the property, but you won't be able to get clear title until the redemption period is over. Also you'll want to be careful about renting or renovating the asset since the old owner still has redemption proprietary until the end of the redemption period.
Illinois
In Illinois the interest rate is 18% but unlike other states that have an yearly maximum interest rate of 18 percent, in Illinois the rate is not per annum, it's more like a 6 month penalty rate, so your annualized interest rate in Illinois is 36 percent. The redemption period is 3 years.
Counties in Illinois may have 2 types of tax sales. At the yearly tax sale the interest rate is bid down and the tax lien is awarded to the investor with the bottom bid. Some counties will also have a "scavenger" sale of items that did not sell in old tax sales. The bidding for this sale is dissimilar than in the first tax sale. Instead of the interest rate being bid down the certificate is sold to the top bidder for cash, and it may be sold for less than the customary delinquent tax amount.
Iowa
In Iowa the interest rate 24% per annum. This rate is not bid down at the tax sale. But the down side to that is that the ration proprietary in the asset should the lien not be redeemed is bid down at the tax sale. It is the investor willing to take the smallest ration in the asset that wins the tax lien. So though the yearly rate is high in Iowa, there may not be as much incentive for the owner to redeem the lien, since he doesn't lose the asset entirely if he or she doesn't redeem the lien. What's good about Iowa is that the percent proprietary is not all the time bid down. This depends on the course followed in each county. Some counties will award bids based on a lottery theory rather than a bid down the proprietary interest theory of bidding.
Georgia
Georgia, like Texas, is an additional one redeemable deed state. But even though it is a redeemable deed state, the redeemable deeds in Georgia are more like liens than deeds. Unlike Texas, you are not determined the owner of the property, and have no right to the property, until the redemption period is over and you foreclose the right of redemption. This is undoubtedly more like a lien than a redeemable deed, with the irregularity that you do get a penalty of 20%, not an annualized interest rate, if the deed does redeem. The 20% penalty is paid on the full number that is bid at the tax sale. Since the price of the deed is bid up at the tax sale, this can make redemption difficult for the asset owner and the possibility of undoubtedly foreclosing on the deed more likely for the investor.
Nassau County, Ny
Most of New York State sells deeds, not liens. The 5 boroughs of New York City do sell liens but not to private investors. They bundle their liens into large packages and auction them for millions of dollars to big fund companies. There is one Ny County that has a very well attended tax lien sale each year, and that's Nassau County. The interest rate is 10%, but like Illinois, it's 10% per 6 months, not per annum. So if you are lucky adequate to get the default rate on a Nassau County tax lien, you undoubtedly get 20% per annum on your lien. The villages of Nassau County hold their own tax lien sales once a year, adding to the occasion of the investor to obtain liens.
These five states have the top returns for tax liens, or redeemable deeds, but, with the irregularity of only one county in Illinois, none of these states have online tax sales. So if you don't live in or near these states, they may not be the best place for you to invest. If that is the case, you'll want to be on the watch for my next narrative "The Top 5 States For Investing In Tax Liens Online."
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