FREQUENTLY ASKED QUESTIONS 

1)  What exactly is a Tax Lien?  A Tax Lien is an encumbrance issued by a County against a specific parcel of Real Estate for unpaid taxes by the owner of the property.  Law automatically creates a Tax Lien, when taxes on that property become due.  The lien stays on the property until the taxes are paid at which time redemption occurs and the lien is removed.  Title to property cannot be transferred until this lien is paid. It is a First Position Lien senior to all other liens except a Federal liens, State and Municipal liens and bond assessments.

2)  What is a Tax Lien Certificate?  A Tax Lien Certificate is a document issued by the County, which identifies the holder and the amount of the lien.

3)  What is a Tax Foreclosed Deed?  A Tax Deed is a deed of legal title to the property. It is issued by the County and conveyed to the purchaser for paying the tax indebtedness owed.

4)  Does every State have the same system for collecting delinquent taxes?   No. Although all states have a mandated lien process, some use the Tax Lien Certificate process and the others use the Tax Deed foreclosure process. Presently, 28 states are Tax Lien Certificate States and 22 are Tax Deed States.

5)  Why do Counties sell Tax Lien Certificates and Foreclosed Deeds?   As much as 50% of a County’s revenues are generated through assessing and collecting property taxes.   When property owners become delinquent in paying their taxes A County’s revenues are curtailed. Law permits Counties to remedy this by way of the selling of Tax Lien Certificates or Tax Deeds. Since they are not allowed to unduly profit from the sale of foreclosed properties, they offer these Certificates or Deeds to the general public, at a minimum bid which is generally far lower than the fair market value.

6)  Does the homeowner have any recourse?  There is an automatic period of redemption, which varies from County to County and from State to State.  It can be from only 24 hours prior to sale or sometimes up to 3 years or longer after a sale.

7)  How often are Tax Lien Certificate and Tax Foreclosed Deed sales conducted and how many are available?  Generally, each County has an annual sale with some of the more populated Counties holding up to as many as 4 sales annually. There is a sale occurring somewhere across the Country, all year long.  The number of Certificates or Deeds offered at any time varies and can range from just 1 or 2 to more than several thousand at a time.

8)  What are the various methods for purchasing these instruments?   By bidding at public auction, absentee bidding, sealed bids, or in some rare cases, over-the-counter.

9)  Is this a complicated procedure?  Yes.  To invest in either Tax Lien Certificates or Tax Deeds, you need to have a thorough understanding of the various steps involved to assure you are buying wisely.  Just because a property is offered for sale, doesn’t necessarily mean it’s a good buy or even has any improvements on it. It could be just a sliver of property such as an easement or other worthless parcel. Real Estate laws vary from state to state.  When the Counties offer Certificates and Deeds, they are done so with a warning of “CAVEAT EMPTOR” (Let the Buyer Beware).  These properties are sold on an “AS IS” basis.  They do not guarantee the condition of the property. Some of the cautions include whether there is a structure on the property or if there are any restrictions on the property. Is the property in compliance with zoning ordinances and does it conform to building codes and permits. Is there any hazardous waste contamination issues, or has the property has been condemned, to name a few. To the experienced it is not a difficult process, it is however very time consuming.

It is vital after doing the initial research, to physically inspect each property. The Maier Group, Inc., does all of the “Due Diligence” at this critical stage, prior to qualifying a particular property for purchase.   There is a stringent series of steps involved to qualify a property. This is by far the most important phase of the process.

