Updated over 12 years ago on . Most recent reply
Tax Liens are not always as they appear.
Just got a tax lien redemption check from Baltimore City Today. City records show that this was redeemed back in April. It took 3 months to get us our money back from the city!
So what does that do to the interest rate? Instead of the stated rate of 18% We actually received only about 13.5%.
Hey that is a lot better than 2% in a bank CD. However if you are borrowing money to invest this can have a dramatic affect on your business model. This is just one example of the hidden costs and hassles of Tax lien investing.
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Ned, Out of curiousity, how are you structuring these tax lien investments?
Are you pooling the money from all your investors and viewing everything you aquire as a pool? Like a Tax Lien Mutual Fund?
Or do individual investors commision you to purchase X number of tax liens?
If it is the Mutual Fund style, do you have a minimum Buy in for your investors?