This is a great way to get a rapid return on and of your investment.
Merrit Island, FL (PRWEB) April 30, 2013
The recent surge in tax deed investment has brought a lot of people into this market, but many of them do not understand the before and after-the-sale responsibilities they need to take care of. The TedThomas.com website has now released a complimentary tax certificates for real estate video series online.
“You need to do your research on the property,” said investment expert Ted Thomas. “The tax deed you buy is specific and only covers that tax-collecting entity. There may be more liens, debts and paperwork you need to address.”
Step one is making sure there are no other taxes owed. Mr. Thomas explained a city tax sale may not cover any past due county or parish taxes. This may also not cover any state taxes. The reverse also applies.
“You really should do this before you invest in a tax deed, but a lot of people don’t. It is never a good idea to buy a tax defaulted property before checking the details,” Mr. Thomas said.
Another issue is current taxes owed.
“Past due taxes are what is sold. When you pay the overdue taxes, you may be presented a bill for the current taxes. This is fairly common, so be prepared to pay more than you expected in order to cover the current taxes,” he said. “This is yet another reason why it’s a good idea to check before buying.”
If the tax deed conveys title to the property, get insurance. Mr. Thomas said insurance protects an investor from liability claims, such as when someone falls and is hurt on the property. He explained the tax deed property has the same liabilities as a home and needs to be protected the same way.
Once the deed is in hand, start the title process. In most cases, this takes 30 days or more. The process in many states is similar to a bank foreclosure.
“Hire an attorney to handle this. In addition to being familiar with that state’s tax lien laws, the attorney will do a title search and can help clear up any outstanding issues linked to the property. Sometimes a title service can do the same thing,” Mr. Thomas said. “Yes, this is going to cost a little bit, but the cost should be minor compared to what you have already invested.”
With a clear title and full access rights to the property, go and secure it. Make sure no one is living there or using the property. Mr. Thomas said before setting foot on the property to do this, notify local law enforcement and show them the clear title.
“Since it is unlikely you received keys, you may have to break in. This is yet another reason you need to tell local law enforcement what you are doing,” he said. “If someone is living there, it’s best to send an eviction letter. You don’t have to evict them, but you need to make it clear you can.”
If someone is living on or using the property, the new owner can opt to rent the property or sell it to the people there.
“This is a great way to get a rapid return on and of your investment,” Mr. Thomas said. “If it is a home which was being rented, you can sell it it a sharp discount to the people living there or rent to them.”
If the property is vacant, then find out what needs to be done, if anything, to bring it up to code. Secure the home. Call a contractor and get estimates on what it will take to return the home to a habitable dwelling.
Ted Thomas is America's Tax Lien Certificate & Tax Deed Authority. Thousands of men and women have been personally educated by Ted on their quest to become better real estate investors. Mr. Thomas offers a series of instructional videos for tax lien certificate and tax deed investing on his must-see video, “Truth About Tax Liens Certificate” at his website TedThomas.com. The website even offers a series of free videos which don’t require an email to access. The complete list of videos covers tax sales in all 50 states.