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good afternoon I want to thank everybody for logging in say to our webinar on what you need to know about investing in tax liens we have a great guest for on hand today to really dive into the world of tax lien investing and give you some great information and really to get whether you're someone who's just looking to get started or somebody who has been investing a little bit in tax liens already I think it would get a lot from today's speaker and guess that we're happy to have on just as we go through the webinar today we are always welcoming any questions that you might have just please type your questions into the chat box on the screen we'll make sure that either myself or our guest host and presenter today we'll get to those questions as we move along so you can type those questions in if we have too many questions the under forward so we made a run at a time but we will do our best to get to as many of those questions as possible now so today's again webinar is on what you need to know about investing in tax liens my name is Scott Maurer I'm the director of business development for advanced an IRA a licensed attorney by degree I've been with the company for a number of years now helping people invest in a lot of different types of assets using their self-directed IRA accounts early tax liens and and even some extent tax deed investing something recently we have seen a lot of and that's why I really wanted to have our guest host on today to talk about what she does and give you and share some information with you now just a quick disclaimer about advanced IRA we don't provide any legal tax or investment advice so we also don't endorse any products and we know we're not affiliated with any other company including the guest presenter today we provide a lot of educational content we bring guest speakers on to share their knowledge but it's mainly for educational purposes if you need a referral though to a tax adviser or legal adviser or even a finance advisor we're happy to provide provide some of those referrals as needed as well so please just reach out to us we'll make sure that we get those to you for those of you who are unfamiliar with advantage just a little bit about who we are we're a self-directed IRA administrator I'll talk a little bit more in a second about what that exactly means as far as self-directed IRAs I know many call our already familiar with that we hold over a billion dollars in assets for our clients and our main are two main offices in at one in Atlanta and one in the Tampa Bay area and we really focus heavily on the customer service aspect of our business and giving every client who works with us a one-on-one relationship for anything they need regarding their self-directed IRA account we also are very committed to the education aspect and that's why we have again a guest on today we have other webinars other live seminars in our offices throughout the year either whether it's this month you get into next year we try to bring a lot of different and good content whether it's again whether it's a live event at one of our offices or even the online webinars and trainings like you're watching today we record a lot of those trainings for people to watch later and some of you may actually be watching the recording right now on our Advanta on-demand Channel so I would encourage anyone who's looking for more information about self-directed iras or to seen even some of the other guest speakers we've had in the past you can go to our advantage to man channel and for anyone who's listening live today you'll be able to go and actually listen to this recording when we post it on our channel in a few days as well now just quickly to talk a little bit about self-directed iras before we bring our guests on a self-directed IRA for anyone who is on the webinar has not heard it's the ability to use your IRA your individual retirement account or maybe an old 401k to invest in assets that you know and can control our clients use our I raise to invest in a lot of different types of real estate mortgage nodes private placements foreign currency and obviously tax liens as we're talking about today but the term self-directed simply means that you're in control now the IRA accounts themselves are still either traditional or regular IRAs as well as you know solo 401k etc but self-direction really the moniker self-direction and that modifier is simply the ability for you to control what it is that you want to invest into people typically choose to self-direct for a couple of different reasons sometimes it's one or more of these reasons for a lot of times it's people finding a different source of capital base for investments or assets that they're already familiar with so in the context of today's webinar someone who is already investing in tax liens with their personal money who's already buying and selling those types of assets their IRA simply provides a new source of money a new source of funding to compare them to go buy their next particular tax liens other clients it's the ability that the games inside of an IRA account accrued tax deferred or even possibly tax-free or the Roth IRA so if you are investing in tax liens and we know whatever return you are making back into your retirement account that is not taxable to you at all in your current tax year so depending on the brackets are in depending on what you're looking to do you want to certainly you know make those investments inside of an IRA account now if your another reason people look to invest is that they're frustrated or scared of the stock market they want to be in control obviously we've seen some dip sleaze recently in the market obviously that's a little bit of concern for for many people as well that their IRAs their old 401ks are sitting in a market that they really have no control over so again the types of IRAs of the types of plans that we have traditional or Roth IRAs simple IRAs and you know any former employer plan can be self-directed and moving money between those accounts to a self-directed IRA is very simple it's a matter of either doing a transfer from IRA to IRA as a non-taxable trustee to trustee transfer you can do those as often as you'd like an impartial amount this self-directing is not an all-or-nothing proposition we've had a lot of individuals who have IRA accounts with a brokerage firm with a bank that they move portion of that money over to make a particular investment using the self-directed IRA account similarly the transfer is IRA to IRA direct rollovers are simply moving money from an old 401k or 403b type plant into a self-directed IRA typically those transfers happen within one to two weeks