10) What are some of the steps involved?   Here are some of them before the purchase is made. Identifying the parcel, searching County records to determine the suitability of the property for resale, if there is an institutional lender’s lien, looking for hidden liabilities attached to the property, determining the age and condition of any improvements, research of current comparable market sales as well as sales trends in the vicinity, rating the desirability of the neighborhood, availability of public services, schools, shopping, hospitals, police and fire, transportation, restaurants, lodging, establishing a fair-market target price the property could bring, pre-selection of a reputable Real Estate Broker and Escrow Company as well as a local attorney, contacting the Chamber of Commerce for information, working through a Title Company to arrange for Title Insurance on the property when it is bought, obtaining a Title Report and conferring with the selling County entity to assure compliance with their particular procedures so as to obtain clear marketable title, free of encumbrance, then physically inspecting the property. There are of course several more steps involved. The Maier Group, Inc. performs all of these steps.

11) Which is the better investment, Tax Deeds or Tax Lien Certificates?   We have almost completely eliminated investing in Tax Liens in favor of the much more profitable Tax Deeds.  Here is the difference.  Tax Lien Certificates are bid on to pay the obligation of behalf of the defaulting homeowner.  The bidding starts out at an attractive initial interest rate, say 15% or 18% and you are competitively bidding downward against others until the bid is won based on the lowest interest rate someone is willing to accept.  This generally ends up around the 8% range for a predetermined period of time.  You are issued a lien against the homeowners’ property, not a deed because you do not own the property at this point. The only time you would ever own the property is upon default if the obligation is not repaid on time by the homeowner.  You would have to then foreclose to receive the deed.  This in truth only happens rarely.

      With Tax Deeds the County has already foreclosed and owns the property.  In this case you are actually buying real property from the County. You bid upward as you would in traditional auctions and the highest bid buys the property.  You do own the property and you are issued a Treasurers Deed or Quit Claim Deed.  You have full rights of ownership but you must take care to follow statutory redemption or the legal challenge periods usually for one year following the purchase before you can resell it.  The Maier Group, Inc. has developed 3 methods of shortening this time frame and is able to resell a purchase well within this one year period.  The profits from Tax Deeds purchases can be substantially higher than those of Tax Liens Certificates, besides, you actually own the property.

12) What are the steps involved in selling a property after it’s been purchased?   Clear or Marketable Title to the property has to be assured.  Although the County issues title, there may be a “cloud”, which prevents obtaining “Clear or Marketable Title” to the property.  In this instance, either a Quit Claim Deed is executed; a Title Certification or a judicial action called a Quiet Title action is brought to establish a purchaser’s right to title by removing the clouds to the title.  It is a fairly simple procedure but the later requires the services of an attorney.  There may also be a redemption period imposed in some States, before title is vested.  Title and Liability Insurance is purchased to further insure protection of the invested amount. A Realtor is then contracted to market the property at an incentive price below the Fair-Market price.  This is done to sell the property quickly.  Since the property was purchased substantially below its Fair-Market Value, by pricing it in this manner, there is real motivation to a buyer to make a good deal.  It is a “Win-Win.”  Escrow is then opened and the sale consummated with the proceeds being returned to the sellers, the joint-venture.

13) Who is The Maier Group, Inc.?  Richard C. Maier is the founding Broker and is the Chairman and CEO of the Company.  The Firm has been established for the past 18 years, in Redlands, California.  It is registered and licensed by the Department of Real Estate in the State of California.   It specializes in the purchase and sale of Tax Defaulted Properties as well as Tax Lien Certificates and other foreclosed real estate. It employ’s a number of sales agents and has a vast network of associates which it has developed over the years. It consults regularly with experts in their particular fields such as Real Estate Law, Title Insurance, Escrows, Finance, Appraisals and Valuations, Property Management and Investment and Mortgage Banking.

Richard C. Maier has an extensive 39-year background in business and finance and has been recognized for demonstrating outstanding professional individual leadership and achievement. He was inducted into the millennium additions of both the National Register’s and Lexington’s “Who’s Who” in Executives and Professionals in America.

