ABOUT TAX DEED INVESTING

ABOUT TAX DEED INVESTING

Tax deeds (tax liens) are financial instruments usually issued at the county level. They are relatively short-term investments created to help local governments cover immediate expenses such as hospitals and schools. When you invest in tax deeds, you’re helping the county close its budget gaps and continue operations. Here’s how it works.

The county relies on property taxes to fund day-to-day operations. When a property owner doesn’t pay their taxes, the county doesn’t have that money available. However, when taxes aren’t paid the county can place a lien on that property. The lien gives the county a claim on that property until all delinquent taxes (and interest) have been repaid. If the taxes go unpaid for 3 years a property can go into foreclosure and the lien holder can take possession or resell it at auction.

Because the present tax money is more important to the county than any future value of a property sale, the county will often sell its liens to public investors at a tax deed sale (a public auction). The county gets the cash amount owed in taxes and the investor is entitled to collect the amount of the lien from the property owner.

The county allows the property owner a certain amount of time to settle the debt (or “redeem” the tax deed). If the lien is not paid in this of time, the property goes into foreclosure. When the foreclosed property is sold at auction, the new owner must pay any outstanding property tax liens to complete the sale. With very few exceptions, tax liens take priority over all other liens against a property and must be paid first. Tax lien holders are paid even before first mortgage holders.

When a municipality auctions tax liens, a certificate is issued for each lien. The details of each certificate – the address, legal description and current owner of the property, amount owed, rate of interest, and the amount of time until foreclosure can be declared – are recorded in the local property records to ensure that they are recognized as part of the public record.

2070 Radford Ct Riverdale GA

Market Value $48,000

Purchased Price $34,000

653 Hickory Ct Forest Park GA

Market Value $59,000

Purchased Price $34,000

652 Georgetown Ct Jonesboro GA

Market Value $61,000

Purchased Price $43,500

516 Hamlin Trce Riverdale GA

Market Value $62,000

Purchased Price $36,000