just depends on your custodian ultimately to to decide whether or not you know obviously how difficult it's going to happen though the types of assets that we have in Advanta they're very diverse again we're very heavy I guess there are clients I should say are very heavy into real estate individuals investing in rental properties whether they're buying a rehab or a flip investing in multifamily or commercial real estate a large of our clients investing in private notes and mortgages that are also tied to the real estate space probably seventy to seventy-five percent of our business and aren't what our clients hold is in real estate again whether it's a rental property rehab a note or mortgage we see a lot of other kind of private placements you know hedge funds in the private equity space maybe not really tied to real estate but can we see a lot of mobile homes so mobile home parks the multifamily investments the LLC's that are capital raising mechanisms for real estate and certainly as we will talk about today we've seen people invest in tax liens now the common thread with all of the assets that we hold it Advanta is simply that a brokerage firm like a bank or a swab or a fidelity those companies do hold or not willing to hold these types of assets in an ir right now the IRS is perfectly fine with you making this investment but you have to have a custodian like Advanta to make it possible so if you're looking at investing in tax liens and you have IRA funds that you want to use towards that purpose using an accountant advantage will help you make that investment keep your IRA tax protected and then obviously have the games coming back as well into your IRA tax-free now that's kind of my portion of today's webinar I want to talk I'm just introducing self-directed IRAs again I assume a lot of people on the call are familiar with it with self-directed IRA as if you're not again our YouTube channel has a lot of great information other webinars that get in much more into depth on self-directed IRAs but at this time I would introduce our guest host Chantel Owens with the Georgia tax lien boot camp who is really going to share a lot again great information about investing in tax liens now again she is based in Georgia I'm much more familiar with the Georgia tax liens so a lot of the information might be skewed a little bit that way but there's a lot of other great information on tax lien investing regardless of where you're located to really learn a lot today so shantel how are you doing today I'm fine Scott thanks for having me on I'll have to get in here good well great I look forward and I'm sure beyond the call looks forward to to hearing what you have so I'll turn it over to you alright well thank you alright I hope everyone is well I'm going to go right ahead and jump in I know everybody's on their lunch break so I'm going to try to get through this information and give you time to answer questions so again welcome to the Georgia tax lien boot camp and I am shantel Owens and just as Scott had a disclaimer I also have a disclaimer I am NOT a lawyer I'm not an accountant and the information that I'm presenting today does not establish those relationships should you need inform counsel please speak back counsel stop all right now that we've got that all the way out the way let's jump right in so I hope many of you can see this big fat check on the screen and I always like to put this check up here because it really catches people attention and it really gives you an idea of what you can do with tax bling so this comes from a purchase that or sorry excel that my partners and I actually sold a property that we purchased in the tax bill to one of our tenants this is the first sale in the last ten years so most of the properties that we buy at the tax sale we actually buy and hold but this regardless to what what your strategy is with tax liens whether it's buy and hold fix and flip or wholesale you can see what is actually possible because this is a property that we actually purchased for $4,500 we put about fifty five thousand dollars in it to bring it up to rental both standards we had a tenant in it for two years that was paying $1,200 a month and then we eventually sold the house to the tenant because she really wanted to buy it so this is actually what's possible all right well I'm going to go really fast through these next couple of slides that basically describe me I usually use these slides to qualify me as the person teaching your class but you will be able to go back in watch these slides but suffice it to say I have been a real estate investor for 20 years I have gone through off pretty much every facet of real estate investing in those twenty years and the last facet that I came across was tax liens and so since that time I have chosen to only invest in tax liens I'm pretty schooling with tax liens because tax lien typically are the lowest point of entry that a person can purchase real estate and so I'm obviously boiled with the low prices of tax liens but how I actually got into tax liens I went through to market crashes and then the SEC market crash I had inventory that went into foreclosure or at least I thought it had gone into foreclosure the banks actually did not foreclose and therefore the property taxes will never pay the bank didn't pay the taxes and I didn't pay the taxes and that property went into a tax bill and when I was contacted in reference to that property I actually went back and was able to redeem that property or redeeming pay the investor that won that property at the tax sale what they paid at the tax sale plus 20% in order to redeem that property and from that point on because I had knowledge and real estate I was able to reverse-engineer the process and realize that I actually you know was sitting on a gold mine and so that is my foray into tax ville but in the last 10 years I've been investing in tax sales and then recently in the last year and a half I've actually been teaching others how to take advantage of tax sales to create you know whatever their goals are whether that's to retire whether that's to live a certain lifestyle you know or if it's to you know create lump sums of cash so I've taught I've worked with several organizations and I've taught many students though I always like to talk to people about wealth because you can actually create wealth through tax liens always ice people to axe your self a question about wealth and see where you stand in that line so can you actually take a day off work not have to ask anybody and not skip a beat financially and if you can do that for a day then ask yourself can you do that for week a month a year a decade or even forever right and then if you can do that