Scammers Create ‘Bad Blood’ Between Investors and Property Owners

It has long been a strategy for tax lien and tax deed certificate investors to attempt to work with property owners to reach a conclusion that does not require the investor to wait an extended period of time before taking control of a property and does not keep the property owner in “debt limbo” wondering what they will do if they cannot pay their property taxes.

Thanks to a new scam making the rounds all over the country, however, that symbiotic relationship is experiencing some “bad blood” lately.

According to reports from multiple states, many citizens are receiving collection threats claiming to be from the IRS. The letters are labeled “Public Judgment Records,” a department that does not exist in most counties under that name and inform the recipient that they owe property taxes on their homes.

In most cases, the property owners do owe property taxes, although they are not necessarily delinquent on them. The letters are just close enough to the truth that they frighten homeowners into making hasty, bad decisions. When contacted by a party claiming to be from the local tax office or the IRS, victims of the scam wire money or pay via debit and credit cards in order to avoid having a lien on their home. Of course, if they opt to wire the money, it is essentially lost to them even if they later discover they were conned.

Scammers Create ‘Bad Blood’ Between Investors and Property Owners

This type of scam is bad for property tax lien investors because it creates a feeling of suspicion around all notices related to property tax debts. In some cases, victims and potential victims of the fraud may actually blame investors for the con even though investing in property tax liens and property tax deed certificates has long been a valid, viable way for real estate investors to generate returns on capital investments.

The results are twofold:

1. Homeowners may be less likely to work with investors. This is unfortunate because it creates situations in which homeowners rack up more interest on their property tax debts rather than enabling them to resolve the issue quickly if they are unable or unwilling to pay. It also prolongs the period of time real estate investors have to hold the investment while waiting on a return. For investors, the time span is something they plan on but often try to avoid. For homeowners, it is simply needless expense.
2. Investors end up being reported to authorities without grounds.Probably the bigger problem for real estate investors is that they may find themselves reported to authorities for being part of unrelated scams when they are simply trying to maximize their investments. This can be embarrassing and, of course, a huge business liability for an innocent investor.

Summary: Scammers Create ‘Bad Blood’ Between Investors and Property Owners

How to Avoid Getting Caught in the Scam Trap

If you are considering investing in tax liens or property tax deed certificates, make sure you understand exactly what local and state regulations say about contacting homeowners and working with them to resolve their property tax issues.

Even better, consider working with an established investor presence in the area that has a history of successfully working with state and county officials and local homeowners. The benefit of working with a business with a track record can save you time, money, and professional reputation in very short order.