Buying Tax Liens in Texas

3 Replies

I am needing some advice on buying tax liens against a property. I know all about the perks of purchasing them but I am unaware of all the risks that come with it. Could somebody lay out the risks and what to know with purchasing tax liens. What should I be concerned about? I would be happy to here some actual experiences with purchasing these so that way I can make a more educated decision on how to buy.


The main risk in my opinion is not knowing what you are bidding on.

Check for IRS and state liens.

Also while you are waiting on redemption period to end (which is very short in TX), something could happen to property. Also you can't inspect property prior to auction to see if you have things like structural issues or termites.

No tax liens in Texas ....we are a tax deed state.

All kinds of really want yo know what you are buying....

Risk of taxes not covered by the suit.

Risk of other liens...

Risk of condition...typically you don't get to see inside first.

Environmental risks...meth...oil changers ...underground storage tanks...

Notification risks....relatives or owners sue you because the county or attorneys did not properly notify them.

Title insurance....resale ...marketability risk.  

Eviction and occupancy risks.   

These are the ones that come to mind first.....probably more.

I agree with what @Bruce Lynn had to say.  Another consideration is the redemption period, which is 2 years for owner occupants.    You have to be willing to hold the tax sale property as a rental for 2 years, because you'll find it hard to get title insurance before 2 years even if not owner occupied. 

The auctions are very competitive in Texas major metros and hedge funds are bidding at full price.  You may be able to find deals in the smaller counties.