forever is this a legacy that you can also leave your children and not necessarily that you wouldn't want your children to have to work but would you want to put your children and their children in a position where they can choose what work they want to do or they can choose you know what lifestyle they want to live and so this is actually obtainable through tax lien all right so today I'm going to talk about three secrets that everybody always wants to know about tax liens one how to compete against the big boys and win because this is the number one thing that I hear that intimidates people and hold a lot of people back from getting into tax liens but there is a way to overcome that number two how to access properties that you can actually afford in the tax bills because many people eyes I see are there still properties left that you can purchase and then three how to obtain properties without displacing families because this is a huge concern for a lot of people and so you can structure your business model around this if this is an issue for you so this is the property that actually me insta-tox sells right so this is my silver light it doesn't it's time for me this property's off even this one or so I thought had went into a foreclosure and so this is the property that I told you did not actually go into foreclosure so someone purchases property at auction for $2,100 I always like to pause right there because I know a lot of people have trouble believing that but this is actually true this house at the time was valued at ninety thousand at one time it had actually been valued at a hundred and forty thousand and that was what I had a mortgage on it or at the time it went into the tax bill so someone purchased this house and I was able to purchase it back from them for $2,100 plus twenty percent right and so once I did that I began to reverse engineer this process so let's take a look at the process they shouldn't talk about that since I do image quick introduced because it was something you just said somebody had a question I want to make sure that we maybe get this out of the way this question somebody said you can buy back or redeem the tax into what they paid plus twenty percent other questions of us that I have heard that there are rulings that will limit the amount to redeem is limited to the actual tax amount and not what the final bid amount was I don't know if you can speak to that briefly I want to be more clarification but that was a question we had I know you just mentioned that again I wanted to clear out so the Redeem what they paid plus twenty percent or is it limited to the actual tax amount I get that's a question okay so obviously every state is different and so today we're talking about Georgia but most state pretty much have that same law so typically it is what is paid at auction so there are some cav
ats around that which one exception to that would be if the county made some type of error in bringing that property to the tax sale then that can actually be challenged the other thing with that is that whatever was paid over the amount of the initial taxes that was owed to the county then the original homeowner can apply for that overage anyway but in in the actual redemption process they in order to redeem the property would have to pay what was paid at self plus the twenty percent so if the back taxes was a thousand and then that property was bid up to ten thousand the property owner wanted to redeem the property they would have to pay the investor the ten thousand plus twenty percent however once they did that or even before they did that at any time once the county had collected those funds they could go directly to the county and apply for the overage will be the difference between the one thousand I was owed to the county and the ten thousand that the actual tax lien investor had actually won the bid for so that would be overage for nine thousand dollars they could apply to the county to obtain that those fine okay thanks for though I'll let you continue on just encourage anyone you have other questions please get them typed in we'll make sure we try to get to them before the end of the presentation so okay all right so just so that we can start in it understand how this whole process start let's take a look at why tax liens are created so tax liens are created for one reason and one reason only and that's to collect delinquent property taxes and so some people ask the question why is that so important well it is important is so important that each state implement actual law in order for the Tax Commissioner to be able to enforce this and then the tax and the tax Commissioner actually takes on the power of the sheriff in order to enforce this in many states the tax commissioner will also be known as the ex officio sheriff so that they have those same powers but the reason why this is so because property taxes in most places make up 60 to 70 percent of any County's budget so that budget goes to create schools pay those teachers create roads parks library government buildings and government officials so that lawyers judges doctors policemen firemen you know all those County workers have to be paid and so that is where predominantly the budget to do so comes from it so this is why it's so important so let's look at what actually happens when taxes are not paid and I do apologize because I don't have all the fancy bells and whistles that I usually have with my my deck my presentation deck but basically what happens is the taxes are past due once the taxes are past due the Tax Commissioner has to collect by law they are under criminal penalties for not collecting property taxes so they have to do so and if they cannot collect in cash they must collect in parcels meaning parcels of land and whatever improvements sit on top of that land they can collect once they collect that or levy is actually the word they can then put those parcels into auction for sale to collect whatever money is owed and do to them so that's how that process works so a lot of people always act so what is actually is a tax lien and tax lien is like an umbrella or a category that houses tax lien certificates and tax be so let's just take a look at those tax lien are actual lien that are already always present on every parcel in the United States right it's they are invisible so most people are not aware that they already sit there but if you want to see them become visible perhaps you don't believe me try not paying your taxes and you will see it become visible and when it becomes visible it becomes superior to other liens on that deed or on that title so when I say all other liens that means all other lengths so that means it will supersede a mortgage