What is Tax Lien Investing?
Tax Lien investing is the safest, most lucrative form of investing that exists. With State mandated returns of 8% - 24%, yields can be great. Plus your investment is backed up by a first position lien on a property worth 5 - 10 times the cost of lien.
That lien position does become foreclosable should the property owner not redeem (pay) their property taxes plus the mandated interest rate. If they do not redeem, you must hire a lawyer to foreclose or your money could be lost.
How the Foreclosure Process Works
All interested parties in the property will be informed of the foreclosure and the amount needed to redeem at the county. If nobody redeems the taxes before the end of the foreclosure time period, the property becomes yours — free and clear of all encumbrances, including any mortgage or IRS liens.
However, you almost never get the property and auctions compromise your rate of return. Understanding these nuances is critical to success.
Getting Started
Ready to start investing in tax liens? Here are the key steps:
- Research your state's tax lien laws and interest rates
- Identify counties holding upcoming tax lien sales
- Perform due diligence on available properties
- Set your budget and bidding strategy
- Attend the auction and start investing
Jason Porter
Jason has been investing in real estate since 1990. Father of four and grandfather to eight, Jason focuses on Tax Deeds, Tax Liens, and Creative Financing to build wealth and help families in underserved communities. Author of the Amazon Best Seller Real Good Deeds.