Make Money Easy For You

When to Buy a Tax Sale List

One of the first things that you have to do to invest in tax lien certificates or tax deeds is to get the list of properties that are in the tax sale. Sometimes you can find this list online, on the tax collector’s website. In most counties the list has to be published in the local paper 2-4 weeks before the sale. In states where tax sales are held on the municipal level, most of these lists will be small (less than 100 properties) and easy to manage. But in large cities and in states where tax sales are held by the county, these lists can be quite large. Although you can get these lists for free, there are times when you will want to pay for a detailed tax sale list from a tax sale list provider.

The tax sale lists that you get from the municipality or county do not always have the information that you need. Often, they will not include the address or physical location of the property. Usually these lists will only list the tax ID or parcel number, block and lot, owner of record, and amount due on the properties in the tax sale. It will not tell you things that you need to know before bidding on the property like: the acreage, type of property, assessed value, last sale price, and whether or not there is a mortgage on the property. To find out this information you can either go to the tax collector’s or tax assessor’s office and look it up yourself, or you can buy a detailed tax sale list that provides all of the tax assessment information, including the physical address of the property.

For smaller tax sales you may want to buy a detailed list. You might think that since the list is small, you could save the money and look it up yourself. I have found that this process is time consuming and that for small lists I am better off buying the detailed list. It saves me a lot of time in my due diligence; I get all the information that I need; and I only have to go out and look at the properties. For larger lists, I would rather do my own research. Detailed tax sale lists that are over 500 properties can cost over $50 and lists that are over 1000 properties can cost over $100. Large counties and counties with big cities can have lists of a few thousand properties and that can cost a few hundred dollars. So how do you decide whether you should buy the detailed list or do the research yourself for these tax sale lists?

First remember that if the original tax sale list has 1000 properties, there will probably be only 500 or so properties left on the day of the sale. Since most tax sale list providers do not update the lists that they have for sale, you will have to purchase the detailed information on all 1000 properties even though you will probably only use half of the information. If you choose not to buy a detailed list, then you may be doing research on a lot of properties for nothing, since half of them will not be in the tax sale.

So here’s what I do. If there is an easy way to get the assessment information that I need, that is if it is available online, I wait until about 4 or 5 days before the sale, get an updated list from the tax collector, and then I get the assessment information on the properties. To make it even easier, I limit the properties that I research to only certain areas that I’m interested in investing in. I may limit it to only 3 or 4 townships in the county and to only certain types of properties. If the assessment information is not that readily available, I’ll buy the detailed list. Some list providers will allow you to filter the list by property type, thus you only buy information on the type of properties that you are interested in.

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Don’t Forget to Take Care of Your Money When Attending a Tax Auction

Summary:
Investors can easily overlook the problem of transporting money when attending a tax auction out of state or even the country. Here are a few quick reminders.

Article:
In the business of tax liens, tax certificates you’ll find that you end up handling large amounts of money. You’ll need the cash to pay for properties picked up at auction, daily expenses and other business related expenses. Sometimes you’ll even end up carrying large amounts of cash with you as you travel to new areas to participate in a tax auction. This can be a hassle and would cause anyone to worry.

One of the easiest ways to save yourself this hassle is to make sure you have a bank account with a bank that exists in the area you are heading to. You can easily research online to find out which banks exist in the area you are heading to. However it’s not always possible to set up a new account for each place.

Having your home bank issue you one or more Cashiers’ Checks can be an easy way to transport money. Usually these are secured checks that can be cashed by you at any bank or business, anywhere, that will accept them. It’s good to know that typically Cashier’s Checks under $5000 won’t have a hold placed on them when you cash them. There have been scams with fake Cashier’s Checks so you may find that you have a little trouble cashing them when you need them. In the business of money there are a lot of variables.

Some investors may even cross the border between Canada and America in their search for tax auctions to attend. Bringing money across the border can be a tricky process. You’ll want to declare any large amounts that you have with you, whether in cash or check or even in the form of gold bars.

Under our new legislation you’ll be glad to know that there is no limit on the amount of money you can bring into and out of Canada, but you must absolutely report it to the Border Services Office when the amount is greater than $10,000. Reporting the amount is done in person at the Canada Border Services Agency Office and you will need to fill out Form E677, Cross-Border Currency or Monetary Instruments Report-Individual. You can print out this form from the Canada Border Services Agency website. Fill out this form, sign it and hand it to the border services agent at the nearest border office where you are crossing. If you don’t declare they could legally seize the money and give you a fine.

This can be equally important whether you are coming or going. Have a bank account set up, so you can put in and take out any money you make or need. Always treat your border crossings with care. As long as you declare the amount you bring with you and cooperate with procedures the border crossings should go smoothly.