IRS lien a state lien a mechanic's lien Hoa lien a creditor lien and any other type of liens that you can think of the only other Ling's that may sit equal to it would be other County liens so that could be like a special tax assessment or any other judgment the county may have placed upon that property so that's how our tax liens are actually work now tax lien certificates are a category under tax liens is a type of tax lien and it's actually a certificate so you receive a piece of paper that typically will say certificate on it that's going to entitle you the bearer to receive interest and that interest typically is going to be a annual percentage rate but it's going to be accrued interest so if you have a tax lien certificate that entitles you to 12% you're typically going to earn 1% per month so if someone redeemed redeemed meaning they come and pay you those amounts to retrieve that property they're typically let's say if they redeem in month 3 then you would have accrued 3% interest right so that's how tax lien certificates work and they typically do not give you any interest rights in the property and most of them depending on the state there will be another process if someone does not come to redeem that you can partake in to actually receive ownership interest and that could be either if the property would go back into auction and now you can go into that auction and you may have first right a refusal of any other bids that you can actually say no I want to bid and then in some states you can just apply to the county at that time to receive the actual deed so that if that actually varies from state to state now tax deeds are actually D so they typically do give you some form of ownership right now in most cases that is going to be a very low ownership form and so the highest form of deed ownership is a warranty deed a warranty deed typically is going to allow you to obtain title insurance or is going to the seller or whoever gives you that deed is basically saying that I warrant that I had the right to sell you this property and if anyone comes and challenges that I am going to defend that so that's typically the highest form of D that you can have and that's how most people purchase property especially owner occupied properties a lower form of D that you'll see is a quitclaim deed qu IC not qu IC k because i hear people say quick claim deed but a quick claim deed is basically saying that if I give you a quick claim deed I am basically saying that I am quitting my claim in that property and I'm giving no warranties that I had a right to sell that property so that's one of the lower forms of deep well a tax G is just going to spit just above that and basically a tax deed is a type of D that is called as the feasible D meaning it can be defeated someone can come and defeat your right in that deed and in the case of if they do so they must compensate you what was paid at auction plus whatever percentage is and you're entitled to via that state now in a lot of states there is no redemption period once you purchase a deed so once you purchase that D you will own the property outright and so then if you want to obtain a higher form typically there will be additional legal steps that you must complete in order to actually obtain a warranty D alright so let's look at tax liens by state I know we have people from different states here so I personally am in Georgia so if you look at Georgia we have what is known as we are a tax B state however you do see a streak so we do have a funny type of deed and I'll be discussing that a little bit later but for those days did you see deed in blue those are your typical states that if you receive the deed then you actually have ownership rights in that property right away then tax lien certificate states those are the states that I discussed you will receive a piece of paper that entitles you to interest and will be looking at that a little bit further as well Shanta another quick question pop-up and I'm sure there's a question that a lot of people might have said in your experience over the years inviting you know tax liens what percentage have been redeemed before you got ownership or what percentage did you actually then are quite way able to acquire the property okay so there are property tax investors people who want the property and then there are interest tax lien investors people who actually want the interest and so you have two different models of investing so I for the most part of my tax lien career have been a property investor so I actually wanted the property and so for me in my model I buy the most ugly house you can think of and so really I also buy predominantly vacant properties and so Myra personal Redemption rate is very low so in the last ten years I've only had three redemption so oh my Redemption rate you know is less than 1% and so you know it just depends on your actual model because obviously if you're an interest investor you want people to redeem and so there are steps you're going to be taking to make sure that that happened so ultimately the answer to that question depends on what your goal is okay babies okay thank you we'll just we'll continue on again anyone else questions please get them typed in all right so let's talk about the secret billion dollar industry how many of you actually knew that tax lien is a billion-dollar industry I'm sure many of you assume that but I bet most of you didn't know that it's a billion dollar per day industry not per year not per month but per day and that's a quote actually coming from JP JP Morgan who as you can see banks are the number one investor in tax liens many people don't know this because they don't actually invest in their name they actually create funds or loan money to other institutions to invest in tax liens and so let's take a look at why banks invest in tax lien so this is a table that shows you based upon state how much interest you can earn from tax liens and these interest rates are actually state mandated so they're backed by state law and so tax liens are an actual anomaly because they are a high-yield investment with a low risk and so typically those who don't go together typically if you have a high year you will have a high risk so this is why banks love investing in tax liens actually tax liens are their number two investments on insurance is the number one investment and then tax liens is the number two investment of most big banks and what they typically do is they take your heart or dollars in that you deposit in your checking savings money market account beauty accounts and they go incessant insurance and tax lien and this is the rate that they receive for those investments and you can ask yourself how much