Tax lien certificates. True or BS

[White8]

I was channel surfing while eating lunch and came across an infomercial for tax lien certificate sales. After googling and reading about the concept, which appears to be buying a tax lien with the hope that the property owner will default, is there any merit to the concept or is it the typical BS spouted on infomercials?

 

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[EasyMoney_in_NC]

IIRC It puts you in the position to foreclose on the property (and take ownership) if the lien isn't paid (instead of the municipality you bought it from). I'm sure someone else will chime in with more definitive info.

 

[andviv]

I did some research about this topic some time ago... my conclusion was that this strategy was more about making the 16% return (or whatever the penalty for not paying taxes is) than owning the properties.

I talked to an investor that uses this as his strategy. He buys thousands of dollars at once for many properties and he prefers those that do have mortgages, as the banks will probably pay you back the lien plus the 16% so you don't foreclose and wipe their collateral. He seemed very successful at doing this. When he ended up owning the property he had to go through the painful process of foreclosing on the owner and get the property, and then sell it quick to use his money again. Funny, that's how he called it, "painful process" of foreclosing.

 

[stillworkin]

I tried the tax liens here in Fl. and they do start at 16% but quickly go down once the bidding starts. From my experience, I would say the average percent was around 5-6%. Money can be made doing this, but don't expect to get that big mansion like the infomercials portray, unless you do put up thousands and go through the foreclosure process. Chances are, if it's a nice home, the owners pay the back taxes.

When the next one comes to your area, check it out. They are free to attend.

 

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