Discover the Wisdom of Buying Tax Lien Certificates with a Corporation.
Yes, it's true that you stand to make a whole lot when you buy tax liens and tax deeds. On the other hand, if purchased incorrectly, you could lose a lot more than just the shirt off your back.
Typically beginning investors do not realize that when they purchase a tax lien or tax deed in their own name they will be held personally liable if anything should go wrong with the property. Personal liability isn't restricted to just personal injury cases. It also includes environmental issues, surviving liens and a host of other harmful yet unforeseen problems.
In my opinion and experience the investor can usually side-step an array of unforeseen yet potentially problematic scenarios by shifting the liability to a corporation or legal entity. I said "usually" because if the corporation is not established and managed correctly courts can pierce the corporation and hold the owners and/or shareholders liable. This can happen if the court determines that the legal entity formed was nothing more than just an 'alter ego' of the owners and/or shareholders.
To avoid being labeled an 'alter ego' corporations must setup separate bank accounts, hold regular corporate meetings, keep a record of meeting minutes and above all keep business dealings separated from its shareholders and/or owners.
Now I'm not an attorney but I've discovered that it would be a good idea to seek the guidance of an attorney for help on selecting, creating and maintaining a legal entity. Failure to create and maintain the legal entity correctly could allow its shareholders and/or owners to be held responsible if anything should go wrong.
Generally an attorney will instruct investors to purchase and sell real estate with an S-Corporation (small corp) or C-Corporation. The attorney will also encourage investors to use an LLC or Limited Liability Corporation as a holding entity.
So in practice investors would buy tax lien certificates and tax deeds with an S or C Corporation. Once they become the owner of the property they could either sell it or rent it. If the investor decides to keep the property they usually will maintain ownership of that property in an LLC. This allows the investor to collect rental income while the property appreciates.
In conclusion, I want to stress how important it is for you to seek the guidance of an attorney when selecting, creating and maintaining a corporation or legal entity prior to purchasing tax lien certificates and tax deeds.
Below you will find a collection of the latest user questions and comments relating to buying tax lien certificates with your business corporation.
Steven E. Waters is an experienced and active investor of tax liens and tax deeds, author of "Creating Wealth Without Risk™" and acting president of Tax Lien University, Inc.
Tax Lien University, Inc. is an educational organization, and individual performance depends upon the individual skills, time availability, and dedication of each student. Testimonials included may not represent typical results. Unique experiences and past performances do not guarantee future results. Tax Lien University, Inc. its owners, employees, and affiliates do not give investment or financial advice and are not licensed as brokers by or registered as advisors with any agency. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.
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Tax Lien Certificate States
Research all fifty (50) states to determine which offers the right interest rate, redemption period, and more.
Tax Lien Certificate Reports
Below is a list of free articles on how to profit with tax lien certificates, tax deeds, and more.
- What are Liens
- The Effects of Liens on Title
- How Lien Priority is Established
- What are Tax Lien Certificates
- How to Buy Tax Lien Certificates
- Learn the Tax Sale Bid Methods
- Buy Tax Liens with a Business
- Over the Counter Tax Liens
- How to get the Tax Sale List
- Profits with Tax Sale Overages
- Tax Lien and Tax Deed States
- Internet Tax Sales
- Tax Lien Profit Calculator
The Rule of 72 Calculator
The rule of 72 says that to find the number of years required to double your investment at a given interest rate, you simply divide the interest rate into 72.
For example, if you want to know how long it will take to double your money at eighteen percent interest, divide 18 into 72 and get 4 years.
Our Educational Materials
Creating Wealth Without Risk™ was designed to help you take full-advantage of safe, certain, and high-yielding tax lien certificates and tax deeds.
Tax Lien University Reviews
"I purchased 3 tax lien certificates at an internet auction for Miami-Dade County, Florida. All three were buildable vacant lots in moderate income neighborhoods. The prices were: (1)$1,018.86 (2) $1,224.90 (3) $1,654.82. I got 18% interest on all of them. I placed 39 bids in total."
- A. Hamad, Florida
June 9, 2011 6:17:32 PM MDT
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- S. Roy, London
"Thank you for your great work. I received you training manuals last night and haven't been able to stop reading. I would recommend this course to anyone who is interested in getting into Tax Lien Certificates."
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