of this interest do they give you as a return in your account and I'm willing to bet that most of you are receiving less than 1% so this is what they do so you can actually take your own hard-earned dollars and invest in cycling's as well so I talked about property investors but there's also interest investors people who actually want the interest and let's just take a look at why someone may want that interest so there's a rule that a lot of wealthy people know about it's called the rule of 72 and basically it explains how long it would take you to double your money at any given interest rate and the formula for that is to simply divide whatever interest rate you're receiving from your investment and divide it into 72 and that will tell you how many years it will take to double your money so in the case of Georgia we received 20% interest on redeem tax liens so it would take three point six years is that redemptions were one a year or you could have three point six or let's just say for redemption in one year and you would have doubled your money and so there are people that actually do that and that is actually perfect for people who have retirement funds because your funds are going to sit there anyway and so you might as well give it a chance to double right this is where you could actually do so let's take a look at tax deeds in Georgia I apologize for all those people who are from other states but we're going to examine taxing these in Georgia today but feel free if you have questions about other states and I know the answers always go ahead and answer it and if not then I will you know just let you know I don't know those the answer to those questions so taxis in Georgia are actually known as redeemable deeds meaning that the investor can actually purchase a deed they do get interest right but those interest rights can be taken away or redeemed by the original home owner so in Georgia you will hear people say that there is a 365 Redemption 365 day Redemption period that is actually not true any person owning property has to infinity to redeem the property it is just that the investor themselves cannot start a foreclosure on that right to redeem for 366 days so they the investor has to allow 365 days to elapse before they can begin the foreclosure process however let's say they did not start a foreclosure process for 3 years then the original homeowner will have 3 years to redeem so the redemption period does not automatically stop on day 365 it does not stop until the foreclosure process is actually completed so ah let's see so one of the biggest impediments that most people to have have is getting started as a real estate investor is money and this is where your retirement funds can really be of a benefit because you can use those funds to invest in tax liens right and so let's take a look at my actual first investment in tax lien $2,300 is what I pay for my first investment and this property actually the property that you see actually had a tree through it this is what I mean when I say I buy the most ugly house or the most despicable house that you can find that people feel like should actually be a teardown because the tree was actually straight through the middle of this house and for most people that would just be so intimidating I'm not going to lie I was intimidated too but for $2,300 I knew that I could figure it out because this house at the time maybe was worth about $60,000 and so I knew that this property would be a great rental and if I could just figure out how to get that tree off and get it fixed and actually that end up not being such a bad thing just really require someone to cut that tree up remove it from off the roof I had to get some framing done and then just repair the roof so that was pretty much it so that actually ended up being great and it taught me that you know some things look a lot scarier than they really are so but a lot of people actually don't believe that you can buy tax liens with this amount this was ten ten yes ten years ago when I bought this property but there are still properties and inventory on the courthouse steps for this amount now this particular property in the same county will probably go for about ten times today what I pay for them so you probably pick this property up for $20,000 in the tax sale however the value of this property has also doubled so tax liens flow with the traditional real estate market when Vittorio's hi the prices of tax things are going to be higher but it is still the lowest point of real estate that I have seen today so so secret - there really is still inventory out there for pennies on the dollar a student of mine and I free please forgive me I have not updated my slides in a while so this was in November of last year that she won this probably she won this property for $4,200 it's a townhome worth $70,000 right but I do have students that I have taken to auctions this year and they have won properties for a little as $5,200 I have a student last month actually purchased a commercial property for $4,200 so it is still out there secret number three the majority of homes that are still on the list on auction day are vacant and so if you have ethical dilemma with purchasing types of properties with people in it where you feel like you're going to displace a family you can make create a business model that you will only buy vacant tax lein property so this is what I personally have done for my 10 years in tax lien investment owners will stay free and clear this is significant and so a lot of people have trouble actually wrapping their mind around this because a lot of people actually buy real estate with with mo
tgages and so they don't fully understand the two benefits of owning real estate free and clear so only real estate friends clear allows you obviously want to keep more money if you sell it if you wholesale if you fix it or if you are a buy and hold landlord like me you're going to be able to keep the risk instead of having to pay a mortgage which allows you to also be able to leverage the property if you need so and also it also will allow you to be able to set your own rental rates right so it definitely has its advantages so let's take actual look at the process in Georgia and how it actually works so in Georgia if divided a home I'm sorry I think I went too far there we go devine absentee owned home owner fails to pay his any County Georgia Tech property taxes on December 31st 2016 On January 1st each county in Georgia by law has to place that lien on the property they now have the right to sell the property that happens automatically on January 1st so arbitrarily let's just say the first Tuesday in June the biome owner tax levy is auctioned off the