The 16% Solution: How To Get High Interest Rates in a Low Interest World with Tax Lien Certificates | 
 enlarge | Author: Joel S. Moskowitz
Publisher: Andrews McMeel Publishing
Category: Book
List Price: $26.99
Buy Used: $5.60
You Save: $21.39 (79%)
New (33) Used (44) Collectible (1) from $5.60
Avg. Customer Rating:  49 reviews
Sales Rank: 39544
Media: Hardcover
Number Of Items: 1
Pages: 208
Shipping Weight (lbs): 1.3
Dimensions (in): 9.1 x 7.3 x 0.6
ISBN: 0836280849
Dewey Decimal Number: 332.6324
EAN: 9780836280845
ASIN: 0836280849
Publication Date: November 23, 1994
Availability: Usually ships in 1-2 business days
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Product Description
A comprehensive guide to personal finance and investment explains how to achieve the maximum financial yield in a time of low interest rates and a weak stock market, discussing such options as tax lien certificates and their benefits. 50,000 first printing.
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| Customer Reviews: Read 44 more reviews...
 The 16% Solution August 29, 2008
This will get you started but it has only scratched the surface of what you really need to do regarding the tax lien certificate process. I think this book is best for gauging your interest level to see if you want to explore further.
 Good presentation, easy to read, a little rosy for my tastes March 29, 2008
1 out of 1 found this review helpful
This book rates well with me in terms of presentation and qualified information. I will admit at the front that I have never purchased a tax lien and I would weigh that heavily in terms of the merits of any review of this book. If there are among these reviews some who have purchased tax liens and have not lost their shirt in the process, I would weigh their review ahead of all others.
With that said, I should note that I have a considerable amount of experience in the real estate arena which will validate at least some of my review. Despite this book being presented in a very qualified manner, experience will show that typically the returns presented in investment specific books (particularly those with the anticipated return on its cover) are almost always on the rosy end of reality.
Obtaining liens at this high a rate will inevitably not be as easily achievable as this book presents. That is not to suggest is not possible, as I am quite aware it is. I say this more as a caution because this book spends only a minimal amount of time on risk and otherwise encompasses nearly all its time on the potential reward. For this reason I am in the middle of the road on how I view this book and thus give it 3 stars.
To reiterate, I admit I have not purchased any tax liens, so understand that this opinion is based on what I know of the entire market place of real estate and anticipated returns. If tax liens are of interest to you, this book will in fact provide you with a solid foundation about the intricacies of such dealings.
 Just buy this book if you are interested in Tax Lein Certificates. January 22, 2008
1 out of 2 found this review helpful
This book is great if you want to get acclimated with Tax Liens. I would say the book is superior when it comes to actually giving you numbers for each state and explaining the dynamics in each.
I will say that other books on the subject will educate you probably just as well, but this is considered the standard on the subject and I found it's appendix in the back for each state better than the rest. BOTTOM LINE: I took out every book at the library on the subject, read them all, and then bought this book to keep around.
Great Inro into Real Estate January 13, 2008
4 out of 4 found this review helpful
This book discribes how investors can make money in the tax lien market. Tax liens are those liens attached to your deed when you do not pay your property taxes. Since your municpality needs these taxes to pay for service (fire, police, etc.) and they do not need the real estate, they either sell the liens or the actual real estate (not really covered in this book) at an auction. The investor needs to wait a period of time (Each State is Differnt) and then the investor forcloses on the defaltee either requiring the tax payer to pay cash or take possesion of the real estate to do what he wishes with it.
The four sectons of the book explain the basics of these liens, what they are, how to get them, who to contact, what to look for, where they are held and the basics of how to redeam them. There is also a reference on the individual state laws on how each state handles the leins and what the investor must do.
Mr. Moskowitz gives plenty of exapmples of which states has tax liens (Certificates) and which ones have tax deeds (Real Estate). He explains the pros and cons of each and he explains how to take advantage of each situation.
For the small investor though, this can cause some problems as your cash is tied up for a period time and you may have to foreclose on the tax payer when then do not pay. If you need the money and there are no current markets to to sell off your certificate if the need arrises. If you have enough money to part with, investing in these vehicles are safe and secure and you can get some hefty profits from them if you are willing to deal with som small problems.
