Tax deed/lien investing - How good of a strategy is it?

Foreclosures, Short Sales, Tax Foreclosures
1

I have recently been introduced to this niche of REI.

I was wondering if anyone can give me their feedback regarding this niche.

I’d like to know:

  1. is this for the beginning investor?
  2. how easy or hard of a strategy is it?
  3. is this capital intensive?
  4. what are the negatives to this style of investing?

I met an investor that briefed me on it. They said they closed 40 properties last year doing this method. They told me they like getting the deed from the homeowner as it has it’s advantages.

I see that Darius B and Joanne M seem to be authorities on this subject. Can anyone give me feedback on them or any others who you’d recommend on this subject?

Thanks!

2

  1. tax lien & deed investing is for anybody in the US. & lots of Canadians invest this way as well… it is generally safe, secured by the real estate, with predictable high-interest returns guaranteed by the local Government…so I would say it is great for beginners…

  2. it depends on how slow or fast your brain works…

  3. it depends on the investment (liens or deeds) & also location, location, location…

  4. you buy a lien or deed without researching it or without seeing it (or someone taking pictures of it on your behalf)… if the prop. goes into Bankruptcy before the redemption period is up, then you will have to wait until the bankruptcy judge clears the case, this may take several years in some cases, you will not lose your investment, however in some cases your interest may be cut in half (if you were to be paid 12%, you may only get 6%)… if you are purchasing liens and you do not put all of your returns back into the cycle, then the process of generating a cushy retirement is negated… for example; if you take $10,000 and roll it over every year for 20 years at 18% interest you have something like $300,000 for retirement

All of the tax lien and deed “gurus” are selling FREE Gov’t information…yes all of the information is free and provided by the Government… yes, it may be easier to get a course which will help you hopefully get the concept a little quicker…however you are still going to have to download the State Prop tax codes in each state that you plan on investing in…

you have to know the state laws, the various rules and regulations for each individual county,(( for they often differ from one another ))

I sold courses that had great information to hundreds of people, however at the end of the day, only a small handful (I could probably count them on my hands) actually did anything with it… it is a lot easier to buy a course, read it once, and then put it on the shelf with the other various “guru” RE investing course…

there is something different about an individual who takes the time to go down and spend a day at the county records and ask questions, download the state Prop tax codes, get the rules from the county, and go to a few sales to get an feeling for the auction process… remember, the public officials who are involved in the collection of prop. taxes are just that, public officials…they are required by the state to answer questions and give unbiased answers just any other public officials works for the people… (I don’t believe the Gurus are held to those standards)…

I hope at least a very small portion of this information has helped you…

3

Michael,

Thank you for the response. It did, indeed, help me. I greatly appreciate the feedback!

Sincerely,
Geo

4

sounds good…