Buying Tax Deeds...Good or Bad??

Question

Good morning all,

I was just reading some information about some more investment strategies. I came across an article about Buying Tax Deeds for pennies on the dollar (i.e. buying a home for $1,000 free of mortgage and owning a home possibly worth $50K or $100K and then reselling it for a huge profit).

I am interested in hearing comments and opinions about this strategy. Let's get talking!

Brandon Ellis · Answer

I just finished Rich Dad, Poor Dad by Robert Kiyosaki. Without going into great detail, he mentions that he invest a small percentage of his money (which, by small, I am certain he means hundreds of thousands) into tax lein certificates. He claims to earn 16 percent annually over the 5 percent  earned from a CD (Keep in mind the book was written in '97).  He mentions their lack of liquidity and says he treats them as a 2-7 year CD.

N/A N/A · Answer

Kiyosaki is right, certain states have high interest rates, but you really need to know what you're doing otherwise you get swamp land.  I did it once and I messed up pretty badly.  Then I actually stopped being lazy and started reading books.  My advice is, avoid real estate seminars that charge $3k, buy some books off Amazon or Barnes and Noble that pretty much do the same thing.  My favorite books on tax liens and tax deeds are by Don Sausa.  I also liked Larry Loftis, those two are probably the best ones I've read.

N/A N/A · Answer

The only thing I read about this was that if you pay the tax bill on the property, you move to #1 position ahead of even the first mortgage and can forclose on the property.

N/A N/A · Answer

Hey Marvin,

Yes, I'm interested in knowing about this. It just seems unreal to be able to buy a distressed property tax deed for $500 on a home worth $100K?