He reminds you that these profits are guarrenteed by the government and are perfectly legal.
This book helps you understand the concept of these investments, but you need to do more research before you start. Are you willing to evict someone when there term is up. Many states allow tax payers to pay thier taxes after the have sold it you with out owing you interest (generally with in a certain time frame). These and other questions needs to be ask as you read the book.
Mr. Moskowitz does a great job at explaining everything except how to get tax Deed (real estate). This is recommened as a starting point for anyone who want to get involved in this type of investment. Further reading and inquiry of others who actually use these investments are still needed.
 not practical at all August 10, 2007
44 out of 47 found this review helpful
I give this book 1 star because the author does a good job of explaining the whole process of buying tax liens, but doesn't mention that you probably won't be able to do this profitably.
I have been to more than a few tax lien sales. The interest rates vary by state, some are 14%, some are 16%, some are 19%, so it sounds like a good deal. then the auction begins and that 16% rate gets bid down to 15%, 14%, 10%, etc. Until nobody is willing to accept less. I sat at an auction where the rate was bid down to 1%. Thats a pretty poor return for my money. I spoke with one of the bidders who told me that his organization will sometimes bid as low as -3%. That means they pay 3% interest for the privilege of buying the lien. Obviously they are hoping to take this to foreclosure.
The problem is many large organizations send representatives to these auctions because they view it as an easy, cheap investment. They are happy to get 5% on a few hundred thousand dollars invested because they hope a few of these will progress to foreclosure, or they will start the foreclosure proceedings so they can recover the entire house and property as payments. Its a numbers game. they know they will get paid eventually, and they hope for a bigger score.
We go in there hoping to pay off the debt and get 16%, but they are playing by different rules. We can't compete with that unless we have tons of cash and are willing to take less. Usually much less.
Another thought to think about is lets say you buy the tax lien. The homeowner continues his pattern of not paying taxes, now you have to continue to buy his future tax liens to keep someone else from buying them and starting their own foreclosure process. because they will get the house and all they have to do is pay you your principal and interest. Which isn't too bad, at least you did not lose money. But they get the big score.
You also need to be aware of the condition of the house. Lets say you buy the tax lien for $5,000 and then you end up foreclosing to recover your money. The house may not be worth $5,000 or it may need $75,000 worth of work to get it into saleable condition if you want to make a decent profit.
You also need to be aware that if you foreclose on a property and there are problems or contamination issues (leaking underground oil tanks, etc) you are now responsible to pay for the clean-up of that contamination. Yes, you can legally go after the previous owner to try to get the cost of clean-up from him, but if he could not pay his taxes what makes you think he has hundreds of thousands of dollars laying around to pay for clean-up costs? Theres probably a good chance that he would not waste money on insurance coverage either. So you are pretty much on your own.
Before you think about buying tax liens you need to do a little research and planning. Go to a few tax lien sales. You can call your local govt to find out the dates. Sit in and see how they work. You also need to have extra money. You need money to buy the tax lien. you need money to start foreclosure proceedings to get your money back. You need to inspect the house and property BEFORE you buy the lien. Don't buy someone elses headache. Maybe they stopped paying taxes to try to get someone to foreclose and take away their nightmare? You need to check the town records. Are their other liens on this property? Are there easements?
I think this was a good way to earn money years ago. before the larger organizations jumped on the tax lien bandwagon. It sounds good in theory, but unless you are in the middle of nowhere, in a tiny town that a large organization has never heard of, the chances of making this a large money making investment are going to be slim. You may get lucky, but in my experience it will be tough.
If you do decide to start buying tax liens, if you can get some at a profitable rate, I recommend you do it far away from where you live. If you start foreclosure proceedings on someone who lives in your own community, there will be some bad blood. people have a tendency to hate other people that start foreclosure proceedings against them. I guess thats why the large organizations do it, they are faceless and don't care about others.
You also need to understand that some people that stop paying taxes are horrible people and who wouldn't want to profit from them? But some of these people will be single mothers trying to keep their children fed and clothed. Do I buy food or pay property taxes?
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