Tax Lien Certificate Sale Success Rate

I've been reading up on tax lien sales and just curious -- how competitive is the bidding for tax lien certificates? Is it pretty tough to get at a good deal on them, or are there plenty to go around?

Edited: 06/26/2010 at 04:43AM

Account Closed

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Icon_minipost Feb 19 '08, 03:02 AM

It varies a lot based on the county and the interest rates.

The only want to tell is to select some counties that sell TLCs. Many have websites that explain what they offer and how.

Not all counties sell them. Only some states consider them something that can be legally sold.

If you have read a few things you might come across info that shows there are multiple ways to sell TLCs. Some have you bid on the interest rate, some have you bid on the percentage of the property that covers the TLC, some allow over bidding (you pay more than the instrument is worth on day one).

Edited: 06/26/2010 at 04:43AM

Stephen Kasher

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Icon_minipost Feb 19 '08, 04:54 AM

Yeah I've gotten some very good info on the different methods and rates for different states and counties. Do you happen to know what the market is, if any, for reselling the liens after you've bought them from the taxing authority? I.e., assigning them to other investors?

Edited: 06/26/2010 at 04:43AM

Adam Wild

Homeowner · Grand Rapids, MI

5 posts

Icon_minipost Apr 04 '08, 06:27 AM

Originally posted by "boxcar"

Yeah I've gotten some very good info on the different methods and rates for different states and counties. Do you happen to know what the market is, if any, for reselling the liens after you've bought them from the taxing authority? I.e., assigning them to other investors?

I was just on ebay and this actually looks like a profitable strategy. There are liens/certificates on ebay with a face value of $30-100 that are selling at ten times that cost with the seller also requiring a $195 processing fee. Doesn't make a whole lot of sense to me why someone would buy a $30 certificate, which lets say gets 18%...so in a year you have $5.40 of interest. And if the property owner pays off his $30 debt, that's all you get is $35.40 when you just paid maybe $100 for it on ebay, then paid $200 to get it processed. The certificate holder just lost $265. Maybe I'm looking at this wrong but that's the way I see it.

Edited: 06/26/2010 at 04:59AM

Ned Carey

· Maryland

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Icon_minipost Apr 09 '08, 10:44 AM

It depends on where you are. I have seen the interest rate bid down to as low as 2.5% in Baltimore and less than that in Anne Arundel county in Maryland.

But just like any investing the best deals are the needle in the haystack. How good are you at finding them.

As far as the Ebay buyers paying a premium I haven't a clue why they would do that. Maybe they believe the late night TV guru hype. You might as well buy lottery tickets.

Ned Carey

Edited: 06/26/2010 at 05:01AM

Debby Hawkins

Homeowner · Breckenridge, MI

5 posts

Icon_minipost Apr 23 '08, 01:21 AM

I've been learning of a new wrinkle on tax liens/deeds. And this makes more sense than putting them on ebay. There are folks out there that are contacting the home owner before it goes to auction. There is even one gentlemen that has a system to find these folks before the property is seriously behind in their taxes. Offers are being made to the owners to buy their properties for less than $500! And they are taking the offers. So the property is offered to wholesalers for $5,000 (on average) and all deals are done and money in the pocket within 6 weeks. That sounds much more profitable than waiting for a 3 year redemption period.

Edited: 06/26/2010 at 05:05AM

Ned Carey

· Maryland

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Icon_minipost Apr 23 '08, 02:26 AM

>Offers are being made to the owners to buy their properties for less than $500! And they are taking the offers. So the property is offered to wholesalers for $5,000 (on average) and all deals are done and money in the pocket within 6 weeks.

Ah if it were only so easy. Yes approaching them before or even after the auction is a good strategy. Last year I had several offer me their properties for $1. The problem is the back taxes and/or mortgages were more than the property was worth.

It can be a very profitable strategy but the success comes from working it and filtering through a lot of mediocre and bad deals to find the winners.

>There is even one gentlemen that has a system to find these folks before the property is seriously behind in their taxes.

I don't want to discourage you from the strategy but I would be skeptical of such a system. If every jurisdiction is different how is one " system" going to find them all. The sales pitches make all this stuff sound easy. It's not. It is profitable but it is not auto pilot riches.

PS; I see from your profile you are interested in liens. Tax lien investing is an improtant part of my business. You are welcome to ask more questions and I'll help any way I can.

Edited: 06/26/2010 at 05:05AM