high partial high bidder who is issued a taxi she paid $1,000 for that tax fees Devine a home owner can redeem that taxi up to any point until Tasha high bidder forecloses on his right to redeem Tasha high bidder however cannot start the foreclosure process for 365 days or until June 7th if Devine a homeowner resines at any time on or before June 7th he must pay touch the high bidder the thousand dollars plus 20% so for a total of twelve hundred dollars if divided a homeowner does not redeem at any time on or before June 6 Tashia high bidder can then start the foreclosure process and that's why she looks so happy but Tasha high bidder will be able to take possession of the property once the foreclosure process is completed and that typically is 45 to 90 days it must be 45 days minimum by statutory law that process typically on average will cost about $1500 and most likely you will need to hire an attorney to complete that process for you if Tasha high bidder wants to sell the house at that point she can do so however she will only be able to sell it via taxi she does not have a warranty deed at that point if she wants to sell the house via one CD she will have to file a quiet title action and that is the actual lawsuit that she must bring against anyone having an interest in the property in order to be able to clear that title either way Tasha will receive her initial investment plus 20% or possession of the property she will not receive both is one or the other all right well I'm going to skip over this slide of why wait a year because I do want to give you all time to answer some questions to add some questions so I am going to open just I do want to let you all know I have a bootcamp coming up so if you're interested in learning how to be actual tax lien investor in Georgia we have a bootcamp coming up this weekend so other than that I'm going to open up the floor for questions all right great information Chantelle we did have a number of questions I would get encourage anyone who's got some more as we go along here to ask them but we'll kind of jump in one person asked to repeat the formula of 72 I can do that the rule of 72 it's kind of a unique when you're investing in a tax deferred or tax for universe like using an IRA account you divide your amount you divide your rate of return into the number 72 and that will tell you how long it takes for your money to double so for instance if you are at an interest rate of 12% 12 into 72 is six times your funds will double within six years if you have 20s Chatel showed 20% return divided into 72 is roughly three point six so be three point six years so the rule of 72 it's just you divide the rate of your return into the number 72 and that will tell you how many years it will take for your money to actually double with Ana tax deferred universe so just wanted to state that let's see one question said where does someone said where does the mortgage holder fit into the process and along that same line someone asked why would a bank allow an investor to buy a lien at a much lower amount than the mortgage so maybe tax kind of both of those same time but how does where does the mortgage so like a bank for instance where do they fit into this process with the tax leaves okay so the bank has a mortgage which is a lien on title however they also are responsible for paying the taxes so if the factions are not paid the county does not care where those funds come from and so they will put a lien on the house so the bank just like the home owner also has a right to redeem but they can actually come and redeem that property pay the investor what was paid at auction plus 20 percent however if they do not and the investor actually starts the foreclosure process and a lot of people have trouble wrapping their mind around this they will lose their position because they will also be foreclosed upon so in essence tax liens can actually wipe away a mortgage I've wiped away many so and it could wipe off any other lien so anybody that has lien on that property can also come and redeem the property so not just the mortgage company but if a creditor has a lien or there's a second mortgage company that has a lien anybody else that has a link can redeem the property and so you have a new idea the question yeah why was it why would a bank then allow an investor to buy a lien in a much lower amount I'm a guessing a lot of times they probably don't but sometimes they I'm assuming they get missed yes a lot of that falls through the cracks also in many cases the bank has already recouped whatever funds you know they have a threshold you know and so it may not be of value for them to actually redeem the property especially if it's a property that was bid up you know so maybe the initial mortgage was three hundred thousand right and let's say the person has paid that down to fifty thousand and now at auction what was it got bid up to a hundred thousand well the bank is going to say you know that's not earth to us now we have to pay a hundred and twenty thousand to get this property back what we've already recruits our money so a lot of times they will just and sometimes the bank can't afford to redeem the property as well and then in many in many cases is just where the bank let it fall through the cracks and a lot of these banks you know I hate to say it they have insurance on the property nine times out of ten and it's going to attract so if it has a mortgage it's probably our in foreclosure as well and so they have mortgage insurance so they just elect to get paid out through the insurance it's it's the reasons vary so much as an investor though we will we just know that we get our 20% and then we can wipe that off you know but a lot of people do have trouble actually believing that that that actually happens but yes it happens every day all the time yeah other question somebody asks is a quiet title action a lawsuit and you said yes to that that's a legal procedure you want to either get an attorney or someone involved to help you file it it's actually you are filing a quiet title action it is in a form a lawsuit to make sure that any other potential claimants against the property are eliminated that correct yes so there's two procedures and so I know I was one a little faster one is the actual foreclosure which is not like your traditional foreclosure is actually a foreclosure of right to redeem so you're just foreclosing on someone's right to redeem and then the second process so that process you can either do pro se or you can hire an attorney obviously I recommend people hire an attorney so if it's done incorrectly you can fall back on their errors and insurance however the second process in order to be able to obtain a