What Is A Tax Lien?
A tax lien is essentially back taxes that are owed on a property – taxes that are owed to the state government.
A homeowner has a lot of different expenses while managing their property. There could be:
– HOA fees
– Mortgage payments
– Property taxes
… just to name a few.
But what happens when property taxes aren’t paid?
This is when a tax lien is created. Now, that homeowner owes back taxes to the government. And there will likely be additional penalty fees as well because those tax payments were not paid on time.
What Happens When The Homeowner Isn’t Able To Pay Off Their Tax Lien?
In that case, both the national and state governments want their money sooner rather than later, so they will often sell those tax liens to investors.
And this is where you come in with your NuView self-directed IRA.
How Do Tax Liens Work?
You can actually purchase these tax liens at auction, and you (your IRA) will now be the recipient of those payments on the back taxes.
Now, tax liens are relatively cool as well because they also come with built-in collateral. Meaning, if that homeowner does not pay off the property taxes in the allotted time – because there is an expiration date – you can foreclose on that property.
Property taxes might only be a month or two passed due. And in that case the due amount might only be $500 to $2,000 [prices may vary]. This allows you as the investor to purchase that tax lien with only a small amount of money.
In a worst-case-scenario, if that homeowner is not able to pay off those owed taxes in the allotted time, your IRA could foreclose on the property and now be an owner of that property as well. Just think of that trade-off.
Now, of course, we are not in the business of trying to take peoples’ homes or try to be any type of predatory investor!
But what’s cool about tax liens is – like we mentioned earlier – the US government wants their money. Some money now is always better than none.
So when they sell those tax liens at auction, they will often be sold at a discount. Remember, they will likely be other buyers, so don’t get caught off-guard by a bidding war!
Are Tax Liens A Safe Investment?
You can make money by purchasing tax liens the same as you would with real estate or any other alternative investment. That’s just the nature of how they’re sold at auction.
Even still, you’ve got a great opportunity to use a small amount of capital and possibly grow it into a much larger amount of capital should you or your IRA have to foreclose on that homeowner.
Now, we say that with a grain of salt, because tax liens are a relatively safe investment as people will generally pay off their property taxes first. This is because, unlike a mortgage owed to a bank, taxes are owed to the government, which is a larger priority for most people.
So while the payments to a tax lien investor are not guaranteed, they are still very likely.
Depending on the discount for a tax lien at auction, you could receive (ballpark number for example’s sake) 5 – 15% return on your money.
This makes tax liens a good opportunity for you to get your money (various investment funds including your small IRA, HSA, or ESA) working in a relatively safe investment.
Keep in mind that tax lien investments do have expiration dates. So if you do need to foreclose on that homeowner, you need to make sure that you’re ready to take action and start that process.
Want to learn more? Click here:
– https://www.nuviewtrust.com/investing-in-tax-liens-with-nuview-trust-company/
If this was helpful to you, make sure to stay connected with NuView Trust by doing the following:
– Subscribe to our YouTube channel
– Follow us on Facebook.
– Contact us directly with questions or ideas at:
IRAspecialists@nuviewtrust.com
We go live with education almost daily.
We love to provide investors the true story of what’s possible inside of an IRA.
NuView Trust
NuView IRA Processing Office, 280 S Ronald Reagan Blvd STE 200, Longwood, FL 32750
https://www.nuviewtrust.com/
Lat: 28.695340
Long: -81.346741
https://www.facebook.com/NuViewIRAInc
https://www.linkedin.com/company/nuvi/
https://www.youtube.com/user/NuViewIRA
Timestamps:
00:00 – Intro
00:40 – Overview
01:38 – How they work
02:07 – Benefits
04:31 – Recap
05:20 – Outro
source