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TAX LIEN INVESTING IN NJCREATIVE INVESTING IN 2013

Tax Lien Investing 101

• Initial Buy: 0 to 18% depending on lien amount and municipality

• Subsequent Taxes: 18% per redemption

• Some municipalities have a year end tax penalty to the homeowner between 2-6% depending on township

• Buy at auction

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How are Tax Liens Created?

•A tax lien is a lien on a property for non payment of tax.

•Each and every year, owners of real estate that fail to pay their property taxes have a tax lien created on their property.

•This is a financial obligation to pay overdue taxes.

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Why Invest in Tax Liens

• Income

• Tax Liens accrue finance charges of up to 18 percent

• Safety of Investment Capital

• Liens are secured by their first priority on real estate so investment will be returned

• Diversification

• Liens are diversified as there is little correlation to other investment markets

• Investment Capital

• Initial investment can be as small as $100 for a lien but must make further financial commitments to maintain lien after purchase

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What are the Risks?

• Length of Investment

• Can take greater than 2 years to recoup your investment if homeowner does not redeem

• Reduced Return on Invested Capital

• If Homeowner declares Bankruptcy then Judge can just provide your investment capital back with an adjusted lower return

• Liquidity

• No organized second market so cashing out position is hard but this is starting to change with websites such as www.bigbidder.com and www.lienlog.com

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How to Find out about Tax Liens

• Each municipality in the state of New Jersey has a specific tax lien auction date. This auction is municipal rather than county based

• Each municipality tax collector must setup a tax list prior to tax sale auction with legal property description and amount due on the lien

• You can find out about tax liens by calling the tax collectors office of each municipality or you can get a subscription to list compiling sites such as: www.liensource.net or www.njtaxlieninvestor.com

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Auction Process

• Tax lien auctions will use one of the following five methods to determine the successful bidder:

• Bid Down

• Interest Premiums Paid

• Randomly Selected Winners

• Rotating Winners

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Steps before coming to the Auction

• Downloaded the Tax Lien List for Your

Target Township

• Due Diligence on the Tax Lien You wish

to buy:

• Picture of Subject Property

• Mortgage/Other Lien Search

• Analysis of Market Value of Property

• Complete target interest rate and/or

premium analysis prior to auction date

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• Anbar is a boutique investment firm geared toward creative investing in tax liens

• Anbar primarily deals in the housing and commercial tax lien markets across key markets

• Anbar has deployed capital in tax liens on real estate assets valuing over $1MM over the past 4 months

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Ask Us

Thought of a Question:

@Ankit_RER

Appendix 1: Sample NJ Tax Lien Certificate

• Initial Buy: $2,622 including taxes and water charges

• Initial Return: 0-18% per annum

• Subsequent Redemptions: All at 18% per annum

• Some municipalities have a year end tax penalty to the homeowner between 2-6% depending on township

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Appendix 2: Anbar Management TeamAnkit DuggalInvestment Director

• Investment Director for Anbar Holdings & Managing Partner for RER LLC

• Over 9 years of experience in the NJ Real Estate Market

• Experienced Realtor, Mortgage Banker, Title Officer & Private Investor

• Experienced in Tax Liens, Buy and Hold Properties, and Rehab Properties

Jahanzeb JabbarOperations Director

• Operations Director for Anbar Holdings & Marketing Manager for American Express

• Over 2 years of experience in financial services marketing and valuations

• Experienced Marketer & Private Investor

• Experienced in Tax Liens & New Product Development