What Is A Tax Lien On A House - YouTube

Welcome back, I'm Ted Thomas.

You're really gonna learn a lot on this one.

This episode is going be all about "what is a tax lien on a house?"

So, I'm going to explain that in depth.

I'll go through it one step at a time.

So, hang in there.

But, I'm gonna do other things.

I'll talk to you a little bit about how to make money with tax lien certificates and

I'll also talk to you about what mistakes to avoid.

I'll be right back.

What is a tax lien in a house?

So, let's go through this step by step.

If their local government cannot collect the taxes that a property owner owes, what they're

going to do is they're gonna take some action.

They don't mess around when it comes to taxes because they have a lot of bills to pay.

So, I'll explain both.

First, we'll talk about the tax lien and then we'll talk about the local government.

They mix together perfectly.

And here's what happens, the local government didn't collect their local taxes.

That means the property taxes have not been paid.

So, now that the local government will take action, and they will issue a piece of paper.

A piece of paper that looks about that size.

It's a tax lien certificate.

It will just say tax lien on it.

And, they want to sell it.

So, what they'll do is they'll advertise on the paper, they'll advertise it online, they'll

put it on a website and you can look.

And they'll have all the properties on there.

Now, they might not have pictures and they might not even have addresses, but they'll

put all those properties because they'll put a property ID number.

Every property has an ID number.

So, you need to choose the ID number of the property you want.

And you can go online, you can look it up and see what it is.

Sometimes it's a picture, sometimes there isn't.

But, now you know what you're gonna buy.

So, they might say it's a 3 bedroom, 2 bath and you're gonna pay the tax on that.

All right so, the government puts the tax liens up for sale.

Anybody can buy them.

Now, some of them are 50 bucks.

Some of them are 1000, some of them are 20,000.

It depends upon whatever the tax was on that house.

So, the government's selling that, you are buying.

Now, why did the government sell?

Simple.

The government needs money.

The government doesn't manufacture money, they actually take your money.

So, what you're gonna have to do is you buy the tax certificate, now the government can

pay their bills.

So, your proof that you bought that tax certificate is they're gonna hand you this piece of paper.

It's all you're gonna get.

But, that paper gives you power.

You now control the property.

I said you control the property.

It can't be sold, it can't be mortgaged, nothing can happen on that property until you get paid.

Now, that's the advantage in tax certificates.

It's you have a guarantee that you're gonna get paid.

Now, how are you gonna get paid?

Well, some states will pay you 16, 18, 20, even up to 36 percent.

Keep in mind the government's always getting their money, they're not gonna miss.

Okay, so what they did is that they get paid by you, and you have the tax certificate so,

the government's happy at this point.

Now, what you're doing is you're waiting.

You're sitting on your rusty-dusty just like I'm doing now, not doing any work, passive

investment, you did it online, what could be easier, right?

So, let's use Florida for example.

1 year goes by, so that means at the end of 1 year, they owe you whatever you paid plus

up to 18 percent.

And 2nd year, they're still gonna owe you 18 percent if you buy the tax certificate

on the 2nd year.

Now, you've got up to 36 percent that they owe you.

Now, it can't go any longer than 2 years in Florida.

All right so, you kind of get the tax lien certificate part.

All right now, what about the government?

What's the government doing here?

So, the local government has to first of all, worry about paying the police.

Now, we couldn't do without the police.

So, they're gonna pay the police department and the sheriff.

They're also gonna make sure that the fire fighters are paid.

And what about the school teachers?

The only way they're gonna get paid is from the local government so, they get paid.

And then someone's gonna maintain the buildings for them to work in.

So, you're getting the idea of it.

The local government has a lot of bills to pay.

They give some money to the hospital to help them, they fix the roads, you get the idea,

the court system.

All has to be paid for with tax money.

So, the local government issued a certificate, you bought the certificate.

Now, the government's happy because they have money.

All right, you have the certificate, you're either gonna get paid on that certificate

or you're gonna own the property.

So, what does that mean to you?

That means you just got a property without a mortgage.

Without a mortgage.

The mortgage is gone because it's wiped out by an act of law.

I can't wipe out a mortgage, neither can you.

But, the law says if a property goes to tax auction, the mortgage is wiped out.

So, what did you pay for the property?

You paid 2 years of taxes.

So, if it was 2000 the 1st year and 2000 the 2nd year, you have 4000 dollars invested and

you own a 100 thousand dollar house.

Or you might have 40,000 dollars invested and you own a million dollar property.

