I'd like to start learning about tax liens. Can anyone explain how they work? How do I acquire a tax lien? When do they pay? How much? What do they cost?
From what little I know, these liens are a good way to get going with a little cash. Am I right?
courts auction tax liens to the lowest bidders? how this works is they auction liens starting at 15% and work the bid down...
Say you purchase a certificate for 1000 that is being offered to pay you 15% at the end of the term which i believe is 3 years? not sure.
I then come in and bid on the same certificate for 14%... if you don't go lower, i win the bid. i am then guaranteed 14% on my investment when it's time to collect.
hope this helps
Thanks for the explanation. What determines to value of the certificates, though? You said $1000. Why would it go for $1000, or any other amount?
It is slowly starting to make sense.
Interest rates determine the value. I get the rate that I have locked in as my return... if I lower my rate then I lower my return (but I will win the bid).
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