Tax Lien Certificates

15 Replies

Hello, My name is Gail from Georgia. I am a newbie looking to purchase tax lien certificates out of state. I am looking to purchase online, because some of the tax lien certificate states are too far from me. My state is tax deed state. The reason I`m not sure if I want to purchase tax deeds due to the fact I would not want to get stuck with a non desirable property. My concern with purchasing tax lien certificates, is I would like to know if you are stuck with a certificate that has other liens on it such as bankruptcy or any other liens. Also how safe is it, and what is the work involved to purchase these tax lien certificates online. If any one can please help me with my concerns, it would be very much appreciated.

Best thing I did to learn about tax liens is pay $99 and join the taxlienlady.com

She has many videos on her site about tax liens and getting an understanding. I signed up for one month and crammed in a lot of videos and readings. I do not believe you need to purchase all the other materials they sell but it depends on your experience and how quickly you understand it.

Your questions are too much to answer in this forum as it relates to other liens and bankruptcies as it really depends on the situation. Like anything, the $ is not guaranteed and its a risk. Due diligence is the best way to avoid risks in any investment including tax liens. 

Please note I have no affiliation or association with the website I note above - there are many sites to train on tax liens - I am sharing my experience with that site in particular. 

Hello Chris, Thank you for responding to my post. I saw the taxlienlady on you tube. She joined up with the guys from Fortris LLC. They seem to be a reputable company to learn the stadigies from. Corey and Tom who formed Fotris LLC have been real estate investors for a number of years. I think I'll take the plunge and buy their program to learn the ins and outs. Thank You once again. Gail.

@Gail Arnold

Have you considered investing your retirement funds in tax liens? This can be a good long term investment for your IRA or 401k especially since you generally don't tap your retirement funds until retirement.

Hello Mark, No I haven't. I never thought about it. I guess it's because I'm afraid of the tax lien purchase being risky, and possibly losing money.

@Gail Arnold Georgia is a redeemable deed state which in reality is more like a hybrid tax lien. For the most part, they function like tax liens except that they require more of a premium bid than a traditional tax lien investment. 

Hello Ryan, I spoke to the county's, and they said if owner doesn't redeem in the one year period than you own the property. During that one year you hold a sheirif deed.

There are some good folks to meet at the Atlanta REIA. I go every month to the main meeting and make good new connections and solidify past connections while learning about all the investing you could imagine. They have separate subgroups that meet and often talk about tax lien investing. It is definitely a great idea to join the local REIA. If can't make the main meeting in Atlanta there is a Northside, Westside, and southside meeting.

Hello Ethan, Thank you for the information.

Hi Gail. I own a few tax liens in the state of Florida. The redemption period varies state to state but Florida allows for Over the Counter purchases online which makes it simple. Plus you earn 18% if you buy OTC. If you end up with the property you need to foreclose. Best thing is to have a Real Estate Attorney do this for you. If nobody pays off the tax (owner, bank and other creditors) the house is yours free and clear. The entity you need to keep an eye out for is the IRS. Your lien does not trump the IRS. You would have to pay what is owed to the IRS before taking possession of the property.

I hope this helps.

Hello Nicholas, Thank you for your help on the Florida Tax Liens. I had looked into the online purchases from there. The only scary part is if I don't drive there and check out the properties. I might be getting involved with junk.

@Gail Arnold

 The OTC are the "leftovers" from the tax lien auction. If you want better quality you can participate on online auctions held. The bid process in Florida is you bid down the interest rate to win. So if there is a property you want that looks decent from your research you can bid 17.75% instead of 18% and so on.

General rule is the auction has the more valuable tax liens than the OTC.

Originally posted by @Gail Arnold :

Hello, My name is Gail from Georgia. I am a newbie looking to purchase tax lien certificates out of state. I am looking to purchase online, because some of the tax lien certificate states are too far from me. My state is tax deed state. The reason I`m not sure if I want to purchase tax deeds due to the fact I would not want to get stuck with a non desirable property. My concern with purchasing tax lien certificates, is I would like to know if you are stuck with a certificate that has other liens on it such as bankruptcy or any other liens. Also how safe is it, and what is the work involved to purchase these tax lien certificates online. If any one can please help me with my concerns, it would be very much appreciated.

 After the one year period, the Sherriff's deed clears all other encumbrances on the property in Georgia. So you don't have to worry about their liens after that period. Georgia isn't the easiest state to buy tax deeds, but it is pretty safe.

@Gail Arnold

Buying tax lien in FL. Most good liens get bid down to under 5%. But if the owner redeems, you will get a penalty of 5% even if you bid less than 5%. After two years, you can apply for deed sale, But at the same time, you will have to pay off other lien holders. If nobody bids at the deed auction, you are the deed holder. Watch out for the homestead property. If the lien that you have; were homestead. The starting bid will be 50% of the assess value; NOT THE LIEN AMOUNT + INTEREST. 

Example below.

Outstanding lien amount $5000, interest & charges all included. Assess value $100,000. Starting bid will be $50,000. If no ones bid. You are the deed holder. You now need to pay out $45,000 to cover the difference. It is very unusual that no other bidders though.

FL lien has a 7 year life, if you do not or nobody else foreclose within the year 3 to year 7. Your lien is no good after year 7. Read FL statue197.

Georgia redemption right: after 1 year. You have to foreclose on the right of redemption. It will take a minimum of 45 days. After foreclosing right of redemption, you can wait out the 4 year of statue of limitation or you can clear title( same with FL).

Most GA deeds bid up to 80% of retail from what I observed from the last three sales that I attended this year.

Hope this helps

Hello Lou Gonzales here, I am just starting out with tax liens also heard about them in a roundabout way. I was at a real estate seminar and they introduced a gentle man who gave an informational speech about using your self-directed IRA retirement fund to purchase not only real estate but other high interest yielding products permitted by law. A lot or most people don't know that you're allowed to purchase various things through your IRA which can explode your returns. I use Quest IRA as my managers, if you google Quest there is tons of information on their site or google self directed IRAs look around plenty of info. and maybe take a look at United States Tax Lien Association again lots of info, cost me $27.00 I have no affiliation with either. The one thing you will learn is how to do your due diligence. They do try to sell you but no need to buy, they give you the info you need to get started what they try to sell is a system but with the info they give you you don't need it. Check it out and good luck. Lou

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