The Secrets of Tax Lien Certificates Revealed in the 16% Solution Ebook 113
What is the 16% Solution Ebook 113?
If you are looking for a way to earn high interest rates in a low interest world, you might be interested in reading the 16% Solution Ebook 113. This ebook is written by Joel S. Moskowitz, a lawyer and an expert on tax lien certificates. Tax lien certificates are legal documents that give you the right to collect unpaid taxes on a property, plus interest and penalties. They are sold by local governments at auctions or online platforms to recover their tax revenue.
16 percent solution ebook 113
The 16% Solution Ebook 113 is a revised edition of Moskowitz's original book published in 1994. It provides updated information on how to find, buy, and profit from tax lien certificates in different states. It also explains the risks and challenges of investing in tax lien certificates and how to overcome them. The ebook claims that you can earn up to 16% interest or more on your money by investing in tax lien certificates, which is much higher than most other investment options available today.
However, before you rush to buy this ebook or any tax lien certificates, you should be aware of some drawbacks as well. Investing in tax lien certificates is not a get-rich-quick scheme. It requires research, patience, capital, and expertise. You also have to deal with competition, legal issues, property damage, environmental hazards, and market fluctuations. Moreover, not all states offer tax lien certificates, and some have lower interest rates than others.
In this article, we will review the main benefits and drawbacks of the 16% Solution Ebook 113 and provide you with some tips on how to get started with investing in tax lien certificates.
How to Get High Interest Rates in a Low Interest World with Tax Lien Certificates
Tax lien certificates are one of the oldest forms of secured debt in the United States. They are issued by local governments when property owners fail to pay their property taxes. The local governments then sell these certificates to investors who pay the taxes on behalf of the property owners. In return, the investors get the right to collect the taxes plus interest and penalties from the property owners. If the property owners do not pay within a certain period of time, the investors can foreclose on the property and sell it to recover their money.
The interest rates on tax lien certificates vary by state, but they are usually much higher than the prevailing market rates. For example, according to the 16% Solution Ebook 113, some states offer interest rates of 16%, 18%, or even 24% on tax lien certificates. These rates are set by state law and are not affected by inflation, recession, or market conditions. They are also guaranteed by the government, which means that you will get your money back even if the property owner goes bankrupt or disappears.
Compared to other investment options such as bonds, stocks, and savings accounts, tax lien certificates offer several advantages. First, they are secured by real estate, which is a tangible asset that usually appreciates in value over time. Second, they are low-risk, since you can recover your money by foreclosing on the property if the property owner does not pay. Third, they are easy to buy and sell, since you can find them online or offline at auctions or platforms. Fourth, they are tax-efficient, since you do not have to pay income tax on the interest you earn until you receive it.
How to Find and Buy Tax Lien Certificates
If you are interested in buying tax lien certificates, you need to do some research first. Not all states offer tax lien certificates, and some have different rules and procedures than others. You also need to know how to find the best deals and avoid scams. Here are some steps you can follow to find and buy tax lien certificates:
- Step 1: Choose a state that offers tax lien certificates. According to the 16% Solution Ebook 113, there are about 30 states that offer tax lien certificates, but some of them have lower interest rates or longer redemption periods than others. You can find a list of states that offer tax lien certificates and their interest rates on websites such as TaxLiens.com or TaxSaleLists.com. - Step 2: Find out when and where the tax lien certificate sales take place. Most states hold tax lien certificate sales once a year, usually in the fall or winter. Some states hold them online, while others hold them at local courthouses or offices. You can find out the dates and locations of the sales on the websites of the county treasurers or tax collectors of the states you are interested in. You can also subscribe to newsletters or services that provide this information for a fee. - Step 3: Research the properties and their owners. Before you bid on any tax lien certificate, you need to do some due diligence on the property and its owner. You need to check the following information: - The location, size, condition, and value of the property - The amount of taxes owed and the interest rate on the certificate - The redemption period and the foreclosure process of the state - The title history and any liens or encumbrances on the property - The financial situation and motivation of the property owner You can find most of this information online or offline by using public records, databases, maps, photos, appraisals, inspections, title searches, lien searches, and background checks. You can also visit the property in person or hire someone to do it for you. - Step 4: Register and bid for the tax lien certificates. Once you have done your research and found some properties that you like, you need to register and bid for the tax lien certificates. Depending on the state and the platform, you may need to pay a registration fee, a deposit, or a full payment before you can bid. You may also need to provide some personal information such as your name, address, phone number, email address, and social security number. The bidding process may vary by state and platform as well. Some states use a bidding-down method, where the bidder who offers to accept the lowest interest rate wins. Some states use a bidding-up method, where the bidder who offers to pay the highest premium above the taxes owed wins. Some states use a random selection method, where the bidders are assigned numbers and drawn randomly. You can bid online or offline by using websites such as Bid4Assets.com or RealAuction.com, or by attending live auctions at local venues. You can also use proxy bidding services that bid on your behalf according to your instructions. How to Profit from Tax Lien Certificates
Once you have bought some tax lien certificates, you need to wait for the property owners to pay their taxes or lose their properties. There are three possible outcomes of owning tax lien certificates: redemption, foreclosure, or deed sale.
