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Tax Liens & Mortgage Notes

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Ashish D.
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Why are Tax Liens and Tax Deeds documented evil on this website

Ashish D.
  • Investor
Posted Feb 19 2024, 19:15

I've read through hundreds of post on this website about Tax Liens and Tax Deeds, and almost every single one is discouraging investing into it stating myriad of different problems and nuances. However, when you search the internet, you find hundreds of posts and documentation talking about investors being so successful with it, big ones and small. I've spoken to few investors who have made tens of properties using it. Why are posts and documentation on this website particularly advising against them?

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Replied Feb 25 2024, 11:45
Quote from @Ashish D.:
Quote from @Don Konipol:
Quote from @Ashish D.:

I've read through hundreds of post on this website about Tax Liens and Tax Deeds, and almost every single one is discouraging investing into it stating myriad of different problems and nuances. However, when you search the internet, you find hundreds of posts and documentation talking about investors being so successful with it, big ones and small. I've spoken to few investors who have made tens of properties using it. Why are posts and documentation on this website particularly advising against them?

EVERY aspect of real estate investing has been over hyped, over sold, and over simplified.  There is money to be made in EVERY strategy; however, not by EVERYONE.  Almost all require the following in some combination to execute successfully on a sustainable basis : (1) CAPITAL (2) KNOWLEDGE (3) EXPERIENCE.  The gurus” selling mentorship’s and “canned” programs to a inexperienced investor oversimplify the strategy; ignore the difficulty; incorrectly claim that the education they provide is sufficient for success; lie about their own qualifications and experience and success; belittle “real” business/financial/real estate education and provide a totally unrealistic picture of lifestyle, effort, and chance of succeeding.  

The people I’ve encountered in my 40 + years as a real estate investor and private lender who are successful have the following in common
They are educated as to principles of real estate; real estate law; and real estate finance
They LEARN something new about real estate investing almost every day, and are open to realigning their strategy, tactics, and portfolio to encompass new information and knowledge
They SPECIALIZE either in a strategy, property type or geographical area, and become EXPERT in that area
They have survived real estate “depressions” where property prices have dropped 20% - 50%
They understand the difference between real estate investing, operating a real estate BUSINESS, and having a real estate job.
They network, for knowledge, capital and most importantly DEAL FLOW

The key thing to consider when you watch a YouTube video, take an “introductory” seminar, or read a guru’s website, is what is the subject persons BIAS?  If he’s selling you something, then there’s a very good chance his “pitch” is not truthful.  There are some very good localized mentors that hang around BP and contribute with excellent advice and information on forums, podcasts, and articles.  But something happens when and if they decide to 
go national”.  Those guys end up buying marketing programs from one of a few specialized real estate marketing organizations out of either Las Vegas or Salt Lake City; and the result is the cost of their programs goes from $3000 to $40,000, the quality of their information go from a 8 to a 4, and once you’ve entered their program all your contact is with an employee while the guru is out giving seminars, workshops, and making videos.  

Best post so far. Thank you.

 Need to pin Don post in all biggerpocket threads.

We're in tired over-hyped market in almost everything.....

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Replied Feb 25 2024, 17:09
Quote from @Ashish D.:

I've read through hundreds of post on this website about Tax Liens and Tax Deeds, and almost every single one is discouraging investing into it stating myriad of different problems and nuances. However, when you search the internet, you find hundreds of posts and documentation talking about investors being so successful with it, big ones and small. I've spoken to few investors who have made tens of properties using it. Why are posts and documentation on this website particularly advising against them?


 You should change the question to be like these:
 
in what state AND county is the reward/risk ratio for tax deed is more promising in reality ?

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John Underwood
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John Underwood
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Replied Feb 25 2024, 19:14

I quit my day job as an Electrical Engineer from buying tax liens and turning them into mostly passive LTR's.

Yes their are big risks, takes a lot of research, a lot of cash to increase your odds and it is much more difficult now because more people are doing it and driving up the auction priced.

I typically get 2 or 3 more houses every year from the previous years tax lien auction.

