Winning Bid Strategy – From Tax Revenue Lady
Recently I went to New Jersey for tax sale. It is a small tax sale in a small rural municipality. With only 7 properties in the tax sale, I was able to get 10 and 12% 2 liens. This is good in New Jersey today's competitive tax environment. Often in such a tax sale I leave empty-handed because I do not want to pay a small tax-deductible premium
Most of the liens sold in this (except one) are less than $ 600. In some states, the local government sells the utility tax at the same time as the tax sale rights. Any payment to the local municipality may be sold as a tax lien in these tax sales. The majority of these liens are for water or sewer defaults. There is only one lien including taxes and the amount of water that is owed, just over $ 1,700. All others are water or sewer or both.
Trends over the past few years in New Jersey have been tender premiums for these small utility liens. Investors are willing to pay a premium for these liens to cover subsequent taxes. But for small utility companies, you usually can not pay the subsequent taxes, but only pay the subsequent sewage pipes or water, much less than the tax amount. Remember, in New Jersey, the interest on the lien is first reduced to 0%, then the premium. Although you can get your premium if the lien is redeemed within 5 years, you will not be charged interest on the premium amount or the lien amount. You will incur a slight penalty for the amount of lien and the legal interest rate (18% if the taxpayer is a $ 1,500 penalty).
Some tax-lien funds are willing to pay to get these small utility liens already a bit inconvenient. Over the past year, I have seen them pay a premium of up to $ 1,500 and get a small $ 200 or $ 300 lien.
Well, how can I buy at the last tax sale at a reasonable interest rate? It's really worth it. 2 small liens? First, I went to a small sale, with only 15 liens on the original tax list and only 7 properties on the list. Second, there is no real lien on this sale; the biggest is less than $ 2,000. Big liens bring all the competition
Third, you have to know when to stop the bidding. I am actually lucky in this sale because only one other bidders represent a tax lien investment fund company. I ran for every lien except one, but I did not call him down too far.
The fourth thing is that I am happy to be able to get the result: the sale of bread crumbs. What I mean is that the two attributes I left behind were the worst attributes in the sale. One is bank ownership and falling apart. It has not been taken care of for several years. You can see its picture on the cover of this question. You can not see it from the picture, but it also has garbage piled up in the driveway and the back yard, a shabby, falling shed behind it. The other house is empty and will be rejected by the bank.
If I decide not to bid on these properties because of their condition, I will miss the good liens as well as the couples that I am able to get only The only lien. You must be willing to take what the big boys do not want or be willing to give up. These properties may be empty and terrible shapes, but they are still good liens. Banks will at some point redeem them, but probably not until they sell, which may take a long, long time. This will give me time to pay for the subsequent utility payments (remember these are small utility bills that increase my investment and more interest