How To Buy Tax Lien Certificates In California - YouTube

Welcome back.

I'm Ted Thomas and in this episode, how to buy tax lien certificates in California and

I'm going to give you tips on how to make money on those certificates when you do buy

them and we're going to talk at the very end of this video on how to avoid mistakes at

the auction.

There's 2 key mistakes that you want to want to miss and if you don't, you could really

lose a lot of money, and that means you lose your assets.

So, stay tuned and I'll come right back.

Okay, how to buy tax lien certificates in California?

You can't do that, folks.

They only sell tax deeds, that means they sell tax defaulted properties.

So, stay with me.

This is a really meaty, meaty lesson and there's a ton of stuff to learn.

So, you already know there's 50 states.

There's over 3,000 counties, another 1,400 municipalities, they're all taxing districts.

In California, they have 58 counties.

They do not sell tax lien certificates.

Every county, I happen to know because I lived there for 35 years, is authorized to do that

however the treasurers don't want to sell tax lien certificates.

And you'll see some of the reasons for that here in just a minute.

I don't know if the reasons are to benefit you but the taxes that they are trying to

recover are tax deeds so, we're going to talk about them.

Alright, so here's how it all takes place.

First of all, if people don't pay the tax, the local county will put them into default.

Now, California's a liberal state.

They allow things that no other state allows.

For example, California should seize the property and sell it but they issue the tax default

and then they go 5 more years before they do anything about it.

So, each year they tell a property owner, "You're in default.

1 year, 2 years, 3 years..."

Some of the properties end up 7 years in default, they have not contributed anything to the

state coffers and now they're finally going to get to the auction.

Okay, I don't make the rules, I'm just here explaining how to do it.

So, I'm just an educator, I'm not an attorney, I'm not a politician.

I'm just a person that's got a little bit of street-smarts that's learned this in California

and I'm going to tell you guys exactly how to do it.

Alright now, these properties are going to come to auction and it's going to take a long

time before they get there so they're building up a ton of debt against the property.

So, if you can buy one of these properties, it's gonna have anywhere from 5 to 7 years

of back taxes due on the property.

Alright now, these auctions can be offline and they can be online.

Now, they can be small sales, they can be big sales.

But let's make sure we understand this.

so, if this is the first time you've tuned in to one of my lessons, I'll tell you this

about taxes.

Every property in the United States has to pay property tax.

Half of the states have tax lien certificates, that means they sell a certificate which pays

16 or 18, 24, up to 36%.

The other half of the states like California, they have the right to seize the property.

So, they put the property on default then they send notices that's called due process.

They go through the due process for 5 long years before they do anything about it.

So, the tax auctions are very lucrative ways to buy property.

You can buy property for 10 cents, 20 cents, 30 cents on the dollar.

But all properties, whether tax lien certificates or tax deeds, the mortgage is wiped out.

Now, I don't mean to say that they go out and they rip out the mortgage.

They don't do that.

What the county does is they wipe the mortgage off the property records.

So, that means when you buy, you do not have a tax or a mortgage to pay.

So, there's no mortgage to pay.

In California, they don't even call it a mortgage.

They call it a trust deed.

So, the trust deed is the same kind of promissory note that a mortgage would be in New York

or a contract to sale would be in the middle part of the country.

It's the same promissory note, however, it has different terms to it.

So, the point is what is the county going to do?

They're going to wipe that off the property record before you buy.

So, when you buy a property for 10 or 20 cents on the dollar, it will not have a mortgage

on it.

So, that's a huge advantage to you.

Now, do they do all the auctions online or offline?

They both.

Sometimes they do both at the same time.

Like they could be selling online, at the same time they could be selling in the room.

It's up to them.

Who decides?

The treasurer.

The treasurer's the most powerful person in government.

Put that in the back of your mind.

Most powerful person in the government.

Now, I've been teaching this online and offline for well over 5 years.

So, I have clients in Canada, I have in the U.K., I have them all over Asia, I have them

in Mexico, you get the idea.

So, we're teaching people how to do this online.

All right, so now you got the basics of tax liens, basics of tax deeds.

California is a tax deed entity.

So, that means they're going to sell property, and when they sell it, you're going to get

a mortgage-free property and you're going to own it.

It's going to be a tax defaulted property or what you call a tax deed.

Now, there's all different size counties in California as you know.

There's 58 counties, round number, there's 40 million people there where they got a lot

of property, all right.

Now, a little county like Marin county that's really wealthy, just north of the Golden Gate,

they might have 100 properties to sell.

