Tax Lien Basics (Alabama)

4 Replies

Hello Fellow Investors!

Just thought I would take this opportunity to share with you some additional basics that I have learned within my short venture into investing with Tax Liens.

My state (Alabama) currently has a 3 year redemption timeframe and pays approximately 12% per year.

Ok, I assume you know the foundation on how to find listings and researching the properties etc.

My discussion will begin with what happens after you purchase your Tax Liens.

Firstly, be aware that most Tax Liens will be redeemed approximately 90% are repaid within the first year.

Secondly, after the sale the previous owners are usually notified that their property has been sold and outline their rights of redeeming the Lien without additional consideration (aka cost paid to you the purchaser) if made normally within 10 days of notice.

Thirdly, the annual percentage rate will only begin after you have held the Lien after 30 days; therefore you will receive only the original cost you paid on the Tax Lien; no more, no less.

Lastly, you are not the homeowner just a Lien Holder therefore no keys, no access to the property, no look through so etc.  It is important to remember this prior to considering investing in these instruments.

I will be periodically, provide you with updates in my personal journey into this arena and all information is specific to my locale and view-point.  As always, please remember to research and seek profession counsel..the money you save and grief you save is truly your own.

Hi. I realize your post is 2 years old but I would love to hear more about your experience with tax liens. I had a friend ask me about this today and I only have a surface knowledge of how this works.

Hope you doing well.

Thanks!

@La Ferria T.

I second the previous post. I'd like to hear more about your journey into the tax liens of Alabama! 

Originally posted by @La Ferria T. :

Lastly, you are not the homeowner just a Lien Holder therefore no keys, no access to the property, no look through so etc.  It is important to remember this prior to considering investing in these instruments.

This is incorrect advice.
Please see Alabama Code Section 40-10-174 


“Any purchaser of lands at a tax sale other than the state or anyone claiming under him shall be entitled to possession of said lands immediately upon receipt of certificate of sale from the tax collector

Keep in mind this does not mean that you can just go and kick the people out of there house.  It really is not this simple. 



As well - for redemption periods please see the following post.
Alabama Tax Sale Redemption Rights, Denise Evans post.

For those interested in this, please see this post from the market place. (I myself am very happy with this purchase) 

@La Ferria T. , @Rich Preston , @Cody Noblin , Alabama tax sale investors are entitled to take possession of property as soon as they receive their tax certificate, usually 5-15 days after the auction. Read the article linked in a prior post about redemption rights. Interest accrues from the date of the auction until redeemed.  If the property contains a residential structure and you make repairs, the redemption price tag includes the amount by which you increased the value of the property.  Alabama Tax Sale Investing is a GREAT investment strategy.

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