warranty D is the quiet title and yes that's an actual lawsuit and it has to be typically done by an attorney so but it's somebody else and somebody asks what court has that done it that's just a local circuit court err it's done and superior typically it's done in Superior Court okay yeah but the local court of the county in whichever county the property is lies or parcel lies is the county that it would be done in and typically that's going to be the Superior Court but every state difference but that person would have to pretty much contact the county and act that information what you talked earlier you talked about tax liens you're saying you know finding perhaps vacant property someone wanted to know kind of what do you do or how do you know if a property is indeed vacant that you're bidding on sometimes you don't know because sometimes you don't have tax lien properties are not your traditional properties where there's going to be a lockbox or the county is going to give you a key there's not going to be a real estate agent that can show you that property unless it was originally for sale anyway so many times you may not know but over doing this for 10 years there's a lot of sizes you can look forward to see ever a property is most likely vacant you know obviously the ones that are very vagrant are you know typically vacant they typically have the doors wide open anyway but then other things could just be the wear and tear of the exterior of the house the yard you know those type of things mail piling up in the mailbox you know those type of thing so but in in some cases you won't know let me say another question here pull one someone said you are asked you said you said mortgage and homeowners responsible for paying the property taxes so anyone with a lien can redeem the tax lien would that also mean lien holders like contractors who can take away investors right to work clothes I think you meant no correct from romwe people if you have a lien against the property you can potentially for clothes but tax liens take a little bit different priority than perhaps a contractor's lien okay yeah so the the tax lien is going to supersede let's say a contractor's link a lien but the contractor who has a lien on that property can redeem that property from the investor because they originally had a right before that tax lien was placed they can't they have a right to then redeem so if a contractor is old money they place a lien on the property it goes into the tax bill the homeowner has every deemed the actual contractor can come to the investor and say I want to redeem the property all right another question what is the secret for the it for an individual compete to compete and win against the banks or the larger groups kind of what is some of your whatever what's one of your good secrets you can share with us okay right so the secret is that so most people who actually get into tax lien investing and a lot of courses will teach you to only find maybe five or ten properties because you're selling with typically you're dealing with a list of a hundred plus properties that are going to attack sale at one time and it could be up to eight hundred properties so a lot of people don't have the time resources or inclination to research eight hundred eight hundred properties so most people will only research five or ten properties well the trick is to research as many off that list as you can that opens up a pool of options and then typically there may be some that those the big boys or the banks did not want that you can still get but if you only research five properties nine times out of ten you're not going to win a property at auction because somebody else is going to want those same five properties and you're going to get outbid so I think my students to do due diligence on everything if you can do that whole list do the whole list any people walk away with anything with I've done the whole list and I may have only walks away with one or two but really for people like that's that's always hey there's one or two one of the questions let me ask the question I cans instead of my self-directed IRA Burch purchased the tax lien and I require financing to fix it up to resale is my IRA subject to UDF I tax if I now own the property versus financing the purchase of property which normally triggers that the answer is yes if you if you buy any real estate with your IRA account and you use leverage in order to fix up the property or even to purchase a property when you sell it that does trigger you dfi tax to the IRA but if you're just buying a tax lien getting the property and then selling the property or if you're buying the taxing that's just simply being redeemed no tax implication whatsoever to your IRA so it's kind of very special case that that question pops up a lot of people asking about kind of the sources where you can find the properties are available there lists online either in Georgia or perhaps I don't if you know of other states as well these are lists of properties online or they can also actually do some of their auctions online as well right so every every state is different and within those counties is different and so some of the sources one place that you can always find tax liens most people don't like this one source but this is guaranteed is in whatever local or legal organ or little newspaper that the county is required to put those notices in because they have to give the homeowners notice so that is one place that you can always find it is going to require typically some manual work or subscription to that newspaper but that's always guaranteed now typically a lot of counties do have that online so you're going to either contact that county or you're going to go on their website and you're going to have to search for that list is they don't put it in a easy place to find like this is a secret billion-dollar industry banks try to keep it that way oh it's not always easy to find so yes it does require some researcher but that one place is always guaranteed because that's by law a couple questions here kind of all going around the realm of due diligence and people asking like do you know one question is do you see the property but you get to see the property before buying and then obviously what kind of research are you doing on the property what you know what would you be a couple key points of proper due diligence so I'm assuming you could look at the property if you find the property online you can just drive by and look at it if it's in your area correct yeah so that is definitely one due diligence that I encourage everyone to do because the county does not do any due diligence and so sometimes it may not actually be a property it may be