That would be a real high number for a place like Marin.

However if you go to Los Angeles county, probably the 5th wealthiest city in the United States,

they'll have anywhere from 1,500 to 3,000 properties that they try to auction in 1 day.

Now, I cannot snap my fingers fast enough to tell you how fast the auction goes.

I've been to that auction at least 5 times and the properties go so fast that you can

snap your finger and another property is gone.

All right, now those auctions, you need to know what you're doing.

You don't want to go to that auction unless you have seen the property.

That auction in Los Angeles, they would charge $5,000 before they will give you a bidders

card.

Now, you get your 5,000 back if you don't bid, but the point is they're trying to restrict

the auction so they'll charge 5,000.

All right, they will sell properties at those auctions and they'll sell them fast.

If they don't get them all sold, sometimes they'll conduct a subsequent or a 2nd day

auction and they'll cut the pricing in half.

Now, there are auctions in California starting now, 2021, where they'll actually lower the

price to $100 with no mortgage.

Now, you'll need to do your homework to do this and we don't have time in this video

to go through every step.

So, let's do a little bit of a review.

So, this lesson was about how to buy tax liens in California.

Well, it's really not a lesson, it was an answer to a question.

All right, don't worry about tax liens because they're not going to have them.

The owner has plenty of time to pay taxes in California.

There's many people that buy, never pay taxes and sell before they have to pay taxes.

That doesn't mean that the property didn't accumulate tax.

All right, there's 40 million people, 58 counties, so you can look at all of those counties.

The small little places like Maricopa, something like that, you're going to find out there's

not a lot.

There's maybe 50 or 75.

A place like San Bernadino county, which is the biggest county in the world, that one

county alone will have as many as 3,000 tax defaulted properties.

Los Angeles can have as many as 1,500 or 2,000.

All right, they sell online and offline, we'll teach you both ways, okay.

Now, don't forget, you got to avoid the mistakes.

All right now, to avoid the mistakes, don't buy a property based on a picture.

If you're going to do anything, make sure you use the GIS mapping system, okay.

That's the geographical information system.

We teach that.

It's much better than Google.

There's a satellite that's aloft and they have pictures of properties.

All right, the point is you need to learn about the first auction, they'll be a 2nd

auction where they'll drop the price.

Sometimes they'll drop the price all the way down to $100 dollars.

So, that's about all the time I have today so to you folks that aren't clients of mine,

you want to be part of my community, I'm going to tell you how to do that and then I'm going

to come back and answer a couple of questions.

So, number 1, if you're learning a lot from what I'm talking about and you want to be

part of the community, well here's what you do.

Right below me, you can register, be part of the community and I'll have a gift for

you if you register and hat gift is a mini-course.

It's a fast start course that will teach you about tax liens and tax deeds and do the whole

thing online in about an hour.

So, all you have to do is go below me and do that.

But before I go, I have a couple of serious questions.

Okay the question is exit strategies.

Okay well, there's a lot of those.

So, the first thing I would start out with is figure out, number 1, what the value is

that you're willing to pay for the property, then figure out what you're going to do with

it.

All right, you're probably going to sell it.

And if you're going to hold it, that's not an exit strategy.

That means you're just going to hold it.

But if you're going to have an exit strategy, you're going to have to say, "What can I sell

it for?"

That's going to require researching on Google, probably MLS, go to the county tax center,

know what the value is.

That's 1 exit strategy.

I can go through, I have a dozen of those but I don't have time today.

Okay, so let me give you a couple of ideas here that are very important to you and I

told you I'll put these at the end of the video and here's the important thing.

Don't buy any property unless you've seen it.

Now, if you haven't hired someone to go look at it and you haven't had boots on the ground,

do not buy that property.

Yes, we have plenty of ways to teach you to do that.

There's companies that'll go look at it.

You don't want to buy a property that you haven't looked at.

Why?

What if there's a hurricane?

What if there's an earthquake?

What if it wasn't there?

It could happen, and it does happen.

Okay, so that's my number 1 rule.

Number 2, don't buy a property unless you have an exit strategy.

And that means you know what you're selling for.

If you don't know what you're going to sell it for, don't start bidding because if it's

an online auction, I will assure you there will be someone that wants to outbid you and

you're just going to keep running the bid up and you might get right past the price

you could even sell it and you won't make any money.

All right so, I'm Ted Thomas.

If you want more information, just go below me and get that mini-course and I'll see you

in the next video.