Knowledge Check - Texas Tax Lien

[Matt Delashaw]

TLDR; Is my understanding of tax liens in Texas are purchasing the tax debt with the property as collateral, and you dont out right own the property?

Im brand spankin new to REI, at least from an investor only stand point. I was starting to browse my county's tax auction site. I found a property that im interested in, and maths out well. Ideally I would like to BRRRR this property, and I realize I could contact the owner as they may be motivated to sell.

If I won this property at auction, I dont out right own it immediately, correct? I just purchase the debt? So lets say its a $100k house with an opening bid of $10k. If I won the auction at $10k, Im taking on that tax debt and I am going to get paid back the $10k + 25%(2,500) per year?

Bonus question: what are the pitfalls here?

[Ned Carey]

@Matt Delashaw actually I am pretty sure TX does not sell tax liens. They sell tax deeds. You are buying a deed to the property. However in many tax deed states, the deed may have limitations like the owner may have the right to redeem for a period. Also you may not have the right of possesion imediately. 

There are TX tax lien experts here on BP. I believe @Arnie Abramson is one. 

You are correct in the sense that in states that sell tax liens you are getting no ownership in the property. You can ultimatley foreclose on a tax lien but no ownership rights are conveyed simply by buying the lien.