The idea of becoming a wealthy real estate investor strikes each one of us. Hypothetically, merely selling a property for more than you buy it can make this idea a reality. However, one needs to do extensive homework and in depth research before stepping out into the world of real estate.
I can ensure you that real estate investment is not likely to generate get-rich-quick results, but for investors willing to get their hands dirty the rewards can be generous. In today's world the plethora of books and websites on how to become wealthy in real estate investing confuses people looking for help and information on how to get there. Many of them promise a lot but deliver little and it is extremely crucial to do extensive homework and in depth research before setting out in the investment world. Real estate investing is no longer limited to the rich and famous, people from all walks of life own rental properties and are becoming rich doing so.
Find a Mentor
To become prosperous and successful in any field requires dedication and perseverance. It takes years to build an in depth knowledge in investing, personal finance, management and team building. For a novice just starting off, finding a mentor is the smartest thing to do. Besides, being an invaluable asset as a friend and counselor, a mentor can help one avoid potholes and be aware of blind spots we otherwise would not have seen. While mentors or coaches can be found in various fields for a fee, it is vitally important that your mentor is actively involved in their field, and truly wants you to succeed.
A mentor is someone who has already done what you have set out to do. Your mentor will be an authority in his field and more importantly should be willing to spend his time and effort in coaching you. He should be willing to share his experiences and wisdom with you. Professional baseball, basketball players, athletes have trainers and coaches, managers have leadership coaches, and similarly in my opinion as a budding entrepreneur having a mentor helps steer one down the right path.
Unfortunately, finding a true mentor is not easy, and I think networking is probably the best way to find someone you can have confidence in. So join an investment club or talk to family members, friends. Those that keep their eyes open will eventually find someone who not only shares their passion for the field but also is interested in spending time with you, who is just starting out. Before taking the leap and confiding in your mentor always make sure you both are on the same page and he is the right one for you.
Liens Overview
I would also like to bring to your attention the issue of liens and lien property. Anyone who is involved in real estate sooner or later must deal with this issue. Regardless of whether you are a buyer, seller, lender, investor, or broker of real estate you will have to face the question of liens and lien priority.
There are two categories of liens: Voluntary and Involuntary
Voluntary Liens are placed against a property or individual because the owner voluntarily pledged the real or personal property as consideration for a mortgage or for another obligation.
Involuntary Liens :%$amp; Judgments known as Adverse filings are placed against the property or individual when a borrower defaults on an obligation to pay a lender or governmental entity or because the party lost a lawsuit and the Plaintiff is giving notice to the public. Examples of automatically attaching or 'statutory' liens are property taxes, estate taxes, municipal district charges, hospital district taxes, unpaid home owner association dues, etc
Before, a property can be sold, liens need to be paid off. Lien is sometimes also called an 'encumbrance' because it encumbers the owner's interest in the property.
A property can be put up for foreclosure (for sale), if a lien is placed on a property and one fail's to pay the debt or obligation. Let me also tell you, that at the foreclosure of a superior lien all lesser liens are terminated. I would strongly recommend that you use your attorney or an experienced title researcher before doing any research yourself.
I know this may sound like a lot of work and information and may discourage you but keep in mind there is no such thing as 'get rich quick'. However, there is such a thing as a validly run business which uses the law, adequate research techniques and a team of experienced personnel to earn a considerable profit year after year. So, lets get started to help you and your entity (remember you must form one at ) generate cash flow and amazing profits.
Investing in Tax Lien
I believe the best way to start off in real estate investing is to start small and then while gaining experience increase the amount of investment. One way to do this is by purchasing tax liens from county and municipal governments which can easily provide one with extremely high rates of return ranging from 12% to 100% or more per year. The key to be successful though is solid and thorough research. In simple terms, when a property owner is late on paying real property taxes, the county or municipality will issue a a tax lien on that person's property. Certain states allow the tax lien to become a first lien on the property, which is then turned around and sold at auctions as a tax lien certificate. After placing a successful bid, the buyer will get a state-mandated yield from the lien, which the delinquent taxpayer must pay in order to release the lien, or title to the property if the delinquent taxpayer fails to pay up.
Although the process is very simple, one has to have a well charted plan of action. However, what many tax lien buyers find out is that, if they did not do proper title and bankruptcy research, their tax liens can become worthless. Before one begins to bid at the auction there is a lot of information that needs to be gathered and compiled.
Real Estate Investment sites like offer tools and resources that can make the life of an investor much easier. One glance at the software is enough to structure an effective strategy to best suit ones needs and portfolio. RI Tracker helps the investor organize, conduct research, get comparative market analysis and much more.
Tax Liens - Typical Bidding Process
1.Most States Property Tax Code provides that persons with delinquent taxes owed to taxing jurisdictions of the county may not receive a deed for property purchased through County Tax Foreclosure or Tax Seizure Sales.
2.Prior to sale date contact the County Tax Office to request a "Bidders Eligibility Certificate" which will be required by the officer conducting the sale before a deed may be processed for any successful bid. Form is available at the link below:
3.Show up at the north steps of the County Court House a little before 10:00 am on the date of the sale.
4.Once you get there you may be required to fill out a small informational sheet.
5.A Deputy will conduct the sale by announcing each property and giving bidders adequate time to bid.
6.If you win a property on the auction, different counties give have different payment terms. Some need on the spot payment while some may give up to 24 hours to make the payment.
Note:
bidders must be present at the time of the sale.
all properties will be subject to taxes that have accrued since seizure.
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