2 strategies when buying Tax Liens ?

[George P.]

I can see two major strategies in Tax Lien investing:
1. Buy tax liens hoping to get interest - to do so, look for financed properties (so that the noteholder will pay the taxes).
2. Buy tax liens hoping to foreclose on some of them tax liens. If this is your strategy, what are looking for in a property when doing DD? I.e. absantee owner or long-term ownership?

Please chime in ! :D

[Kyle Meyers]

I think that you would look for an abandoned property for the best bet, but it is difficult to tell which will be lease likely to pay. I bought a few liens about 5 months ago and I am waiting to see how they turn out, they only have a 1 year redemption period so I will be able to foreclose at the end of this year if the taxes are paid off. I looked at notes that were very inexpensive and then checked on the properties to see what the appraised values were for the taxes, how large they were, what the structures were like, what the condition was, what nearby homes were selling for. The county that I bought in had a great website that included floorplans of the properties which helped a lot, I also looked at how much they last sold for and when. I would agree that it is very unlikely you would get the property if there was a mortgage on it, but beyond that I don't think there really is a great way to tell if the owner will pay their taxes or not. It would be very specific to each owner. I would recommend targeting properties that appear to be a little (or more) neglected. If they are occupied or abandoned and have had maintenance ignored it would seem to me they would be more likely not to have the taxes be paid up, of course if they have too many problems which have built up, they will not be worth the amount of the lien.

I will see how my own journey into the world of tax lien investing goes, and I'm sure I will post what happens with them as the end of the redemption period approaches.