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Tax Lien Foreclosures Are a Great opportunity for Cheap Land!
Tax Lien Foreclosures are a little known method to acquire properties for as little as 5-10% of the true market value of a property.
In the US, every year hundreds of thousands of property owners do not pay their Real Estate property taxes on time. As a result in 18 states there are laws allowing the Counties to do so called “tax Lien Auctions” and auction off the Delinquent Tax obligations to investors in exchange for them receiving several rights.
Right #1: the right to collect a (usually high) Interest rate:
In many states these interest rates are 16% and higher and (in Illinois they are 18% per half a year for a total of 36% per annum). Usually the rates are between 12% and 36% with some exceptions where instead of a rate which is prorated if the owner “redeems (= pays off the taxes), the state allows for a Penalty, meaning the property owner has to pay a fixed percentage no matter if they redeem the property in 1 day or 11 months and 30 days. more…