I own rentals, I flip houses, I am a real estate agent, and a blogger. However, I have never invested in tax liens. From what I always heard, tax liens might get you a decent return, but it is almost impossible to buy properties from tax sales. I recently had Ted Thomas on my podcast and he opened my eyes about tax lien investing and how it really works. I am located in Colorado and he told me Colorado is actually one of the worst states to buy tax liens in. In fact, many of my perceptions about tax liens were true, based on Colorado laws. But, every state has different tax lien laws and procedures. In other states, it is much easier to buy properties with tax liens and you can earn much higher returns on your investment as well. Ted Thomas was nice enough to let me try out his tax lien investing course: Retire Young and Rich with Real Estate, and I review it in this article. Ted is still buying properties using tax liens and tax deeds at 77 and buying them very cheap. After going through the course I am even thinking about investing in tax liens in states besides Colorado.
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What is tax lien investing?
Almost every property in the United States has property taxes that must be paid to the government. Since the government makes the rules, the taxes have to be paid before any other debts or liens. When you get a mortgage on a home, the taxes and insurance are almost always escrowed by the lender. Escrowed means the bank includes those expenses in your mortgage payment and the bank pays the taxes and insurance for you. The bank does this because they want paid back if the house burns down and they want to make sure the taxes are paid so they don’t lose the house to a tax sale.
Because tax liens have first position over just about any other lien, they are a very safe investment. Every state has different procedures for how tax liens are sold, and in some cases for how properties are sold. Some states have deed sales, some states have lien sales, and some have both. When you buy a tax lien you have a chance of getting a property, but in most cases you will simply earn interest on your money (8 to 36 percent depending on the state). When you buy a tax deed, you are buying the actual property.
How do different state laws affect tax lien investing?
Colorado sells the tax lien, meaning you buy the liee only and the owner can redeem that lien at any time. If you happen to pay more than the tax lien is worth at auction, for example the lien amount is $1,000 and you bid $1,500 at the tax line auction, you will earn interest on the $1,000 owed and the owner of the home can pay off the $1,000 at any time, meaning the investor who bid on the tax lien is out $500. Colorado is one of the only states that handles tax liens this way and that is why it is a tough place to invest in liens. In other states the owner would have to pay back the full bid amount or you might even earn interest on the full bid amount. Not only are tax liens in other states safer, but there is a much better chance you will eventually end up with the property.
How does Ted Thomas’ Retire Young and Rich with Real Estate Course work?
After interviewing Ted on my podcast, I wanted to learn more about tax lien investing. He was kind enough to let me try out his program, and I thought I would review it to let others know about it as well. I was impressed with the shear amount of information that Ted included in his program, as well as the resources he includes. Plus they have live training calls (every week) and events (I did not attend these) as additional resources.
The course has a massive video training section with tons of information. I used to not be a fan of video training, until I realized I could just listen to the videos while working out or in the car. There is also a resource center that lists all the tax rules for every state in the country as well as contacts for each counties’ tax contacts. They even list when all the live auctions will be across the country on their website and have additional training on many different topics.
What is covered in the Retire Young and Rich with Real Estate Course?
There is a lot of information included in Ted Thomas’ course. It was tough for me to get through it all. Some of it was review for me since I have been investing for 15 years, but there was a lot of great information on the program on tax lien investing as well as investing in general.
- How to find tax lien information
- What types of tax sales to go to
- What states have the best opportunities
- How different auctions work
- How to bid at the auctions
- How to find information online about properties
- What types of properties to buy
- How to narrow down your search properties in the auctions
- How to market and sell your properties
- How much to pay for properties or tax liens
- What happens when the owner of the property files bankruptcy
- What happens when the property goes through foreclosure
- How does a quiet title suit work
- Much much more
I have reviewed quite a few real estate investing courses. I have not published every course I reviewed, because I felt some did not deserve the publicity. I am happy to publish information on courses that I feel are valuable and have great information, and this is one of those courses.
What are some of the cons of the Retire Young and Rich Program?
I would like it if more of the information was written so I could skim through it better, but like I said earlier, I have found better ways to watch and listen to videos. Some of the information in the course is also a little old. When this course was created, the housing crisis had just happened and there was a different market for homes and tax liens. However, they offer live training classes every week and live calls every week that make up for that. I have been in contact with the support staff for the program and they have been super responsive and helpful in pointing me where to find things and how to use the program. I also see Ted still investing in tax liens today, which shows me this information is not obsolete.
How can you get more information on the course and tax liens?
If you want to check out Ted Thomas and his programs, you can learn more from his free webinar. He offers a lot of free information just like I do, and also many different programs and price points depending on what you are looking to learn and how quickly you are looking to learn. Full disclosure, I get paid a referral fee for anyone who signs up for his courses. However, I only endorse courses I have personally tried and think are valuable. I may have to see if I can buy some rentals in Florida using tax liens!