14) How can I verify this?   Simply contact the California Department of Real Estate by phone: 1-916-227-0931, or by mail: California Department of Real Estate, PO Box 187001, Sacramento, CA 95818-7001, or on the internet: @ www.dre.ca.gov/  Broker Licensee: Richard Cyril Maier #00999467 and Corporate licensee: The Maier Group, Inc., dba: Maier Real Estate  #31314000. The firm also a has memberships in the Better Business Bureau member #13152095 @ www.bbbsouthland.org; Dun & Bradstreet @ www.dnb.com; the US Chamber of Commerce @ www.uschamber.com and The National Association of Realtors @ www.car.org.

15) How does one participate in this program?  A Joint Venture Agreement is drafted between The Maier Group, Inc., and the participant detailing the terms and conditions of the joint-venture. The participating party may be an individual(s) or other entity such as an LLC, Trust, Corporation, General or Limited Partnership. The participating entity then contributes the initial purchasing capital to invest in the purchase of real properties.  The Maier Group, Inc., contributes its expertise and does all of the actual work from researching and purchasing the properties to the resale.  When a transaction has been completed your invested capital plus 50% of the gross profits go back to you. The Maier Group, Inc., shares in 40% of the gross profits as well.  All transactions are escrowed and fully documented. Income received is treated a ordinary interest income.  Each party has equal rights and an equal say.

16) What else is involved?  Besides a Joint Venture Agreement, there is a State Fictitious Business Name filing to give public notification of the joint-venture’s existence as well as a publication in a newspaper, preparation of a W-9 form, a requirement to purchase these properties from county inventories.

17) Does The Maier Group, Inc., receive any fees or compensation other than their defined % share of the gross profits? For example, does it charge a management fee of any kind?   No.

18) Does The Maier Group, Inc. pay any expenses?   Yes, we are quite unique in this way unlike typical joint-ventures or partnerships who charge management or administration fees, we do not. We absorb all of the out-of-pocket costs to set up of the joint-venture, the filing fees as well as the recording and publication fees for  “Fictitious Business Name”.   We pay for the cost of researching the information to qualify the properties for purchase, including records searches, physical inspection of each property, the registration fees to the various counties plus travel and lodging up to the point of purchase.  Once we have made a purchase all costs are shared with you equally. These.  These include Title, Fire and Liability Insurance, Litigation Guarantees and any occasional costs in obtaining “Clear and Marketable Title” to a property, as well as any refurbishment costs, after a property is purchased;  the actual the selling costs for a property you are invested in and Escrow fees are paid for by the joint venture out of the sale proceeds when the property resells.

19) How much can I invest?   We require at least a $5,000 per participating joint-venture as an initial investment, so that the selection of properties available to you at auction can be broadened. You may contribute more at any time by increasing your capital account.

20) Is the $5,000 actually enough for me to make a purchase?   By itself it usually isn’t, however, by “Pooling” that amount with that of the other available capital provided by the other joint-venturers involved, we are able to make more purchases of the better properties. These are the ones we concentrate on.  In this way you may have an interest in several properties, thereby diversifying your investment portfolio. The dollar amount share of each “Investment Pool” available determines the percentage of your particular interest.  All joint-ventures enjoy equal treatment so there is no conflict of interests.  The amount in our pool varies throughout the year.

21) How much do Tax Lien Certificates or Tax Foreclosed Deeds usually cost?   They can range from a few hundred to several thousand dollars.

22) Does The Maier Group, Inc., presently have other joint-ventures doing this and making profits?  Yes, from all across the United States and Europe. We have been doing this full time since 1990.

23) Have any of your participants ever lost any money?  Yes, in only 1 instance of intentional seller fraud, over the past 9 years where the IRS committed a fraud on us by deliberately misrepresenting both the appraised value and the true physical condition of a property they auctioned off in Idaho.  Even with our vast experience we were unfortunately deceived.  The resulting loss amounted to less than 6 % on the transaction and was quickly made back on another acquisition a few weeks later.  We have since adopted stricter due diligence safeguards to eliminate the possibility of any future such situation where intentional fraud is involved from ever happening again. This incident has served as a real warning that you can never trust any government entity’s representations in these sales.