- Redemption: This is the most common and preferred outcome for tax lien certificate investors. Redemption means that the property owner pays the taxes plus interest and penalties to the county, and the county pays you back your investment plus interest and penalties. The interest rate you earn is determined by the state law and the bidding process. For example, if you bought a tax lien certificate with a face value of $10,000 and an interest rate of 16%, and the property owner redeemed it after six months, you would receive $10,800 from the county ($10,000 + 16% x 0.5). - Foreclosure: This is a less common but more profitable outcome for tax lien certificate investors. Foreclosure means that the property owner does not pay the taxes within the redemption period, and you have the right to foreclose on the property and sell it to recover your money. The redemption period varies by state, but it is usually between six months and three years. To foreclose on the property, you need to follow the state laws and procedures, which may involve filing a lawsuit, serving a notice, paying fees, and attending a hearing. If you win the foreclosure case, you will get a deed to the property and become its owner. You can then sell it or keep it as you wish. For example, if you bought a tax lien certificate with a face value of $10,000 and an interest rate of 16%, and you foreclosed on the property after one year, and the property was worth $100,000, you could sell it for $100,000 and make a profit of $90,000 ($100,000 - $10,000). - Deed sale: This is a rare but possible outcome for tax lien certificate investors. Deed sale means that the county sells the property at a public auction to recover its tax revenue, and you get a share of the proceeds based on your priority. Your priority depends on when you bought your tax lien certificate and whether there are other liens or encumbrances on the property. If you have a higher priority than other lienholders, you will get paid first. If you have a lower priority than other lienholders, you may get paid partially or not at all. For example, if you bought a tax lien certificate with a face value of $10,000 and an interest rate of 16%, and the county sold the property at a deed sale for $50,000 after one year, and there were no other liens or encumbrances on the property, you would receive $11,600 from the county ($10,000 + 16% x 1). However, if there were other liens or encumbrances on the property worth $40,000, you would receive only $10,000 from the county ($50,000 - $40,000). What are the Risks and Challenges of Investing in Tax Lien Certificates?
Investing in tax lien certificates is not without risks and challenges. You need to be aware of some potential pitfalls and drawbacks that may affect your returns or cause you losses. Here are some of them:
- Competition: As more people learn about the benefits of investing in tax lien certificates, there is more competition for finding and buying them. This may drive up the prices or lower the interest rates of tax lien certificates. You may also face competition from institutional investors such as banks or hedge funds that have more resources and expertise than individual investors. - Legal issues: Investing in tax lien certificates involves dealing with complex legal matters such as title searches, lien searches, foreclosure processes, deed sales, lawsuits, notices, hearings, fees, and taxes. You need to follow the state laws and procedures carefully and accurately to avoid making mistakes or violating any rules. You may also need to hire lawyers or professionals to help you with some of these tasks. - Property damage: Investing in tax lien certificates does not give you any control over the condition or maintenance of the property. The property may be damaged by natural disasters such as floods or fires; by human actions such as vandalism or theft; or by neglect or deterioration over time. The property may also have environmental hazards such as mold or asbestos that may require costly remediation. These factors may reduce the value or marketability of the property and affect your returns or losses. - Market fluctuations: Investing in tax lien certificates does not guarantee that you will make a profit or get your money back. The value or demand of the property may change due to market conditions such as supply and demand, economic trends, demographic shifts, or neighborhood changes. The property may also have zoning or regulatory issues that may limit its use or development potential. These factors may affect your ability to sell the property or collect your money from the property owner. - Disclaimer: Investing in tax lien certificates is not a sure thing. It requires due diligence, capital, patience, and expertise. You should not invest more than you can afford to lose. You should also consult with a financial advisor or a tax professional before making any investment decisions. Conclusion
The 16% Solution Ebook 113 is a book that teaches you how to get high interest rates in a low interest world with tax lien certificates. It provides updated information on how to find, buy, and profit from tax lien certificates in different states. It also explains the risks and challenges of investing in tax lien certificates and how to overcome them.
If you are looking for a way to earn passive income, diversify your portfolio, or secure your retirement, you may want to consider investing in tax lien certificates. However, you should also be aware of the drawbacks and pitfalls that may come with this type of investment. You should do your research, follow the laws and procedures, and seek professional help if needed.
Here are some frequently asked questions related to the topic of this article and their answers:
- Q: What is the difference between a tax lien certificate and a tax deed? - A: A tax lien certificate is a legal document that gives you the right to collect unpaid taxes on a property, plus interest and penalties. A tax deed is a legal document that gives you the ownership of a property that has been sold by the county to recover its tax revenue. - Q: How can I find out if a property has a tax lien certificate on it? - A: You can find out if a property has a tax lien certificate on it by searching the public records of the county where the property is located. You can also use online databases or platforms that provide this information for a fee. - Q: How can I avoid buying a bad tax lien certificate? - A: You can avoid buying a bad tax lien certificate by doing your due diligence on the property and its owner before bidding. You should check the location, size, condition, value, title history, liens, encumbrances, financial situation, and motivation of the property and its owner. You should also visit the property in person or hire someone to do it for you. - Q: How long does it take to make money from tax lien certificates? - A: It depends on how long it takes for the property owner to pay their taxes or lose their property. The redemption period varies by state, but it is usually between six months and three years. If the property owner pays their taxes within the redemption period, you will get your money back plus interest and penalties. If they do not pay within the redemption period, you can foreclose on the property and sell it to recover your money. - Q: How much money do I need to start investing in tax lien certificates? - A: It depends on how much you want to invest and how much the tax lien certificates cost. The face value of tax lien certificates ranges from a few hundred dollars to several thousand dollars. You may also need to pay a registration fee, a deposit, or a full payment before bidding. You may also need to pay fees for title searches, lien searches, foreclosure processes, deed sales, lawsuits, notices, hearings, and taxes. 71b2f0854b