I do not have to foreclose to get my tax deed on unredeemed liens.

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Replied Feb 26 2024, 21:48
Quote from @Account Closed:

It's probably because this website leans more towards caution and risk aversion when it comes to investing in Tax Liens and Tax Deeds. They might be highlighting the potential downsides and pitfalls to protect readers from making hasty decisions. It's always a good idea to do thorough research and consider different perspectives before diving into any investment opportunity, especially one as complex as this.


 This tax Lien/Deed is very niche sub-market. The expert that work in this are usually able to roam freely in specific county and understand the intricacies around it. They need to have money and also time. They also need to have good exit strategy either wholesaling or flipping or rent it out for forever....they are very different than just buy in mls and flip it around strategy.

I still remember there're three or four category of State tax deed regulation, is the OP knows about it ?

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Will Sifert
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Will Sifert
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Replied Apr 9 2024, 08:33

It's simple, because you have real investors here giving you honest feed back. Where as what you are coming across else where is mostly ads or posts by people who are trying to sell you software, programs, classes, etc...     I have made a lot of money from tax liens. I have also made a lot of mistakes and lost a good bit of money along the way. I have been doing this for over 15 years. There is a huge learning curve and it's complicated in general not mentioning that each state is completely different from the next. So you will get a lot of people saying " tax sales are great, make easy money, get started with $50 blah blah" and then the reality is they are naive, new or trying to sell you something. The investment strategy is great, now go master how it works in just one state!  They will leave that part out, they speak in total generalities....

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Will Sifert
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Will Sifert
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Replied Apr 9 2024, 08:39
Quote from @Ashish D.:

I've read through hundreds of post on this website about Tax Liens and Tax Deeds, and almost every single one is discouraging investing into it stating myriad of different problems and nuances. However, when you search the internet, you find hundreds of posts and documentation talking about investors being so successful with it, big ones and small. I've spoken to few investors who have made tens of properties using it. Why are posts and documentation on this website particularly advising against them?

I am curious where you are finding all of the posts and websites on the internet about tax sale investing. If you can't post the link here send me a message and I will check it out for you. Other than facebook groups, which I run a couple, there isn't many other places that you can post / discuss tax sale investing.  The documentation you are finding, websites, videos etc... are all there to sell you something, of course they are going to hype it up and down play how difficult it is.

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Jay Hinrichs#1 All Forums Contributor
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Jay Hinrichs#1 All Forums Contributor
  • Real Estate Broker
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Replied Apr 9 2024, 08:40
Quote from @Will Sifert:

It's simple, because you have real investors here giving you honest feed back. Where as what you are coming across else where is mostly ads or posts by people who are trying to sell you software, programs, classes, etc...     I have made a lot of money from tax liens. I have also made a lot of mistakes and lost a good bit of money along the way. I have been doing this for over 15 years. There is a huge learning curve and it's complicated in general not mentioning that each state is completely different from the next. So you will get a lot of people saying " tax sales are great, make easy money, get started with $50 blah blah" and then the reality is they are naive, new or trying to sell you something. The investment strategy is great, now go master how it works in just one state!  They will leave that part out, they speak in total generalities....


or they show their case studies of unicorns.  like buying a home for 20k at tax sale thats worth 250k happens every tax sale !!!

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Kevin Sobilo
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Kevin Sobilo
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Replied Apr 10 2024, 03:21

Here is an (extreme) example of why investing in tax sale properties is risky.

The property in this article was sold at tax sale and this crime scene was discovered only when they were doing a clean-out.

The 2nd victim is the property owner, who could not have been notified about the sale because she was deceased and since nobody knew she was deceased her heirs would not have been notified either.

So, I believe now if the heirs wanted to they could move to reverse the sale, but by now the time that happens the real owner may have invested real money improving the property with no hope of recovering it and nothing to protect them.

BTW, this is local to me and crazy things happen with the tax sale process more often than other kinds of sales.

DA: Five arrested in Wilkes-Barre human remains investigation