What is meant by a hidden gem? If money is involved then how come it is not exploited like every other avenue of making money? Well to put it simply, not a lot of people know about this money making treasure. How does it work and how would you make money? Basically, a tax lien is an outstanding/overdue property tax owed by the property owner who neglects to pay it or cannot afford it. Therefore, the government tries to recover this money by selling tax lien certificates to investors. This certificate is secured by the real estate it is attached to. In essence, when one buys a tax lien, you are paying someone else’s property tax.
The best part of this deal is that the government actually gives one the right to receive all the tax money back plus other fees that includes penalties and high interest. For example, in Fort Myers, Florida the interest penalty is 17%, where as in certain counties in Texas the interest penalty is a whopping 25%. Imagine investing in something and getting a GUARANTEED 25% return on your investment. The worst case scenario is that if the owners cannot pay the tax, you get the property that is free from mortgage and debts. Imagine investing $3,000, but due to the negligence of the owners can’t pay their taxes, therefore you get to keep a property that is usually worth 30-40x than your initial investment, if not more.
This is a very simple process. You could wither go to the actual state or you can do it from the comfort of your own home. Imagine making millions of dollars a year from minimal investments. The profits to be made are relatively infinite. Just to give you an example, I bought a house in Arizona 1 years ago for $4,178. I live in Canada and I did not have time to fly all the way to Arizona. The market evaluation on the house was $620,000. The owner did not pay his taxes on his property therefore defaulting on his property. GUESS WHAT? The house became mine and I sold it for $580000 due to the recession and limited amount of buyers. I made the equivalent of 138 times of my initial investment. Imagine if it wasn’t a recession and it was prosperous times. I could have sold that house for $640,000 according to my real estate agent down there.