Befor investing in tax liens

2 Replies

Is there anything I should know about a property before investing in the tax lien of it? Should I find if there are any other liens on it? Or am I safe to just invest on any over the counter liens because it's backed by the city that my investment will be returned?

This depends on where you are located and he laws in your state.

I do not have time or money to do a Title Search on 1000 properties that I might bid on at auction. If it is just the one then it wouldn't hurt to have a title search completed.

Laws are strong in my state so I do not do detailed searched on properties I am going to buy a tax lien on. I have had to go to court a couple times after I have received my tax deed and the judge takes one look at my deed and rules in my favor (so far).

Unless you are looking at a type of tax lien that I have never heard of, in no way is the lien "backed by the city" and you are absolutely not guaranteed to get your investment back. The only thing you get with a tax lien is priority over other liens such as mortgages and judgment liens. If the underlying property is worthless or worth less than your lien plus what, if any, additional costs you may incur to enforce the lien, then you will lose money. You have to be especially careful of over the counter liens as those are usually the ones rejected by all the investors who attended whatever sale/acution held by the county when the lien was first offered.

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