Tax Lien Investing… I have questions.

Member since 2019 · 35 posts · 9 votes

Ok… so I understand tax lien investing as a race to the bottom. Meaning… investors compete against each other, lowest interest rate wins. Right?

Owner has a set time period to pay the back taxes that you paid back in full or they lose the property. Right?

My real questions are… what about any first or second lien holders? Do the banks/lenders have the option to pay you back, with interest accrued or you get the property? How could you win a property has a loan against it for $200,000 (example)? You wouldn’t just be awarded a property when their are lien holders in place that have rights, right?

I appreciate your help and expertise.

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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
2y
Quote from @Paul O'Connor:

Ok… so I understand tax lien investing as a race to the bottom. Meaning… investors compete against each other, lowest interest rate wins. Right?
Owner has a set time period to pay the back taxes that you paid back in full or they lose the property. Right?

My real questions are… what about any first or second lien holders? Do the banks/lenders have the option to pay you back, with interest accrued or you get the property? How could you win a property has a loan against it for $200,000 (example)? You wouldn’t just be awarded a property when their are lien holders in place that have rights, right?

I appreciate your help and expertise.
Properties with significant equity and have a mortgage on it the mortgage company typically pays it so they do not get wiped out. There is a forum on BP on tax liens where you can learn a lot about the business.
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John UnderwoodPro Member
Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
2y
Depends on the state.
Many states start the bidding on taxes owed and go up from there.
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Ashish D.
Investor · Member since 2024 · 21 posts · 11 votes
2y
There is a notification period where the parties need to be notified before you file a TDA. No one is paying you, they pay the county and the counties pays your investment with interest (simple interest).
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