Business & Finance Investing & Financial Markets

Government Guaranteed Investments Paying 14% or More?

Skeptical? While you are scoffing at this headline, you could bestuffing them into your IRA, tax free! In fact, thousands of people all over the US are quietly making fortunes investing in government guaranteed, high yielding tax liens as you read this.
Forget the volatility and unpredictability of the stock market! There is simply no other field where the average person, can make 14% or more on safe, government backed investments.
In a few short months, you can be earning thousands of dollars every month! All you have to do is believe! Background Property tax revenue is the life blood of small towns and communities across the USA, representing 85% or more of county budgets.
Local Police, fire departments and schools for instance are some of the vital services that depend on this revenue source.
There are over 3,300 counties in this country that are charged with the task of authorizing and collecting this revenue.
Nationwide, property tax delinquencies vary from 5-20%.
This uncollected revenue means either services must be cut or tax rates must go higher, placing an added burden on those who do pay their taxes.
Neither choice is attractive to local politicians who are looking to be re-elected.
In order to keep the tax delinquency rate as low as possible, the police powers of the county impose harsh, even draconian measures on delinquent tax payers to persuade them to pay their real estate taxes and pay them on time.
The result is a super safe, super lucrative investment opportunity for investors with returns exceeding 100% on an annual basis in some counties! Imagine a few of those in your IRA.
Don't listen to EF Hutton on this one, the IRS says you can! Here is how the tax lien process works.
You loan the government money to replace the taxes owed by a delinquent homeowner.
You make your check out to the local government, they give you a piece of paper, the tax lien, representing the taxes owed on the piece of real estate securing that lien.
In essence, you have bought the county's position in that lien! Then they begin the collection process, not you.
The rate of interest is fixed by the State and does not vary according to interest rate or market fluctuations.
Typical rates are from 14% to over 100% on an annual basis! Initially, the amount owed is usually one or two years of real estate taxes.
This could be as low as $2-$300 in some states, or as much as $12-$25,000 in Garden City, Long Island, New York! However, rarely is the total more than 3-4% of the property's market value.
The owner has a State-mandated length of time to pay his delinquent taxes, penalties and interest.
How safe is your investment? The government guarantees that the property owner will repay your loan with interest and penalties.
If they do not, the county will use their police powers to enable you to seize the underlying property; the home, office building, or building lot securing the lien.
Not only that, it will be stripped of all liens, encumbrances and mortgages, in most cases.
You will receive the property free and clear, as long as you follow their rules.
You will have obtained the property for literally pennies on the dollar! How safe is your investment? In 97-98% of the time, the homeowner pays the taxes, penalties and interest in the allotted time and the county retires your loan with interest.
If the homeowner does not pay the delinquent taxes, the bank or mortgage holder will generally step in and pay, if there is a mortgage on the property; as they stand to lose everything if the lien is not paid off.
However, as you can see, forfeiting the property is not the norm.
It is really hard work and you must know what you are doing to be able to divine which liens are Not likely to redeem to end up with the property.
The choice is yours, you can play whichever game you wish.
Knowledge is more important than money in this game.
In fact, having more money than knowledge is dangerous to your financial health in tax liens.
You see, the good news is that if the person does not pay the delinquent taxes, you end up with the property.
The bad news is that if the person does not pay the delinquent taxes, you end up with the property! If you have not done your due diligence, inspected the property's title, physical condition, neighborhood, assessed market conditions to come up with a likely market value, you could overpay and thus get burned.
Speaking of being burned, more than one person has found the property they acquired had burned down or was scheduled for condemnation or had buried uranium tanks or other EPA problems or simply wasn't there! There may be no such property at the address on the tax bill! It could be a totally different property than the address in the records.
The liened property's legal description obtains.
Depending on your resources, time, money and willingness to learn, and travel in many cases, since each State has a different set of rules for tax liens, you may want to learn how to invest in these instruments yourself or you may want to use an agent.
But don't let anyone tell you that there is no such thing as a government guaranteed investment paying 14% or more that you can buy with your IRA or other retirement account, you now know better.


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