Real Estate Investing Basics

A Five Step Guide to Start Investing in Tax Lien and Deeds

Expertise: Mortgages & Creative Financing, Real Estate News & Commentary, Real Estate Investing Basics
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5 Step Guide to Start Investing in Tax Lien and Deeds

Fellow investors… welcome to 2014

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Tax Liens and/or deeds investment skills should be in every investor’s investment toolbox for 2014. So how do you find tax liens and deeds to invest within? The goal of this article is to help you do just that.

Step 1: Select Your Strategy

Decide on your investment strategy: Tax Liens or Tax Deeds

Step 2: Select Your State

Once you have decided on your investment strategy then you need to decide on your investment location. Selecting where you want to invest is a personal risk-reward balanced decision. The resource link below should help decide which are tax liens and deed states:

Resource: Tax Liens and Deeds

Once you have defined your investment zone then you need to understand the tax lien and foreclosure laws of your selected state. You can spend the time researching the statues of your state or you can use a resource such as RocketLawyer to seek out the advise of a local attorney without having to Google around for hours.

Step 3: Define Your Investment Zone

Once you have selected your investment states then it is a good idea to speak with local realtors, Chamber of Commerce or Visitors Bureau to get information and statistics to refine your investment zone. Additionally, you can utilize secondary research sites to help out as well:

http://ww.uscitycounty.com/all-us-counties.htm

http://quickfacts.census.gov/qfd/index.html

Step 4:  Finding Tax Sale Listings

Once the investment zone is defined then you need to find the list. Here’s how you find the list in two steps:

  • First, make a list of all the counties that are in your investment zone.  One resource that you can use to make that job easier is the National Association of Counties (NACo) website and go to “Find a County” map.
  • Second, call the county tax department and find out their procedure to request a tax lien or deed sale list.

Typically you can send a request letter to the county tax collector and include a pre-paid envelope for them to mail back the upcoming tax sale list.

Step 5: Bid

Once you receive your tax lien or deed list, you need to organize your list and conduct research and bid on your first investment.

It is just that simple. Tax lien or deeds can be a great investment tool as you decide on how to make your 2014 investments. Use this guide to help invest in your first of many deals!

Happy Investing!
Photo Credit: Infinite Jeff

Ankit Duggal(G+) is the Investment Director of a New Jersey Income Operating & Consult...
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    Adrian
    Replied over 6 years ago
    I’d love to hear more about step 5 – “organize your list and conduct research”. What are the best houses for tax liens? What are the requirements? Procedure? Benefits and drawbacks? What should be researched and how? Thanks for the article.
    Ankit Duggal
    Replied over 6 years ago
    Adrian You ask and I shall deliver. I will work on follow up posts that address the following: Benefits and Drawbacks of Tax Lien Investing What should be researched and how I have completed articles on the risk elements that goes into the benefits and drawback discussion here: https://www.biggerpockets.com/renewsblog/2013/12/18/tax-lien-investing-top-three-risks-can-derail-profits/ https://www.biggerpockets.com/renewsblog/2013/12/31/successful-tax-lien-investments/ Happy Investing Ankit
    Adrian
    Replied over 6 years ago
    I’d love to hear more about step 5 – “organize your list and conduct research”. What are the best houses for tax liens? What are the requirements? Procedure? Benefits and drawbacks? What should be researched and how? Thanks for the article.
    Gerald Harris
    Replied over 6 years ago
    I ordered a Tax Lien investing program years ago. I know that there is an element of risk involved. I believe your best bet before diving into this aspect of the real estate investing business is to do your homework, hire a mentor and take action! I have several people at my real estate investing club that do well at this aspect of the business.
    Gerald Harris
    Replied over 6 years ago
    I ordered a Tax Lien investing program years ago. I know that there is an element of risk involved. I believe your best bet before diving into this aspect of the real estate investing business is to do your homework, hire a mentor and take action! I have several people at my real estate investing club that do well at this aspect of the business.
    Susan Cain
    Replied over 6 years ago
    For the past four years, I have spent the month of May researching the available Certificates in various Florida counties. Since Fl sales attract institutional investors, the challenge is to find good properties that are not homesteaded, as those are certain to have around 1 million bids by the morning of the sale. I buy in FL because the auctions are online, there are a number of out-of-state owners, who forget to pay the taxes on a second (or third) home, or a property they bought for retirement and forgot about, the redemption period is relatively long (a lot of payments are made after two years, when you can apply for the deed.) Since I consider this play money, I’m willing to wait and collect the interest, which can be as high as 18%. Since I don’t want the property, I have never invested in Deeds, but I’ve met investors who have gotten great deals at Auctions (also online in Florida.)
    Cynthia Jacob Renter from Brooklyn, New York
    Replied over 5 years ago
    Thank you for such awesome content in this article. I am very much interested in Tax Liens as my beginning niche in Real Estate Investing. My interest is in tax liens in PA. How much money should I have on reserve to start out?