It's whatever you paid in taxes on a tax lien.

If they don't pay it, you're gonna get paid.

Now, how long has this all been going on?

This has been going on for 200 years.

But, 99 percent of America does not know what we're talking about.

It's not my fault, I didn't stop that.

But, the reason the system is upside down and people don't know about it is because

the county only talks about this within their own county.

For example, I just put a property up in Orange County, Florida about 100 miles from New York

City.

I bought a property at auction.

All the other counties, which there's 62 of in New York, nobody knew the property was

for sale.

As a matter of fact, 8 million people in the city of New York didn't know it was for sale.

Because they only told people in that county it was available.

So, I have a data base of every county and every property in the United States.

I can show you online on your computer every property in the United States.

There's 100 million of them.

I can tell you if there's a mortgage on it, I can tell you the value of it.

I can tell how many bedrooms, I can tell you what color it is, I can tell you what street

it's on, I can tell you about every neighbor.

Because we've built systems so that you could know where the property were, and if you want

tax liens that's a predictable, certain and secure investment.

Pretty tough to lose your money if you give it to the government and they give you a check

back.

Whereas tax deeds, that's not quite so predictable because you're buying an actual property,

and you better buy it right, so you better look at it and you better make sure the mortgage

disappears because it's your property.

When the gavel comes down, you own the property.

So, there's a big difference between tax lien certificates and tax deeds.

Now, you're worried about mortgages.

Don't worry about the mortgage.

It's gonna be wiped out.

You're worried about IRS liens, don't worry about it.

They're junior liens on property.

I don't care how many properties have IRS liens, if you don't want them, call me because

I want to buy them.

Why?

Because everybody else is scared of the IRS.

We don't have to be scared of the IRS.

They are way down the pecking order when it comes to getting paid on a property.

They know that but they leave the liens on it.

So, the point is this is a business where you can make money.

If you just stay tuned for a while, you're gonna learn in these videos a lot.

So, if you want to buy this in your IRA or your pension plan, or you want to start a

new LLC, my recommendation is go ahead and do that.

When you incorporate with an LLC or you do it in your IRA, you want to really make sure

you're doing it right so, practice on a couple of little deals.

Then go ahead and buy them in LLC or put them in your pension plan.

I have people that are now millionaires in their pension plan because they didn't pay

taxes all this time.

As a matter of fact, the first question the county will ask you, they'll say, "How do

you want to title it?" and if you have an IRA, use your IRA money.

If you have a Roth IRA, definitely use a Roth IRA because you won't have to pay taxes for

the rest of your life.

If you buy a tax property, you won the property.

So, the day you own it, what they're gonna do is they're gonna say, "We'll send you a deed."

That means it's been transferred.

A deed is a transferred device from one entity to another entity.

So, you now own it.

So, you want to put a mortgage on it?

Get out of the bank.

If it's praise for 200 thousand, who knows it might give you 80 percent.

You can go to another auction and buy another one.

The point is yes, you can borrow one of these properties after you own it.

But, you have to have a deed.

Now, a deed has to be recorded so the county records recognize that.

No lender will lend you or give you money if the county records are upside down.

Can I teach you everything I know in 1 video?

Impossible.

But, I'm gonna do you a favor.

How about if I give you something?

How about if I give you a 1 hour video.

I'm gonna call it a quick start video.

When I finish, just go below me when I finish and there'll be a link and you can go right

to that video.

But first I need to tell you 2 mistakes I don't want you to make.

Mistake number 1, don't buy a tax lien or a tax deed property unless you've seen the property.

Ladies, you know better.

You wouldn't marry the guy without seeing him.

Don't buy a tax lien or a tax deed without checking the property out.

2nd big problem, people get into bidding wars.

Everybody goes in and they want to be macho man at the auction.

They want to win.

If you win the auction, it's probably a problem.

Because that means you bid up too high.

You don't want to bid high, you want to be the low bidder.

You've got to steal a property.

I said legally, honorably and ethically steal the property.

Get it as cheap as you can without a mortgage, and then sell it as cheap as you can to make

a profit and get to the bank.

There's so many properties, there's an abundance of properties.

They will never run out of tax defaults and tax liens.

They haven't in 200 years so why would they run out now?

If you know anyone that's interested in tax lien certificates or tax defaulted property,

it's okay with me, go ahead and share this video.

Share it with all your friends.

This is free.

You can get a free video, we'll give your friend a video if they'll just go to the link below.

My name is Ted Thomas.

I'll see you in the next episode.