Attending a Tax Auction and Winning that Property

Summary:
Don’t get caught up in a bidding frenzy at tax auction. The smart way to pick up property is to stay calm and have a good knowledge of the rules of auctioning.

Article:
When attending a tax auction, you have to have a system, you have to be organized. Once the auction starts they don’t wait for you to get ready. The property is sold to the highest bidder and whoever has their paddle up when bidding. Be prepared. Before the auction research properties on the property list, make notes and take photos. Also it’s a good idea to decide before hand your maximum bid on each property.

Investors should be aware of other people at a tax auction. As soon as they get a hint that you know what you are doing they will try to ask a lot of questions and can distract you at the auction. So it’s possible to miss out on a lot of good bidding. Some people get really confused. They will end up bidding on everything that comes up. Some will even end up bidding against themselves. It really pays to be calm at the auction and not get caught up in the frenzy. You’ll easily be able to see who did their research on a property and who didn’t. Don’t be afraid to give yourself a pat on the back when you see someone in a bidding frenzy over property you researched and realized just wasn’t worth the money.

Many people attending auctions don’t know the rules of auctioning. It is often a requirement that you have the money on hand to pay for the property within an hour of the auctions end. Lots of winning bidders can’t fulfill that requirement and so the property goes back up for auction. Don’t just leave at the end of the auction. Hang around for an hour for the chance to bid on properties that come back up again at the after auction sale.

Once you have your property what do you do with it? Some investors feel like they need to flip their property almost as soon as they buy it. This is great. If you can find a buyer or a realtor that will pick up the property from you for a few thousand more in a couple days then go for it. However there is nothing wrong with holding on to a property for a little while. In a good market will just keep accruing value and you can take your time in putting it up for sale with a good realtor.

The thing to remember with picking up property at tax auction is to get it for less than it’s assessed worth. The assessed worth and minimum bid on each property will be easy to find on the property list. Pick up a property below it’s assessed worth and sell it at its assessed worth or a little bit higher than you won it for and you’ve made a profit. As long as you follow this rule when purchasing a property at auction you have a good chance of selling the property in the long run with a high percentage of profit.

Read more: Don’t Forget to Take Care of Your Money When Attending a Tax Auction

Tax Preparation Help: 5 Tax Deduction Myths

There are a wealth of tax deduction myths, rumors and plain old wives tales during every tax season. Many opt not to get professional tax preparation help and file their own taxes based on misinformation, only to regret it later when the IRS comes calling. It is sobering of find out they filed using mythical deductions and write offs. Here are 5 big ones to look out for:

#1 – My Medical Expenses Are Tax Deductible.

If they exceed 7.5% of your adjusted gross income (AGI)Medical expenses may be tax deductible. However there is a catch, which is that you can ONLY deduct the amount of out of pocket expenses that are greater than the 7.5% threshold. A lot of medical expenses will be necessary to make this work.

Be advised: If medical expenses are reimbursable, they are not deductible even if you did not get reimbursed.

#2 – I must use money from my home sale to buy another residence.

In the old days that was partially true but in 1997, home-sale tax law changed. If the home you sold was your principal residence for at least 2 out of the last 5 years, then you can exclude from tax up to $250,000 in gain (and $500,000 on a joint tax return). Consult a tax professional.

#3 – My mortgage interest will reduce my tax bill

Usually this one is true but not in all cases. To claim a tax deduction for your home loan’s interest, you must itemize and come up with a total that exceeds your standard amount. Those at the end of a mortgage loan term are paying more principal than interest thus don’t get much, if any break in taxes because the interest paid is so little.

#4 – I Have to File a Joint Return Now that I’m Married

This is false. You always have the option of filing “Married Filing Separately.” Just be cognizant that this choice will normally result in you paying more in taxes. But this can be to you and your spouses advantage.

An example, if one spouse has considerable medical or miscellaneous deductions, those items might never be used (with a combined income) as a deduction if they do not meet the 7.5% and 2% minimum requirements respectively. Review your individual cases and see if filing separately might allow you to then take advantage of those tax deductions. Ask a tax preparation professional. Incidentally, you can change your filing status annually.

#5 – My Diet Program Is Tax Deductible

If certain requirements are met a weight loss program may qualify as a tax deductible medical expense.

1) Your physician must have prescribed it! 2) It is intended to treat a particular disease. Obesity IS considered a disease, so it might count if you are legitimately obese. If you’re not obese but need to lose weight to lower your blood pressure, that might make the program a tax deductible expense. Word of caution: the overall cost still has to meet the 7.5% requirement as indicated above.

Seeking qualified tax preparation help is a wise decision when it involves filing your taxes and the eligible tax deductions you will qualify for. Tax return preparers, CPA’s or Tax Attorneys are available online or off to advise you on tax deductions. Use their tax preparation help to seperate fact from fiction.

