Locating an IRS tax lien is the easy part. Locating a property that is worthwhile, especially in today’s market, is a little more tricky. Here are three different ways to locate pending IRS tax lien sales that are worthwhile to buy…and find them for FREE!
First…here’s some basic information…
IRS Tax Lien Sales Are…
When there are back taxes against a property, the government holds an auction for an IRS tax lien that was placed against that property in order to get back the delinquent taxes. The auctions are usually held by the sheriff’s office or the tax collectors office.
There are two distinguished ways for which the government can collect those delinquent taxes. One of which is the IRS tax lien sale and the other is called a tax deed sale.
In regards to an IRS tax lien sale, the person investing is actually purchasing the lien itself. The new lien holder, after receiving their certificate at the auction, is now entitled to collect payments on the back taxes at a high interest rate. Also, the investor has the right to foreclose on the property if the taxes go unpaid.
In regards to a tax deed sale, it’s the real estate itself that goes on the auction block. The person who wins the bid on that property takes possession in the form of a tax deed.
Either way you decide to go; IRS tax lien sale or tax deed sale, you will begin the process the same.
First you need to find properties that have tax liens against them.
IRS tax lien records are recorded
Commonly, tax liens are recorded and maintained at the state level. As an investor, this means two things:
1. It may require a little legwork as these databases are seldom found on the internet
2. If that is the case then there is a much greater chance that you will find properties that are worthwhile to invest in.
In general, if it is easy to find an investment opportunity, it probably will be of less value. You should be smart and look for properties that have problems and search where no one else is looking. The better deals seem to be ones that not too many people are aware of, or the ones that no one knows what to do with.
Here’s how to find IRS tax lien properties in your state…
1. The county recorders office
This would be the place where public records are recorded such as wills, mortgages, deeds, notices and state and federal tax liens.
3. Local Newspaper
The local newspaper will give public notice of all IRS tax lien sales upcoming as a part of the sale process.
4. Subscription based list services
This option can cost you some money…so just think of it as a bonus option.
Some of these options are better than others. Will you benefit more if you are speedy in getting the information. You will get a list with plenty to pick from by just doing a Google search.
Lastly, but very important…Always, always, always do your homework prior to attending any auctions for an IRS tax lien sale.