Investor Preparation

If you are interested in investing in tax certificates, you will need two important attributes: patience and liquidity.

Because of the redemption and foreclosure period required, the investor must be willing to wait six to 24 months before receiving full ownership of the property.

The prospective investor also needs cash now to bid for tax certificates. The taxing authority will want money up front for tax certificates.

Because the investor does not own the property until after the redemption period has passed and foreclosure has been completed, the investor will be unable to obtain mortgage financing. Note, however, that tax certificates can and are routinely bought and sold after the auction. This is perfectly legal and allows investors to cash in their investments ahead of schedule.

Although full of opportunities, the tax sales market is also full of potential losses. There are many reasons why property taxes go unpaid and must be sold.

In many cases, the property is in need of repair. The current owner may have calculated that it would be better to simply walk away from the property, rather than spending the money to make necessary repairs or improvements.

This is especially the case with industrial properties with toxic waste, a big risk in today's market. Avoid such toxic waste properties at all cost. Even though you are not responsible for the pollution, you will be required to clean up the waste. That is the law, which is why everyone in the real estate industry avoids properties that ever handled chemicals or possible toxic ingredients.

You will also find that most tax foreclosure properties tend to be in the poorer and often least marketable areas of town. Thus, the potential for immediate gain with these properties tend to be minimal.

If you are serious about using this approach to obtain investment properties, we strongly recommend that you review the in-depth "Creative Real Estate Investment Guide" in the "Real Estate Investing" section

Real Estate Planning And Prosperity

Real Estate Planning And Prosperity

Entrepreneurs go against the flow. You've a business idea. Lots of individuals have business themes. The difference is that you, the entrepreneur, take action. Realty investors are the same.

Get My Free Ebook


Post a comment