United Tax Liens is presented by Jay Drexel of Marketplace Insider as the best way to start in real estate investments. By learning how to use their proprietary software called Marketplace Pro, Jay promises that you’ll make lucrative real estate investments at the comfort of your home. All it takes is a few clicks on their app to find properties that are 50% to 70% off market value. Sounds too good to be true? I think so, yes. Scroll below to know more.
If you’re wondering what even a tax lien is, think of it as a real estate foreclosure with extra steps. The government can still claim a property (just like in foreclosure proceedings) if they put a tax lien on it, they just give the homeowner ample time to pay for their dues. If the homeowner was able to pay on or before the redemption deadline, then they’ll keep their property. Else, it’s for the government or the person with tax lien rights to take.
Your role here as a tax lien investor is to buy the rights on the tax lien. You’ll want to buy it since you can have a passive income from collecting interest with rates that can go up to 18%. You can also purchase one for as low as a few hundred dollars. Basically, you’re responsible for paying the outstanding loan amount upfront plus the penalties. You’ll earn the principal and interest once the homeowner makes their property tax payment. There’s also a possibility of assuming ownership on the property.
Generally, tax liens are sold via public auction. You’ll get the winning bid with either offering the lowest interest rate or the highest cash amount. It all depends on the competition per property.
With United Tax Liens, you don’t have to go through the bidding process yourself. No need to bookmark the auction sites that differ per state, their Marketplace Pro software already got you covered. They also have educational courses and coaching offers that you can buy to help you get started with tax lien investment. The topics taught in their courses and coaching include how to buy tax liens online, how to avoid the infamous “beginner trap” in tax liens, and four crucial things to check when evaluating a tax lien deal.
Is it worth it to pay United Tax Liens for their software and consulting offers? Personally, I’ll say that it’s not worth it. To start, the convenience offered by their proprietary software is not enough to warrant its expensive cost. Adding a usually online auction site to your browser’s bookmarks can also be done with a few clicks and is free-of-charge. Reading the info from there is not that complicated too, no need to pay for a software.
Not doing the bidding process yourself may sound good, but it has its downsides too. The most glaring one is that you’ll not be able to maximize your returns. As expected, United Tax Liens will take a significant chunk of the profit from their tax lien offers. In the long run, it’s much better to do the bidding process yourself.
If you’re a beginner, it’s also much advisable to keep your tax lien investments within your state. To learn the nuances that differ per state, it’ll be better to learn from someone locally. You can ask from real estate forums too first before buying any expensive courses. It’s very probable that you don’t need a thousand-dollar course like the ones offered by United Tax Liens to learn.
Most importantly, you need to know that tax lien investment is a high risk endeavor. Hence, this is my number one reason why I won’t consider paying United Tax Liens worth it. Sure, it could potentially be a lucrative one. However, the risk of it being the opposite is very high. There’s multiple ways to waste money and effort here. One is buying a tax lien for properties that have a lower market value than the amount of taxes due linked to it. In such a case, the homeowner doesn’t have much motivation to pay their property taxes and consequently, you’ll not get any principal and interest at all. Imagine doing all the due diligence but still losing money, that’s essentially the reality of such investment. It’s more like a gamble, TBH.
Finally, the possibility of taking ownership on the property as the person with tax lien rights isn’t that good as it sounds. The legal fees could be expensive and/or you could face problems in securing the property’s title. Worst case scenario, you won’t be able to complete the foreclosure proceedings before your tax lien rights expires.