Can someone explain me what a tax lien certificate is and how can it make me money?
Apr 10, 2009 in
Questions And Answers
I want to learn how to invest in realestate without spending too much money?
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One comment
John Rosa on April 10, 2009 at 8:53 pm
Tax liens are government "IOU"s (I owe you). Since the property owner was late on his taxes, the government borrows money from investors. Once the property owner pays his taxes with penalties and interest, the investor gets paid back (with the penalties and interest).
For instance in Florida you could get up to 18% return on your investment, in Arizona 16%, and so on… Investors including banks invest in tax liens because people want to live in their homes. They will pay that much interest rate so they can remove the shadow of foreclosure. If they don't pay taxes, their houses could be foreclosed by the govt.
Be careful though there are risks involved. You need to know what you're doing. Read up on a book before you start investing. I have some suggestions below.
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