Hey there, this is Mike Wolf again from Mike Wolf Mastery. Today, I’m coming to you from Stockholm, Sweden. I want to talk to you about something called tax liens, and deeds. If you’re a real estate investor, this is one of the strategies that you need to learn because it creates a fantastic opportunity. Firstly, what are liens and deeds? Well, those are two different strategies, two different ways that the governments utilize to deal with delinquent taxpayers.
We’re talking about property taxes. When somebody doesn’t pay their property taxes for a certain amount of time, and that will vary from county to county, the government will deal with it in one of these two ways. One of the two ways is by creating a lien. What a lien means is that basically, you’re investing by buying that delinquent amount of money owed by the homeowner.
For example, if somebody owns a home and their property taxes are $1,000 a year, the end of the year comes, they don’t pay their $1,000. They’re going to get something in the mail saying, as an example, “If you don’t pay it by such and such a date, you’re going to put a 10% penalty on it.” Instead of only a thousand, they’re going to owe $1,100. As an investor, I can buy that $1,000-note and when the taxpayer finally goes and pays the county their $1,100, that $1,100 goes to me and I made $100 on my thousand.
That’s one example, but the thing that you need to know is that you’re not buying a property. You’re buying a piece of paper that basically says that you’re going to get a certain amount of interest where you’re going to collect a penalty that the homeowner has to pay when they catch up on their taxes. The exception to this is there’s something called redemption period. Eventually, if the homeowner doesn’t pay, you’re in a position where you might be able to foreclose to get that property, but this happens occasionally.
The other thing that they might do is create what’s called a deed. When you’re buying a deed, you’re actually buying a piece of real estate. You’re buying a property. Now, the beauty is that the counties are not in the real estate business. They’re not there to make a profit on the real estate.
They just want to get the money that’s owed to them because they use this money to keep the schools open, to keep their police department, their fire department going, and their hospitals. They need that taxpayer money to keep all this stuff going. When they put these homes up for auction, you have an opportunity pretty often to get them well below market value.
However, you need to be cautious about this because a lot of things can still go wrong. There’s a lot of potential pitfalls, and when you buy these properties, you’re not getting a guarantee. It’s not like when you go and buy something on the MLS where you’re guaranteed their titles. So many pitfalls. Back in the days, I used to do courses on this and teach it very regularly, usually, two or three times a year.
Make sure you click and check it out if this is something that you want to do because it will sell out. I only do very small groups, and it will sell out quickly. If you enjoyed this, make sure you like the video, share it with anybody who might benefit from it and subscribe to my YouTube Channel. I look forward to seeing you soon.
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