My New South Carolina Tax Liens E-Book on Kindle

My New South Carolina Tax Liens E-Book on Kindle

As my e-mail newsletter subscribers know, I’ve recently completed my second Kindle e-book.  My first one was a strategic look on how to buy Florida Tax Lien Certificates including where to focus your efforts to boost your yields and maximize the safety of your investment. Although the title suggests it’s just a beginner’s guide, I’ve included specific advice for more ‘seasoned’ Florida tax lien investors.

Now, I recently completed the second of my tax lien investing guides.  This one is on investing in South Carolina tax liens and you can find it here on Amazon.  South Carolina is one of my favorite states to buy tax liens in–the rates are decent at 12%, the real estate market is fairly strong, and the overbid style of the auction keeps alot of your competition away.  Because you might be investing more than 50% of the value of the property, it’s a higher risk state and you absolutely must perform good due diligence before you attend the auction.

The first auction begin during the first week of October and continues in the different counties for the next three months.  As always, if you have any questions, you can subscribe to my newsletter for free and email me anytime directly from there.

 

 

The ONLY Five States Where You Should Buy Tax Lien Certificates

The ONLY Five States Where You Should Buy Tax Lien Certificates

I get the questions all the time…what are the best states to buy tax lien certificates in?  Like all real estate investments, the natural answer to this is to only buy delinquent tax certificates in areas that you know best—your local market or areas you have other real estate investments in.  However, the explosion of online auctions and wealth of due diligence information on the web has now given us the ability to invest in just about any state that sells tax liens.  I’m not limiting my buying to just Arizona and Colorado which are near me, I now can buy anywhere in the nation.

So, now, there is competition among states for investors—what separates them are their statutes governing tax lien investing (do they favor the investor or the taxpayer?) and the ease of buying the liens (are the auctions online and is the assessor’s information up-to-date?).  Feel free to post your comments and reasons why you think I’m wrong, but below are the only states I feel you need to invest in.

Florida Tax Lien Certificates

Florida tax lien certificates should be at the top of everyone’s list for many reasons: the ease of buying liens at the online auctions, the laws and processing of tax payments are very investor friendly and the online information from assessment data to tax data is very current and accurate compared to other states.  Florida sets the bar for all the other states that sell their property taxes and will set the trend going in the future.  The main downside that there is a lot of competition out there the bring rates down quite a bit—but with Florida being the largest tax lien certificate market out there, you can usually find a niche to buy at higher rates. You can also find out more about Florida tax lien certificates in my Kindle e-book called: A Beginner’s Guide to Investing in Florida Tax Lien Certificates.

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South Carolina Tax Lien Basics – The Overbid

South Carolina Tax Lien Basics – The Overbid

This year’s South Carolina tax lien auctions are finishing up.  But, for those of you heading to the auction or just want to learn more about this great state for tax lien investors, I wanted to summarize how the penalty rate works in South Carolina. You can also find more detailed information in my Kindle e-book on South Carolina tax liens.

Penalty Rate

Unlike most states, South Carolina doesn’t charge a default interest rate on the outstanding tax amount.  Instead, they pay a 3% penalty at the beginning of each quarter after the sale.  So, if you purchase a lien at the October sale, you’ll automatically receive the 3% if it were to redeem the next day.  However, you will not receive additional interest until January when you’ll earn another 3%.  You earn this 3% penalty each quarter for four quarters or a total of 12%.
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Pros and Cons of South Carolina Tax Lien Investing

Pros and Cons of South Carolina Tax Lien Investing

One of my favorite investments are South Carolina tax liens. So long as I performed good due diligence, I’v made great returns on both the redemptions and those tax deed I received. However, like all tax lien investing, there are risks and negatives in the South Carolina tax lien market that we all need to be aware of. You can also checkout my Kindle ebook on SC tax liens: A Beginner’s Guide to Investing in South Carolina Tax Liens

Pros of Investing in South Carolina Tax Liens

  1. Short Redemption Period. The redemption period (the time the tax payers are given to pay their delinquent taxes before going to tax deed) is only one year in South Carolina. Therefore, taxpayers have a good incentive to pay their liens quickly and lock in your return for you. Also, if the lien remains unpaid, you get deed to the property just a few weeks after the expiration of the redemption period. You can then work to secure the property, get the title cleared up, and get the property sold or rented before it deteriorates or sits there vacant.
  2. Foreclosures are handled by the County. The county that you are investing in handles all of the title searches, noticing and redemption notifications of all of your South Carolina tax liens for you. That means you can sit back for the whole year and not worrying about meeting specific deadlines to notice the delinquent taxpayers yourself. And, you’re not paying some attorney to do this work either.
  3. Overbids. Because you bid over and above the tax amount at the tax lien auction, you can put a lot of money to work in each asset and both the overbid and the tax bid amount earn an interest penalty of 12% (There is a cap to this which we will discuss in a later article/blog post at taxliens.garrettcapitalmanagement.com). Plus, larger overbids usually relate to a higher potential to receive the tax deed uncontested if you a looking for a play on the property versus just the redemption.

Cons of Investing in South Carolina Tax Liens

  1. Quiet Title. In most cases if you receive a tax deed to a property, you’ll need to go through what is called a quiet title action. Basically, you’ll higher an attorney who will go thru a judicial process to ensure that all potential interests in the property will not have a claim to the property. This can take a year or more and can be expensive (3-5K for an average case). But, you’ll need to do this if you want to sell the property free and clear.
  2. Foreclosures are handled by the County. Note that this is the same #2 in pros of South Carolina tax lien investing. While it may be nice that the county handles all of the title work and noticing, then do make mistakes. I’ve had a couple properties where the county forgot to notice either the mortgage holder, the heirs to a property, or even the IRS. Unfortunately, you can’t do anything about this and it will lead to either a refund without your 12% interest penalty or a long and drawn out legal battle as you are going through the quiet title action.
  3. High LTVs. I use LTV (Loan to Value) for lack of a better term. Because South Carolina is an overbid state, you can bid as much as you want to at the auction. The value of the property does not limit you to bidding 80%, 90% or even greater than 100% of the property’s market value. This both limits the amount of penalty interest you can earn and increases your risk for a profitable sale if you receive deed to the property.