Secondary Tax Lien FAQs

 By Charles Sells of Platinum Investment Properties – West

Here are some answers to a few frequently asked questions that clients have when purchasing secondary liens from Platinum Investment Properties – West. For your convenience the questions are numbered and the answers are in red.

1. How is the reassignment cost calculated? The county charges $10/lien and we charge $15/lien to process the paperwork. So he reassignment cost is $25 per lien.

2. Exactly when does the redemption period expire based upon the sale date? Everything is extended to 3 years from date of sale as to when they expire. HOWEVER, all the liens we have for sale are ripe for foreclosure NOW.Bid rate is established on the date of sale.

3. How is the bid rate established & how does it affect the original investor’s interest? If our spreadsheet shows 10%, then the annualized rate is 20% (the rate in Illinois doubles every 6 months).

4. Is the 12% per year what the original investor, who doesn’t want a property, agrees to accept from PIP or is it established by law? It is what the client of PIP is willing to sell it for. In most cases, the liens are earning much higher penalties.

5. How is the purchase property value determined and what does that mean?  The purchase property value is the assessment of value (by the county) at the time we purchase the lien.

6. Do you remove liens from the list you emailed me as the liens are purchased? Yes, as they are sold or redeemed they are removed from the list. The list changes literally every day, so we post updates once a week for you.

7. Who viewed & took the lien property pictures & noted the repairs needed? Representatives of PIP-West, do that part of the due diligence, some of which arerealtors and contractors.

 8. Do you have a list of realtors in the various counties who would be willing to provide comps in return for using them to list & resell the property? No, nothing personal, but the “lion’s share” of secondary buyers tend to hurt the relationships PIP-West has with is variable resources. Therefore, I tend to shy away from sharing our contacts.The risk is that you start foreclosure and the lien redeems after you’ve paid the $1250 non-reimbursed ATAF fee. If you purchase a small lien – that could cut into your capital. The larger the lien that you purchase, the better your chances of coming out ahead – regardless of whether the lien redeems or not.

9. What is the potential risk in purchasing a secondary tax lien? The risk is that you start foreclosure and the lien redeems after you’ve paid the $1250 non-reimbursed ATAF fee. If you purchase a small lien – that could cut into your capital. The larger the lien that you purchase, the better your chances of coming out ahead – regardless of whether the lien redeems or not.

Members can get the List of Secondary Liens For Sale Here