a piece of land and it may be a piece of land that actually sits behind someone's property and so these are things that you would want to find out before you purchase I don't I don't encourage people to buy properties sight unseen other due diligence you may want to do is you want to find out the value of the property if you're a buy and hold you you want to know what you can rent that property for you want to know what type of property it is is it single-family is it residential or commercial is it land you want to know the ARV or the actual value of the property if you're a wholesaler you know so those are some of the things that you're going to look for another great question someone said once you actually buy the tax lien so you found it you found it online you did your research you did you do diligence bought it during that first 365 day period you have do you have to attempt to contact the parties that may have a legal interest in the property and if not you if you don't have to is there a point at which you should okay so no you don't have to in that point in what your business model obviously if you're interested today so that you can get your money and redeem it you can go reinvest it but if you're a property investor some property investor well-off but during the foreclosure process that is actually what the foreclosure process is is on people's is at least one that has an interest in the property that they're right to redeem is ending and so you have to contact them at that point right in Shinto you cut out a little bit during your in so I'll just recap again yet if you're buying for mainly the interest you might contact people then to actually hey somebody want to pay me off and I get my money back and reinvest
them if you're looking for the property that's a situation where maybe you don't alert everybody to the fact what's going on so I think it's that's a great answer question actually a question for me it's a self-directed format if you win a property is there a way for the investor to manage a rehab or work on the property now if you own real estate in your self-directed I race if you purchased a tax lien and redeemed the property you have that property now the rules do prohibit you from working on the property yourself actually swinging the hammer our interpretation of the rule so if you wanted to manage the rehab in the sense of you're hiring the contractors you're deciding what work needs to be done and your IRA is paying for that that is acceptable but as far as you doing a the physical labor on the property we do think that that is indeed prohibited for you for you to do so should so we had a lot of other questions I would would say but I don't think we have time to get to mall I would just say if people who are interested you know go to go to chantels website here I'll put up her all her social links as well because somebody said actually go one more questions we by Georgia tax deeds to the county tax sales only and when did these happen typically in Georgia I'm assuming it every county and every state is going to be different as far as their when they actually put the properties up for auction but at least in Georgia winter winter typically the buying period is that once a year is it an ongoing basis so every county is different some counties have once a year some have every month but if they have inventory is going to be hold on the first Tuesday of that month and so that's where they you know we'll go to auctions on that first Tuesday one other good question to govern du government liens survive the tax deed sale in Georgia it depends on what type of government lien it is if it's a county lien yes but any other lien and I would probably need to know that what type of lien I can't just Lang kit it but it has to be some type of county lien to be equal but most other liens are will be wiped off so even like state taxes are wiped off federal taxes are wiped off let's see one other good one here just someone said if you bought a tax lien it turns out the property is in probate do you know how will the investment process be done how long will it take for you to take possession I mean I don't know if you've had experience have you had that happen where you bought a property but actually the property is actually in going through the probate process any dues or don'ts with that scenario um yeah it was just a regular scenario the state wants to redeem it they will also have to pay what was paid at auction plus 20% because either way the old taxes and those taxes had to be paid so it won't trigger any delay in that year process it's just that they do still have any heirs also have a right to redeem if they don't you will foreclose on you know the state as well sweetie that's what about an IRS lien it supersedes it and they can also be wiped off through the foreclosure process okay see the one question one person to ask if they can get a copy of the slide deck the answer is yes we can email that up to everybody who registered for the webinar so we'll get that out here in a few days along with a copy of the recording and chantal the last question Olevia it's the best way to can someone ask to continue to get educated on tax liens for the state you're in this person turns out to be in Florida is it typically on line or a course or there's something they can contact you don't know if you have people in other states that you know of that you work with um I um obviously they're in Georgia I was I'm going to be biased and tell them just to cover me but there are some national programs that teach tax lien I don't know any in Florida per se so I can tell ya I did have one but I'm not for sure if they do Florida so like I mean that's really a Google search really to be honest with you right you know but I don't know any that I can actually work yeah I was going to say but you I would say most people will need really do need to take a course because it really is going to take you is a long learning curve on your own what I could say yes so well this time Chantel want to thank you again very much for your time everybody who if you ask the question unfortunately just didn't have time to get to a mall we had so many questions but I did my best to get to as many as possible but again you can reach out to Chantel individually maybe try to find you know get some quit your questions answered or find out more about what she does Chantel again thank you very much for your time today all right thank you stuff for having me alright and again anyone thank you all for listening or listening to the recording and encourage you to attend other webinars that we have try to bring as many great speakers as we can so again thank you very much for your time you
