subject: A Tax Lien Loophole You Must Know To Maximize Your Real Estate Profits [print this page] If you are investing in tax liens or deeds, you need to be working overages as well. Due to a tax deed/tax lien loophole that few people know about, there's a window of opportunity to make a lot more money from tax foreclosure properties - and if you're sick of owning property, you're going to love it. There's no property ownership required.
So what is this tax lien loophole? When more is bid at tax sale than is owed in back taxes, both in lien and deed states, generally the money is held for the former owner to collect. Since there can be a long delay between when someone stops paying taxes and when their home ends up at tax sale, they have frequently moved on, or died, or never lived in the home in the first place, and thus are never notified of the overage. In the case of heirs, they're even more clueless.
The tax lien loophole secret here is that these funds are not subject to finder's fee caps (in most cases). By the letter of the law, these funds fall outside of the state's control. That means that tax lien investors or other money finders can charge 30-50% legally on these funds for their information and assistance in collecting the funds.
This is huge. Without this tax lien loophole, the finder's fee would be capped out at, at most, 15%. These real estate created overage funds often run into the tens of thousands of dollars, so even at 15% you could make a tidy sum - but at 40-50%, you're looking at five-figure finder's fees for overages created at tax sale - or mortgage foreclosure sale.
If the rightful owners don't claim the funds quickly, they escheat to the agency holding them. In the current economy, this amounts to billions of dollar private citizens will lose if not alerted to the presence of the funds. You'd be surprised how grateful owners are. 30-50% of a big overage is still a windfall for these people, and they understand the value of your services.
