Profit by Investing in Real Estate Tax Liens: Earn Safe, Secured, and Fixed Returns Every Time

259 Pages·2004·15.73 MB·English

by  Larry B. Loftis

This publication is designed to provide accurate and authoritative information
in regard to the subject matter covered. It is sold with the understanding that
the publisher is not engaged in rendering legal, accounting, or other profes-
sional service. If legal advice or other expert assistance is required, the services
of a competent professional person should be sought.
Vice President and Publisher: Cynthia A. Zigmund
Acquisitions Editor: Mary B. Good
Senior Managing Editor: Jack Kiburz
Interior Design: Lucy Jenkins
Cover Design: DePinto Studios
Typesetting: Elizabeth Pitts
 2005 by Larry B. Loftis, Esq.
Published by Dearborn Trade Publishing
A Kaplan Professional Company
All rights reserved. The text of this publication, or any part thereof, may not
be reproduced in any manner whatsoever without written permission from the
publisher.
Printed in the United States of America
05 06 07 10 9 8 7 6 5 4 3 2 1
Library of Congress Cataloging-in-Publication Data
Loftis, Larry B.
Profit by investing in real estate tax liens : earn safe, secured, and fixed
returns every time / Larry B. Loftis.
p. cm.
Includes index.
ISBN 0-7931-9517-9 (7.25 × 9 pbk.)
1. Real estate investment—United States—States. 2. Tax liens—United States—
States. 3. Foreclosure—United States—States. 4. Real property—Purchasing—
United States—States. I. Title.
HD255.L64 2004
332.63′24—dc22
2004018054
Dearborn Trade books are available at special quantity discounts to use for sales
promotions, employee premiums, or educational purposes. Please call our Spe-
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DEDICATION
This book is dedicated to Gemma Dela Rosa, without whose help, sup-
port, and encouragement over the last four years this book would never
have been written.

C o n t e n t s
List of Figures vii
Acknowledgments ix
PA RT O N E
INVESTING IN TAX LIENS
1. If This Is So Good, Why Haven’t I Heard about It? 3
2. These Liens Must Be Only on Crack Houses, Right? 19
3. 10 Percent to 300 Percent Returns—And This Is Safe? 41
4. The Auction: Rules, Dates, and Fees 51
5. Bidding: Tricks of the Trade 65
6. What If They Don’t Pay? Foreclosing on Your Secured Investment 87
7. Nothing Is Risk-Free, but This Is as Close as It Gets 93
PA RT T WO
INVESTING IN TAX DEEDS
8. Attention All Real Estate Scavengers! 105
9. Lots, Ditches, and a Few Gems 111
v
vi Contents
10. Pennies on the Dollar? 117
11. Caveat Emptor! Risks and How to Avoid Them 123
12. The Bidding Battle—Not for the Timid 129
13. Free and Clear, but Can I Sell It? 135
PA RT T H R E E
LIST OF STATES
Appendix A Sample State Bidding, Registration, and Sale Rules 181
Appendix B Action Plans: Now Get Out There! 237
Index 241
L i s t o f F i g u r e s
Figure 1.1 Orange County Certificate of Sale Billing
Figure 1.2 Orange County Certificate of Sale Billing
Figure 1.3 Comparison of Tax Liens and the Stock Market
Figure 1.4 The Tax Lien Cycle
Figure 1.5 Iowa Tax Lien Purchase
Figure 1.6 State-by-State Listing of Lien, Deed, and Hybrid States
Figure 2.1 Corporate Tax Lien Examples
Figure 2.2 Church Street Station, Orlando, Florida
Figure 2.3 Bank Lien Examples
Figure 2.4 Government Lien Examples
Figure 2.5 Commercial Lien: Medical Office Building
Figure 2.6 Celebrity Property Liens: Julius Erving and Hector Camacho
Figure 2.7 Sports Star Property Liens
Figure 2.8 Celebrity Property Liens
Figure 2.9 Julius Erving’s Condos
Figure 2.10 Four Examples of Residential Tax Lien Properties
Figure 2.11 A Million-Dollar Residence with Tax Lien
Figure 2.12 Commercial Properties with Tax Liens
Figure 3.1 Possible Returns on Tax Liens
Figure 4.1 Orange County Online Auction
Figure 4.2 Taxpayer Identification Form W-9
Figure 4.3 Successful Auction Examples
Figure 5.1 Yours Truly at Work
Figure 5.2 Nebraska Over-the-Counter Lien Purchase
Figure 5.3 Training Others to Play the Bidding Game
Figure 7.1 Appraiser’s Information on Lien Property
Figure 8.1 State-by-State Categorization
vii
viii List of Figures
Figure 9.1 Commercial Building on Which I Was Outbid
Figure 9.2 A Safe Investment in Kansas
Figure 9.3 Example of Sheriff’s Deed
Figure 9.4 Vacant Lot Purchased for $75
Figure 9.5 Example of Sheriff’s Deed
Figure 11.1 Property Listing Showing Potential Environmental Problem
Figure 11.2 List of Properties with IRS Liens
Figure 13.1 Example of Sheriff’s Deed
A c k n o w l e d g m e n t s
My greatest debt of gratitude for this book becoming a reality is to
Gemma Dela Rosa, who has worked with me over the last four years.
While her official title has been everything from Vice President to Na-
tional Director, she is best described as my “right hand.” She has been
with me at the vast majority of tax sales where I’ve bid or invested, has
spoken with county officials in almost all 50 states, and has invested in
numerous states herself. She is a tax lien expert in her own right. In
short, this book would not exist without her and my thanks to her will
never be adequate.
I would like to thank my editor, Mary B. Good, for believing in the
project and being the nicest person to work with in the publishing in-
dustry. Mary is gracious to a fault and makes a long, arduous task a
pleasant and enjoyable process.
I also would like to thank those people who have worked with me,
researched for me, or studied under me, including Kerry A. Lucas, Pa-
tricia Vallejo, George Smith, Travis Smith, Don Williams, and Harumi
Takahama.
Finally, I’d like to thank several county treasurers and tax collectors
for their generous help—Kathy Stinn (the nicest county official one
could find anywhere), Larry Framke, Bob Knowler, and Earl K. Wood
(the dean of all tax collectors and a gentleman of the highest order).
ix