Read more: Tax Preparation Help: 5 Tax Deduction Myths

Step Three to Building Your Profitable Tax Lien Portfolio

Your first step to building a profitable tax lien or tax deed portfolio was deciding why you want to invest. This will determine how you are going to invest. Will you invest through a self-directed IRA or with after tax funds; in your own name or through an entity; in tax liens, tax deeds, or redeemable tax deeds? Once you determine how you are going invest, the next step is to decide where you will invest. What state and county are you going to invest in?

Once your done with steps one and two, the why and the how, it’s time to concentrate on the what. The third step to building your profitable tax lien portfolio is finding the tax sale information. You need to find out when and where the tax sale is held and obtain a list of properties that are in the sale. For most areas this step will be easy, you just need to know where to go and who to contact to get this information. Sometimes you will have to pay for it and sometimes you will be able to get it free of charge.

Each state is a little different in regard to how the tax sales are conducted and who is responsible for them. In some states you’ll have to contact the county tax collector, in others it could be the county treasurer, or the county sheriff, or there could be a separate county office just for this purpose. I recommend that you first contact the county tax collector, or whoever is responsible for the tax sale and ask for the tax sale information. Ask for a list of tax sale properties. Usually you can get this list for free and sometimes it may eve be available online.

All tax sale lists are not created equal. Some lists will have all the information that you need to do your due diligence (the next step in the process of building your profitable tax lien portfolio) and some will only list the tax number, block and lot, owner of record, and amount due for each property in the sale. The physical address of the property may not be included. If that is the case, you have two choices, you can buy a detailed tax sale list that includes all of the information that you need, or you can look the information up yourself, which can be a very tedious process.

Very large detailed tax sale lists can be quite expensive, even a few hundred dollars, so if there are a lot of properties in the tax sale you would be better off to limit the amount of properties that you are interested in and look up the information that you need yourself. You can limit yourself to a particular area, or to only certain types of properties to make the next step in the process a little easier. If the list is not that large and costly, you may want to buy the tax sale list from a tax sale list provider. It will save you lots of time in doing your due diligence.

Read more: Step Three to Building Your Profitable Tax Lien Portfolio

Intro to Rock Climbing, Part 2

There are many challenging extreme sports but nothing will challenge you physically and mentally as much as rock climbing. Rock climbing is a test of stamina, patience, skill, and willpower. Your hands will feel like giving up right into the middle of the climb on a vertical rock face but you can’t stop. You just have to get the strength from somewhere and move on. The moment you lose focus, it could very well mean the end of it all. This is how and when accidents happen.

Rock Climbing is a sport that entails climbing up a vertical rock face or a steep rock face. Most of the climbers generally use gear and safety equipment, which have been specifically designed to suit this purpose. You need to be physically and mentally in top condition and also have the necessary knowledge of different climbing techniques. This knowledge will be useful when you start the climb. There are some people who might not carry ropes with them but it is something you can’t try on your own especially if you are a beginner. You need to be a real pro to try it and sometimes even real pros have accidents.

Over the years, rock climbing has become a challenging extreme sport although it still is a niche area. A variety of grading systems have been introduced in the recent past to compare the various difficulty levels in climbs. The climbing techniques have improved considerably over the years and so has the equipment. Those who have a passion for rock climbing live it as a part of their lifestyle and not as a sport. The challenge of beating all the odds to reach the top is the prize itself.

In rock climbing most climbers go up in pairs. One of the climbers has to lead and the other follows and is known as the belayer. The belayer’s job is to feed the rope to the lead climber with the help of a belay device. Once the lead climber reaches a certain point in the climb, he/she places protection and climbs higher and again places protection all the way up to the top. if the leader falls, the belayer has the option of locking off the rope.

The lead climber and the belayer will have to attach rope to their climbing harness, and this is done by tying it in a double bowline knot or a figure-of-eight knot. The lead climber can place a permanent or a temporary protection on the rock. The protection uses spring-loaded camming devices, which can be set into the cracks visible in the rock face. In the case of sport climbing, protection used is in the form of a metal loop also known as a hanger. These hangers can be secured to the rock with the help of expanding masonry bolts or by using glue-in bolt systems.

The lead climber will connect the rope to the protection with the help of carabineers. Due to any reason if the leader falls, then he will fall twice the length of the rope from the last protection point. If the belayer is unable to lock the belay device immediately then the fall can be longer. During the fall, the belayer can arrest the rope because the rope has to run through sharp curves in the belay device that create enough friction to stop the rope.

There are basically two types of rock climbing – free climbing and aid climbing. In free climbing, you will have no support whatsoever like ropes, harnesses, belays etc. In aid climbing, which is considered safer than free climbing, you can use safety equipments to climb.

