Tax Lien Investing Self Directed IRALooking for a good investment for your self-directed IRA with little investment dollars?

Consider Tax Lien Investing.

Many of our clients buy tax lien certificates or in some states tax deeds in their self-directed IRA. Tax liens are considered a safe, lucrative, generally small dollar investment with a higher rate of interest. In some cases, investors walk away with a property for only the taxes owed. Investment risks are low provided the due diligence is done and the property is one the IRA owner wants to own.

How Does Tax Lien Investing Work?

Each year, county governments are faced with delinquent property taxes. They are not in a position to float the homeowner who did not pay their property tax. Local governments depend on this revenue to operate their payroll, police/fire departments, maintenance as well as other necessary expenses in order for the government to function. If taxes are not paid within the allotted time period, many governments will issue a tax lien against the property. You can buy tax liens or tax deeds for back taxes plus interest accrued.

Some states hold monthly tax sales, most hold them yearly. Many of these sales are have an online auction process. Some auctions are held at the county assessors office. You can research this through the local county/state you have an interest in acquiring delinquent tax certificates. Thousands of tax sales are conducted every year around the country.

Most counties publish a listing of delinquent tax rolls in the newspaper or online in advance, prior to the auction giving the time necessary to research the property to see if this particular certificate makes sense to your IRA, especially if you end up getting the deed and the property for your IRA. Know what you are buying before you buy!

Understand the process in the state you wish to invest in tax liens. In Florida for example interest starts at 18%. Interest and is a bid down process that can get decreased to as low as 5%. The investor is guaranteed that minimum for the period of time allowing the homeowner to redeem or pay their back taxes and keep their property.

It is important to make sure you let your administrator know that you are utilizing your self-directed IRA to make an investment in tax liens. In most cases the money is due to the tax authority in the county/state your IRA is acquiring the certificate from immediately at the time of the sale. Contact us at with your questions regarding the process of buying tax liens with your self-directed IRA.

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