Tax Lien Certificates Debt Purchase
|
||||||||||||||||||||||||||||||||||||||||||||||
 | Up to 13.1% p.a. + foreclosure profits |
| expected foreclosure profits 2.0% p.a. | |
|
|
Marketing Material- Tax liens explained. <----- very important !
- CEP
presentation on their Tax Lien Debt Purchase. - Tax Lien Certificate Debt Purchase fact sheet
- Tax lien certificate debt debt purchase frequently asked questions sheet
How the Tax Lien Debt Purchase Works| How the CEP tax lien debt purchase works: It is structured much like a bank Certificate of Deposit, but with significantly higher returns. Your investment with them provides a set, contractually guaranteed return that get higher depending on how long and how much you decide to invest. The investor's capital is used to purchase property tax liens from counties or municipalities. CEP takes responsibility for locating, evaluating, purchasing and monitoring the status of the lien, as well as recouping the investments. | |
| Property tax lien: In many USA states, if a property owner fails to pay property taxes, the county / municipality will issue a tax lien on that property on the delinquent tax, including fees and interest. If debt continue being unpaid, the local government will publicly auction the lien to obtain the outstanding debt. The lien holder collects interest from the property owner at a high rate mandated by the State. After a specific redemption period,the lien holder is entitled to foreclose on the property and sell it if this debt is not fully repaid. | |
| Tax lien certificate: The certificate issued by the local government selling the lien specifies
| |
| High returns: CEP, the owner of the lien, known as the lienee, accrues a punitive rate of interest on the amount of the lien, invariably 16% - 36% p.a. If the property owner, known as the lienor, does not pay this interest and the outstanding lien, then CEP is allowed to foreclose on the property and sell it after a redemption period. | |
Potential for windfall profits:There are only two outcomes for a lienee:
| |
| Investments are secured: Almost all tax liens are fully redeemed by the property owner or mortgage provider. The property owner cannot sell their property until the tax lien is removed by being paid in full. The incentive for the property owner is the threat of foreclosure for a comparatively small delinquent debt, which would allow allow the lien holder to obtain title to the property at 80% to 99% below market value. All other creditors, except the IRS, such as mortgage provider, are subordinate to the tax lien. |
Due diligence- What happens to investment if CEP goes bankrupt?
With an equity investment; if the company goes bankrupt, you lose your investment. Also, the value of the equity can decrease in value. With a debt investment, you're making a loan to the company, and the company is under a Debt Investment Agreement contract requiring them to repay the full face value of the contract plus all interest owed. In addition, the company pledges their asset towards these investments. So if the company defaults, you'll have the legal right to claim these assets to regain your investment capital. - What is the counter party risk for an investor?
The company has a strong rating from Dun and Bradstreet DUNS Number 82-763-7575. They registered with the Security and Exchange Commission under Regulation D. Verified membership in the Delaware State Chamber of Commerce, Washington D.C. Chamber of Commerce, and Chicagoland Chamber of Commerce. Their website is accredited by the Better Business Bureau and NetworkSolutions, as not a single complaint has been levied. - What happens if the IRS places a lien against a property for which CEP holds a tax lien or deed?
When property is sold at public auction and the IRS holds a tax lien on the property, the United States has the right of redemption for 120 days from the date of the sale. The IRS will pay the actual amount paid by the bidder, plus interest at 6% per annum from the date of sale, plus the expenses of the sale that exceed any income received from the property. - How financially strong is the company?
In 2006, they began as a limited partnership with varied backgrounds in finance and real-estate industry and $1 million capital. Since then, they have steadily grown into a productive firm with a large expansion strategy. By 2007 they managed over $36 million in assets. In 2008, it was decided to advance to the next stage, and formed into a formal corporate structure in the State of Delaware and began the tax lien certificate debt program in March 2008. Currently, they manage almost $50 million assets with healthy profits. - Isn't this just a standard high-yield corporate bond with its associated default risks?
This is a real-estate asset class investment because the collateral is the property on which the liens are held.
Questions on company and tax lien investments- What is background of the company?
Commercial Equity Partners Limited is a commercial real estate investment company headquartered in Wilmington, Delaware. Our strong expertise in property acquisition, mortgage note trust deeds and purchase of property tax liens is highlighted by our commitment to quality, value, and client satisfaction. Leveraging our experience in commercial real-estate investments encourages investors to become involved in an innovative, growing industry-leading real estate investment company. - Who are the management?
Our management team brings over 60 years of customer relations experience from an array of industries including financial, technology, real estate and health-care. We believe that the condition around us will always be changing, but holding fast to core values will always prevail. - What real-estate opportunities do you offer?
We provide investment on property tax liens with maturities ranging from 30 to 60 months. - How do profit opportunities arise?
We purchase tax liens around the country on commercial and residential property, and hold these liens until we are paid by the property owner, a buyer of the property, the mortgage holder or, in just over 2% of the cases we expect foreclosure on the property to recoup our money and earn a substantial windfall profit. - How long have you been offering this opportunity?
In 2006, we began as a limited partnership with varied backgrounds in finance and real-estate industry and $1 million capital. Since then, we have steadily grown into a productive firm with large expansion strategy. By 2007 we managed over $36 million in assets. In 2008, we decided we had the necessary key ingredients to advance to our next stage, and formed into a formal corporate structure in the State of Delaware and began the tax lien certificate debt program in March 2008. We are approaching $50 million assets under management - Do tax lien certificates provide long-term wealth or immediate cash flow?
Both. Our investments can be set up to generate a monthly income or the investor has the option to compound their interest monthly generating an even higher return on their investment.Tax liens are an excellent choice for long term retirement investing. The liens are a slow growth with steady fixed returns as outlined under state law from the state in which we purchase the liens. They are secured by real estate with a ratio of between 5 - 100 : 1 in relation to collateral versus cost. Over a five year period there will be a a fair number of foreclosures which the investor are able to share in the windfall profits. - How does the company manage to pay up to 13% p.a. and still make a profit?
For tax lien investments, we make money on the yield-spread. This is the difference we obtain on the lien and the fixed rate we pay the investor. In addition, we earn a majority share of the windfall profits from the foreclosures that should occur in 2% - 4% of the liens we purchase. - Can investors access their accounts online?
Investors can privately view their monthly updated investment details on the web. - Why should investors partake tax liens through CEP instead of on their own?
Two main reasons:- Effort: - Tax lien auctions are open to the public and you can buy them yourself. Be aware, it can be extremely time-consuming to learn the business, research properties, and attend the auctions. We undertake all the legwork for you, whilst offering a substantial rate of return and also allowing you to benefit from potential windfall profits.
- Reduced risk - As with any collective investment, the risk is diluted because CEP will hold many liens. If an individual holds a few liens, there is risk that if something goes wrong with the lien, i.e. damage to house during redemption period, survey or environmental issues, the individual could lose a substantial part of the investment..
- Why are these attractive high return investments not more main-stream ?
The entire tax lien market is minuscule compared to other investment categories. Annual purchases are less than USD 2 billion, mainly dominated by one closed-end investment company. Collective investments in this asset class are even smaller. This is a niche but profitable arena.
How to proceed with investment- Follow this procedure to contact CEP
- Mention introduction from www.high-interest-deposits.com