Read more: Intro to Rock Climbing, Part 2

Let’s take a look at tax auction terms

Tax Certificate Auction Terms

In the tax deed/tax lien business you’ll hear a lot of terms bandied about. Take a quick look at the terms list we’ve compiled to familiarize yourself with their meanings…

Folks, you’ll find it’s a lot easier to understand the game if you know what some of the common real estate terms mean. Take your time to get familiar with the list of words you are most likely to come across.

60 day notice: In the tax auction/tax lien business this is the notice you attempt to turn into property owners when you are beginning the process to request ownership of their property’s tax deed. This only applies to certificate states.

Account Numbers: (tax account numbers) These are numbers assigned to each property so the county can keep track of the property for tax purposes.

Appraised Value: What the appraiser thinks the property is worth; in other words the current market value of the property.

Assessed Value: This was the county tax assessor values the property at for tax purposes. This is what they use when calculating property taxes each year.

Certificate State: A state that auctions the tax certificates on properties rather than the tax deeds on a property. The bidder pays the back taxes on a property and takes over the right to hold the certificate on that property and require payment.

Deed State: A state that sells the tax deeds on property that owes back taxes. There is less wait time to move forward than with a certificate state because you are buying the deed rather than the certificate.

Deficiency judgment: This is a judgment against the property owner demanding payment of whatever is left due on a loan or back taxes after their property is foreclosed.

Improvement Value: If the value is zero, that means its just land and there are no improvements. This is typically the value of whatever has been added to the property such as a house.

IRS Liens: When someone doesn’t pay their federal income taxes the IRS can put a tax lien on their property and foreclose on the property is the taxes aren’t caught up. The property is sold at auction to try and recoup the taxes and fees owed to the IRS.

Land Value: is the estimated total price of both the land and any improvements made on it.

Plat Map: is a map dividing an area, town, county or state into parcels of land by ownership.

Promissory Note: a legal contract between a lender and a borrower that states the terms and conditions of the loan and how the loan is to be repaid.

State Statute Books: are put together by the state treasurer and contain all the laws and rules concerning property ownership and sale in the state. This is where you can find information on the state’s tax auction procedures.

Title Company: A business large or small that provides information on other businesses and properties. This is how you find out who to send your notices to and can get more detailed information on properties up for auction by requesting an Ownership and Encumbrances (O&E) Report based on the tax account numbers.

Read more: Let’s take a look at tax auction terms

Own Your Business and Get Sizable Tax Deductions Too!

For entrepreneurs who are running their own businesses and even for those who are planning to set up their own businesses, the self-employment tax deduction could be a huge blessing. By these deductions, many of the expenses that businessmen incur for their businesses could be put up for tax deductions. There are several such heads where self-employed people can win over employees in tax deductions. A preliminary step for availing of these could be use to their social security number as their business tax identification number and to file taxes under Schedule C or Schedule C-EZ.

Though these schedules are often mentioned together, they provide different kinds of benefits, the form for Schedule C-EZ is more beneficial for people who are spending lesser amounts on running their businesses, or people who make profits with their businesses, who run their businesses single-handedly, i.e. without employing anyone else, or those who do not claim home office deductions and don’t report depreciations.

The form for Schedule C is for bigger businesses. Here the taxpayers would be asked about the gross income – this is similar to the form for Schedule C-EZ – but in addition they would be asked in detail about the various heads of expenditure in running the business. But the advantage here is, the self-employed person can report a loss and get that saved on tax too.

Self-employed persons can claim the following tax deductions:-

(i) Equipment Expenditure – As per Section 179, the total cost of all equipment that has been purchased for conducting the business can be shown as tax deductible. Equipment such as computers, filing cabinets and furniture are tax deductible. But there is a limiting condition here. The limit is based on the amount that can be shown for deduction. A better idea can be got by referring to the IRS Publication 946, as this limit is changed quite frequently.

(ii) Travel Expenditure – All the expense incurred during traveling for the business is also tax deductible. This includes the meals and lodging that go with the travel. It is necessary to produce the receipts and bills of these expenses and to state the purpose of the travel.

(iii) Health Insurance and Social Security Taxes – All health insurance premiums paid for the self-employed person and for his/her closest family members can be claimed for tax deduction. A part of the social security tax can also be deducted from the total income. This deduction is available on Form 1040 and not on the Schedule C.

(iv) Self-Managed Retirement Benefits – Self-employed people secure themselves for their retirements with the Keogh or the Simplified Employee Pension plans. Upon filing the Form 1040, the payments made for these plans could be shown for tax deductions.

(v) Home Offices – Self-employed people who are running their businesses in their homes could claim home office tax deductions. These could be whole or part of the expenses incurred in the maintenance and upkeep of the home office. Even if the person conducts most of the business outside the home office and uses it only for simple chores like book keeping, its expenses could be claimed for tax deduction.

Read more: Own Your Business and Get Sizable Tax Deductions Too!