Tax Lien Certificates: Investment Strategies by Ted Thomas

Introduction

• Speaker: Ted Thomas
• Background: Former airline pilot turned real estate investor
• Main Topic: Breaking free from financial worry and achieving financial freedom through tax-defaulted properties

Ted's Journey into Real Estate Investment

• Initial Career: Airline pilot
• Transition: From pilot to defaulted real estate and tax liens
• System Developed: Writing letters to buy foreclosed houses, resell them
• Discovery: Tax-defaulted properties sold for 10-20 cents on the dollar
• Outcome: Left foreclosure business, focused on tax-defaulted properties

Introduction to Tax Lien Certificates

• Definition: Government-issued certificate for unpaid property taxes
• Process:
  • Property owners must pay taxes
  • Non-payment leads to a lien on the property
  • Government can either issue a certificate or confiscate the property
• Benefits: Investors can earn 16-18% returns while owners stay in their homes

Buying Tax Lien Certificates

• Where to Find Them: County lists, newspapers, online
• Rates: Up to 18% in states like Florida and Ohio
• Safety: Investment protected by property tax code; high likelihood of return due to county backing

Risks and Safety Measures

• Safe Aspects: Invest directly with the county; money returned when taxes are paid
• Risks: Buying without due diligence; properties in bad neighborhoods
• Advice: Always verify the property’s condition and location

Online vs. Local Property Investment

• Modern Convenience: Property information is available online
• Recommendation: Start within your state due to familiarity

Highest Interest Rates by State

• Key States: Florida (18%), Arizona (16%), Maryland (up to 24%)
• Strategy: Compare rates in neighboring counties

Redemption Period

• Variation: Typically 2-3 years, varies by county and state
• Due Diligence: Check County rules before purchasing

Due Diligence Before and After Purchase

• Steps Before Buying: Research the state, county, and property details
• Post-Purchase: Monitor for redemption and ensure property validity

Finding Tax-Defaulted Properties

• Resources: County websites, local newspapers, directories

Selecting the Right Property

• Criteria: Location, neighborhood quality, property condition
• Strategy: Opt for high-quality properties in good neighborhoods

Tax Lien Certificate vs. Property Ownership

• Ownership Rights: Certificate does not grant property rights unless redeemed
• Investment Focus: Primarily for high interest rates, not immediate property acquisition

Economy and Market Cycles

• Impact: Property values and sales affected by economic cycles
• Investment Strategy: Buy during market lows to maximize long-term gains

Training and Educational Resources

• Offerings: Classes, workshops, online courses
• Advice: Invest time in learning and understanding the system

Beginner Recommendations

• Research: Start with local counties and gather detailed information
• Next Steps: Utilize available classes and resources for deeper learning

Conclusion

• Final Thought: Ted emphasizes thorough research and strategic planning in tax lien certificate investment