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Tax Certificates Anyone?

Tax Certificates Anyone? By Bill Roberts

I've been toying with the idea of investing in Tax Certificates with my self-directed IRA.

In case you don't know what a Tax Certificate is, the short answer is a lien on real estate for unpaid taxes. The County Tax Collector in certain states is able to "speed up" the collection of taxes by "selling" his lien against your real estate to any investor who will pony up the over-due taxes. This lien is generally referred to as Tax Certificate.

Very High Yields

Tax Certificates yield a high interest rate or penalties to make them attractive to investors and to provide an incentive for the property owner to pay his taxes on time.

Tax Certificates also have the potential to become an actual deed to the property if the owner fails to "redeem" their property in a timely manner.

Every jurisdiction has different "rules" for redemption, but one thing is constant: the holder of the Tax Certificate has the potential of becoming the actual owner if the non-paying owner doesn't pay up. This probably only happens in a very small percentage of the cases, but even one in a hundred provides a good return on investment for the buyer of Tax Certificates.

Hit The Lottery

An intelligent approach to investing in Tax Certificates can and will produce yields up to fifty percent per annum, along with the chance to "hit the lottery" by obtaining the actual deed for as little as 5¢ on the dollar.

Because the yields are so good I advise investing in Tax Certificates with a Self-Directed ROTH IRA, you can honestly and effectively build an IRA account balance in excess of one million dollars ($1,000,000.00) in as little as ten years. This is particularly attractive to Baby Boomers who haven't adequately prepared for their imminent retirement.

If you would like assistance in setting up your Self-Directed IRA and/or investing in Tax Certificates call Bill Roberts (619) 244-4610.

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Posted by Bill Roberts - "Baby Boomer" Retirement Planning on 12/08/2007 01:10 PM

Comments (8)

bill roberts real estate, ira, selfdirected ira, roth ira, tax certificates, invest in real estate

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8 Comments on Tax Certificates Anyone?

DEC

2007

Bill

There are lots of ways to participate in the real estate market other than direct ownership that we agents typically think about....., Buy the stock of homebuilders, discounted mortgage notes, REITs, TICs , mortages, and of course tax certificates.....Thanks for the reminder

Ron, I'm not a fan of investing in stocks, even real estate related stocks, so homebuilders and REITs don't interest me, but all the rest does. You didn't mention options!

Bill Roberts

Bill-Go for it! Some states are have higher interest than others. It is a great business. In Florida it is done through bids and there are companies that that is all they do, it is a business, so it is hard for the small fellow to get any bids through. Katerina

DEC

2007

Katerina, In almost all states it is done by bid. But if nobody bids then the certificate is available "over the counter" for the "face value" or just the unpaid taxes. Thanks for contributing.

Bill Roberts