SMSF buying US Tax Liens Certs

[mitchmakhan]

Ok guys I did a search on this one and couldn't find it, so i thought I would post to see if anyone has done it or researced it...

Here's the plan...
Setup a SMSF...(simple enough)
then go to the United States and purchase Tax Lien Certificates with the funds...(no borrowing) with a hope of receiving 16% to 30% return on cas invested pa..

The Americans can do it with their IRA'S (Individual Retirement Accounts) so i was wondering if we could do it...with our SMSF...

For those not familar with Tax Liens, they are basically like the way our local governments sell properties that are in default of rates payments, however they ask the investor to pay the overdue tax with a % fee to the owner of the property of up to 30% more (depending on the state). Once the rates are paid plus the interest you get your money....if the rates are not paid (and this is rare) you get the property free and clear of any other encumberances...
Anyway if anyone knows if it is legal it would be appreciated, I of course will seek the advice of my team, but I thought I would put it out there to see if anyone is doing it or has done it....


cheers Mitch

 

[mitchmakhan]

Ok guys I take from the lack of response that no one has really looked into it, well after much time online and on international phone calls, it is possible, there's a lot of forms to fill out but basically there is no drama, we are going over to check it out!!!!
cheers Mitch

 

[Andrew]

The less sensitive amongst us might like to check out Viatical Settlements as a high paying alternative to Tax Liens.

andy

 

[mitchmakhan]

yeh i dont mind those either they are my next choice if the liens dont work out....
mitch

 

[jjnshell]

Hi Andrew,

What is a Viatical Settlements?

How do they work?

mitchmakhan,

I have looked at Lien previously. From my very limited understanding, 16% - 30% is actually very difficult to achieve. There is apparently enourmouse competition for them. Nonetheless, best of luck and please let us know how you get on.

When are you heading over? Where to?

Regards
Jeff

 

[mitchmakhan]

jjnshell,
thanks for the reply, if i may answer from my understanding of a Viatical Settlement - it is a contract that purchases the life insurance policy of people that are terminally ill - at a discount. So to the insured person (the ill) they recieve cash now (albeit less) than having to wait until they die to get their insurance payout. The investor recieves the payout upon the policies end. (trying to find a nice way to put it).

As far as the Liens go I have done a lot of research and there appears to be thousands available at this very moment...whether or not they are any good remains to be seen, I am heading over i 5 weeks to have a look....cheers Mitch

 

[jjnshell]

Cool Mitch,

If it ok I'd like to give you a call to discuss. I'll be in the States from March 16 for about 4 weeks.

Jeff