LANDERVILLE INVESTMENT AGENCY
By: Billy Hill
October 3, 2009
Table of Contents
1. Executive Summary for Landerville Investment Agency
2. Business Description and Financing
3. Tax Lien Business
4. Tax Lien Market
5. Operations and Procedures
6. Bidding and Property Risks
7. Projected Profit
1. Executive Summary for Landerville Investment Agency, LLC Landerville Investment Agency’s goal will be to purchase tax liens from state government and city treasurer auctions and recoup the funds from the owner. State governments and city treasures will issue a lien against residential and business properties in an effort to recoup the owed tax money (Carr, 2003). After I have purchased the auctioned tax lien(s) the recouped funds will be used as profit and will allow the company to reinvest in tax liens. In the event the funds are not recouped, my company will move force the tax lien property into foreclosure. After the foreclosure process, the company will then sell the property in order to recoup its investment. In an effort to recoup the owed tax money the local government will put a lien on the property (Carr, 2003). The primary goal is not to foreclose but to the recoup funds from the owners of the property.
2. Business Description
Landerville Investment Agency will buy auctioned tax liens.
Landerville Investment Agency will be a new business created to specialize in the buying of delinquent residential and business tax liens. Tax liens are auctioned off by county and or state governments or city treasurer’s offices (Mourea, 1993). When a tax lien against a property is auctioned by state governments or city treasurer’s offices they then become legitimate redeemable certificates (Mourea, 1993). This will company operate with the intent and purpose of buying delinquent property tax liens on properties and recouping all funds associated with the transaction. The company will pay for all costs associated with securing a tax lien on a property. Once the tax lien is secured the company will then contact the property owner and request repayment of the taxes and all additional costs (Burrell, 2006).
The tax lien business is not new business venture.
According to Toddi Gutner of Business Week, investing in tax liens can be a smart way of making a financial return between five percent up to fifteen percent on your initial investment (Gutner, 2003). Tax liens certificates are legitimately sold by local government (Mourea, 1993). For nearly 30 years county tax or treasurer’s offices have auctioned off tax debts at different times throughout the year (Mourea, 1993). The selling of tax liens can very profitable to local governement countiies. In 1991, Dade County Florida sold around seventy-five million worth of tax lies (Mourea, 1993). Buying tax lien certificates are not new, banks, investors, individuals and lendors have been buying them as a means of protection (Mourea, 1993). So if the properties taxes remain unpaid the lien holder can then take over the property (Mourea, 1993). Business will be a sole proprietorship.
Landerville Investment Agency will exist as a small business with a sole proprietorship structure (How To: Choose The Right Legal Structure, 2009). To keep a low overhead the business will be ran from out of my home. I will be performing all the research on the state governments or city treasurer’s laws prior to purchasing a tax lien certificate. In addition I will perform the research on the property areas prior to the purchase of any tax lien certificate. The plan is start off small and buy tax liens certificates in my local area (Gutner, 2003). To help with understanding the nuances, stay apprised of new laws, networking and guidance I will be joining the National Tax Lien Association. Business will be illiquid.
Purchasing tax lien certificates is an investment and will not be a quick profitable business....
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