Buying Tax Liens on Foreclosed Houses can Generate 16% Returns (+2K Views)

One can profit from foreclosed houses without buying the properties, but by buying the tax liens on the properties. Words: 298

In edited excerpts from his original article* John Cutts (www.realestateproarticles.com) goes on to say:

In Maricopa County, Arizona, tax lien buyers can earn up to 16 percent annually if they acquire good liens. Lenders typically pay up all the unpaid taxes on properties they foreclose upon, so lien holders can expect immediate returns on their lien investments.

Investing in real estate tax liens is ignored by some investors, but tax lien experts say returns from them are more dependable than other property investments.

In the tax-lien bidding process, investors bid for the best interest rate, starting from 16 percent and going down in increments of 1 percent, 2 percent or 3 percent or higher whole-digit increments. The interest rate goes down as the bid progresses.

In the case of Maricopa County, the average bid last year was 8.7 percent. This year, the level of opportunity for investors is likely to become the highest in years as record numbers of foreclosed houses and sharp declines in real estate values caused a sharp spike in unpaid real estate taxes in 2008. These tax liens will be sold off to investors in an auction in February.

According to tax lien experts, investors should do their research on the liens, especially liens involving foreclosed houses. They said that some properties could be deemed environmental hazards or could be sold off at a price not enough to pay the tax liens.

*Original Post: “Earning Money from Foreclosed Houses by Buying Tax Liens” on Foreclosure-Support.Com.