 24) How do I know that The Maier Group, Inc., will do a good job and be diligent in their efforts using my capital?  The only way we make any money is by generating a profit for the joint-venture.  If we don’t do our part and produce tangible results, we receive nothing for our efforts. The burden of selecting good properties is therefore on us. We are meticulous and invest our time and all of our resources to this.  It is our full time job.  We not only share in any profits, we also would have to pay our share in any losses.  We are therefore extremely diligent in this regard. Keep in mind, we don't make any money until you do.

25) Is my investment secured?  Yes. All purchases of Real Property are secured by the Real Property in the form of a First Trust Deed Lien in the name of the investing entities for the amount of your investment. These properties are worth far more than the purchase amount.  A property you have a vested interest in cannot be sold without repayment of that obligation. In addition, Title Insurance is taken out in most cases, as is Dwelling Fire and Liability Insurance at the fair market replacement value to protect the invested amount.

26) Are there particular areas of the Country, which are better investments than others?   Yes.  We are presently concentrating on the 8 Western States, California, Oregon, Washington, Idaho, Utah, Arizona, Nevada and Hawaii. These maintain the highest demand and due to higher growth rates and appreciation. We do however cover nearly all of the other tax auctions as well paying particular attention to federal auctions which are regularly held across the Country.

27) How are the Counties selected?  On the basis of population usually of 50,000 or more, and on domestic desirability.  Certain parts of the Country are consistently more desirable than others.

28) Approximately how many is this in the 8 Western States?   Presently we are working with approximately 77 separate Counties in just those states alone.  Appreciation in this region is historically higher than any other region in the country.

29) How long does it take to re-sell a property?   Several factors impact the answer.  Our goal is to turn over as many properties as we can in the shortest possible period of time. On average, you should look at 8-12 months as an average. We have re-sold some properties in less than 60 days there are others we hold longer to enjoy the appreciation.  Decisions are on a case by case basis.

30) What about my taxes?  Allow between 30% - 35% of the net profits received from these transactions for taxes.  This of course varies depending upon your personal tax situation.  You will need to consult your own tax consultant.  Your income is treated as ordinary income on a Form 1099-INT issued by us.

31) Do I need to put my capital in right away?    The sooner you fund your investment, the sooner you will be included in the next purchase pool.  We are buying property all year round.

32) How do I know what I am investing in?  Our participants have 24/7 access to a confidential website URL.  You will know at all times what auctions we are monitoring and what specific properties we have selected to bid on and the status of a property.  This site is updated frequently.  You may also contact us by e-mail or phone at any time. Here's our site for you to go to:  http://www.maiers.com/STATUSANDNEWSUPDATES

 33) Can I ever withdraw any portion or all of my funds?  Yes, with 90 days notice to us, at any time when your capital account is liquid. That means either prior to a commitment to make a specific purchase, or if your funds have been invested, after the resale of the property in accordance with the terms of our agreement.  Your funds are kept in a segregated account within the brokerage firm. Quarterly statements are generated and sent out to you. 

34) What if I decide to no longer participate in the joint-venture for any reason and wish to terminate my interest?  You may terminate at any time during the course of the joint-venture in accordance with the terms of the joint venture agreement.  A full accounting of your interest is done and you receive your original capital back plus your % share of the net profits accrued to that time.  The relationship is then terminated.

35) Do you ever invest in other types of real estate?  Yes, in 2001 we expanded our market to include purchases of IRS, US Marshals, Customs, INS, US Treasury, Bankruptcy and Bank foreclosure properties on a national basis. We are participating all year around.

36) Can you provide references?  Certainly, if you decide that this kind of an investment program is right for you and you would like to participate with us, we will happy to provide you with some references. References

37)  What doe the joint venture agreement look like?  Please click on this link AGREEMENT, you will need the free .