Tax Foreclosure Fortunes:

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Kerry Cross
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1 Manual to the Audio Tax Foreclosure Fortunes: How You Can Cash In on Tax Deeds Without Going to The Tax Sale Created by Cody Matousek And Joanne Musa, The Tax Lien Lady This is not a free e-book 2008 Tax Lien Consulting LLC, All rights reserved This book is a free e-book. You have my permission to pass it on to your family and friends. This is just the first 5 pages of the full manual, which is available at If you would like to make money on your referrals, please join our affiliate program at The information provided in this e-book is for informational purposes only. It is meant as a guide for investing in tax deeds by collecting excess proceeds from the tax sale. This investment strategy cannot be used in all states. The information in this e-book does not take the place of accounting, legal, financial, or other professional advice. For advice in these areas you should seek the service of a professional. 1

2 Introduction What you re about to learn is an advanced method of investing in tax deeds. This method does not work in all tax deed states, but only those states that have no right of redemption. In other words, it does not work in redeemable deed states. And it only works in the states that give the excess proceeds back to the delinquent property owner. To find out if this method of investing will work in your state, call the county tax collector, or whomever is responsible for the tax sale and ask them what happens to the excess proceeds or over-bid from the properties that are sold at the tax sale. It is a little known fact, that in many deed states, the excess proceeds that are collected at the tax sale are handed back to the delinquent taxpayer. In some states this can be automatic, but in most states the property owner needs to apply to the county for the excess proceeds. Knowing this information and how to use it can make you lots of money. Especially in competitive tax deed states where the price of tax foreclosed properties is bid up close to market value. Here is the system in a nutshell. You find properties that are going to be auctioned at the next tax sale. You do your due diligence to see which properties you are interested in. You contact the owners of those properties and find out if they are letting their properties go to sale. When you find a property owner who is walking away from his or her property and letting it go to sale, you get them to give you a Quit Claim deed for the property. You register that deed before the tax sale. You let the property go to sale. You apply for and collect the excess proceeds. The only difference between this system and other types of tax deed investing is that you let the property go to tax sale. If you were investing in deeds the normal way, you would purchase the property at the sale. You might have to pay thousands of dollars to get the property and then you would be the property owner. And there is another method of investing in tax deeds where you would try to purchase the property from the owner before the sale and pay off the taxes to keep the property out of the tax sale. Either way you would wind up owning the property. If that is your goal, to own property, than this system of investing is not for you. This is not a way to own the property; it s a way to make money on the property without owning it or going to the tax sale. You only own the property for a very short time, once it is sold at the tax sale; you are no longer the owner. But that is of no consequence to you, because now you can put money in your pocket, and you paid little or nothing to get the property in the first place. So now let s talk about this system of tax deed investing a little more in depth. 2

What are Excess Proceeds When property is sold at a tax sale, it s sold in order that the county or municipality can get their tax money and meet their budget.

3 What are Excess Proceeds When property is sold at a tax sale, it s sold in order that the county or municipality can get their tax money and meet their budget. But most tax sales are auctions; the starting bid price is usually at least the amount of back taxes, with added penalties and costs of the sale. The price of the deed is bid up and in some states can be bid up quite high. In competitive tax deed states these properties can be bid up to 5 even 10 times the starting bid amount. The amount in excess of what is owed on the property is the excess proceeds or over-bid as it is sometimes called. In most states the delinquent property owner as well as any lien-holders on the property, can claim this money. Let s look at an example of a deal that Cody did in Santa Cruz, California. The property was listed in the tax sale with a minimum bid of $19, After locating the owners and establishing a good relationship with them, Cody found out that they had lost their jobs and where finding it very difficult to find another company needing their special skills. To make ends meet they only paid out what it took to live on, food, clothing, all the bare essentials. They had most of the mortgage paid and kept up with payments as best as possible, but didn t know that not paying the taxes would result in they re home being auctioned in a tax sale until it was to late. They had borrowed too much already and couldn t gather enough for the redemption. It was a very hard time for the couple that owned this property. They where planning on leaving the property to move into a mobile home park. The down payment for the mobile home was $500. That is what was given for signing over the Quick Claim deed, plus the mailing costs and cost of notarizing the deed. The home was a single family home in great shape, secluded and in a very desirable area. This property sold at the tax sale for $57, Cody was able to claim the excess proceeds of $37,900. 3

4 Little Known Secret The reason that this system of investing works so well is that not everybody knows about excess proceeds. If property owners knew that they were entitled to the excess proceeds, they wouldn t hand over the deed to their property before the tax sale, but that s exactly what you re going to ask them to do. Not all lien-holders are aware of this little known secret either, but don t count on that; part of your due diligence is to make sure there aren t any substantial liens on the property. Even if there are lien holders, as the owner of the property with a valid deed, you are first in line to get paid from the excess proceeds. Most mortgages and other liens get wiped out at the tax sale. 4

5 Step One: Finding the Tax Sale Information Finding the tax sale information is actually a very easy step, but with this type of investing you need to have the tax sale list a few weeks in advance of the tax sale. So what is the best way to find the tax sale information so that you have the time to research the properties, contact the owner, and get a quit claim deed recording at least a couple of weeks before the sale? The best way to do this is to contact the person or department that is responsible for the tax sale. In many cases this will be the county tax collector or county treasurer. Simply call them and ask when the tax sale is held (most counties have tax sales only once a year), how you can get a list of properties that are in the sale, and when this list will be available. In some counties you may not be able to get the list until 4 weeks before the sale. So you ll want to do get started right away. This is the opposite of what you would do if you were actually going to bid on the properties in the sale. If that is what you wanted to do, you would wait until one week or less before the sale to do your due diligence because at least half of the properties will come off the list by then. But when you re investing to collect the excess proceeds, you don t have the luxury to wait that long, because you want to have the deed recorded before then. In Tax Lien Lady s State Guide, which is included with this course, you ll find links to the NACO.org web sites for each state. From these links, you can go to the county web sites and find the contact information for the county tax collector, or whoever is responsible for the tax sale. In the State Guide you ll find the information about who is responsible for the tax sale if it s not the county tax collector or county treasurer. Sometimes you can actually find the tax sale information online including the list of tax sale properties. I ve also included some videos in this program to show you how to use the links in the State Guide to get this information. Tax Sale Resources E-book Tax Lien Lady s State Guide included in the full program at Web Sites Additional Programs For those of you who would like more step-by-step instruction on finding tax sale information for tax lien states, and tax deed states, see my Tax Lien Investing Basics home study course. The course is actually the first 2 lessons of my Build Your Profitable Tax Lien Portfolio 8-week training course and you can find out more about it at 5

Frequently Asked Questions about Public Auction of Tax Defaulted Property via the Internet

EL DORADO COUNTY Treasurer and Tax Collector C. L. Raffety, C.P.A 360 Fair Lane, Placerville, Calif. 95667 (530) 621-5800 Frequently Asked Questions about Public Auction of Tax Defaulted Property via the