In 36 Seconds 7 Properties SOLD.

Really?? Well sort of, the delinquent property tax lien sale Yes. When you don’t pay your property taxes you get a late penalty and a lien on your property. Now depending where you live that amount can vary. What I am going to share with you is what I know about the Chicago area and several counties.

What the video to see how fast they dispose of the liens. If memory serves it was about 5,000 liens gone in a day and a half.

In Illinois you are bidding on the lien. Which mean that you get first priority in paying for the delinquent year(s) tax. Then after that if they have not paid you then you will be able to foreclose and get the property. All the stats I have heard say it’s about 95% redeem. Means almost all pay up. On a occupied home in Lake county it’s 2 1/2 years before you can foreclose which give you an added expense. Cause you can pay off subsequent year(s) taxes. In the mean time if they don’t pay you can earn between 24-36% returns per year or in till they pay up. How is that?

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If the tax is not paid you have to go to the auction and bid the rate down from 18%. That is what the video was. If they don’t pay the next year each payment was 12% fine. Lake County has 2 payments per year. Add that up 24% that is paid straight to the county you don’t knock on the door to collect. Then once the owner pays the county sends you your money plus interest. Another big issue in you can’t go inside the house. So the lien you buy can be a crappy house.

I know I am leaving a lot out due diligence: is the house vacant, does the house even exist, it it vacant land?  Where does the tax lien sit in order of important, mechanics lien, municipality lien, IRS lien, mortgage and I can go on and on. When I was at the auction lot of vacant land was not sold and the owners were banks.

Let me give you some more good things about tax liens. It is passive your don’t have  the 3 T’s (tenants, toilets, trash). Which mean it could be ideal for a self directed IRA. You are not dealing with collection it is left to the county to do that on you behalf. And you get a modest return over the years.

By no mean do I expect you to go by lien after you read this. If you do your an IDIOT get to know the proceeds involved it you don’t follow them the county will take you money and not give it back.


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1 comment

  1. David Piotrowski

    What do you like about tax lien investing?

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