Tax Lien Investing - Pros and Cons

Tax Lien Investing - Pros and Cons

Specialist · Washington, DC · Member since 2019 · 45 posts · 20 votes

Snapshot: I have one rental that was my primary residence, so there wasn’t a lot of research involved beyond me not wanting to sell a California home because they generally go up and up. But now I’m like a medical researcher analyzing every variable.

Currently I’m learning about tax lien investing. There is a potentially lower amount of capital needed which is enticing, but there is also potential to get stuck with a property with many hidden costs. Has anyone had consistent experience with this method?

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  • John UnderwoodPro Member
    Investor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
    6y

    You need a pile of cash to be able to buy a bunch of tax liens which increases your odds of getting some properties.

    It has gotten very competitive with properties that used to go for 2k now going for 30k each.

    That is the experience in my area.

    You would likely have better results in smaller counties where the guys spending a few million each don't bother attending.

  • Specialist · Washington, DC · Member since 2019 · 45 posts · 20 votes
    6y

    @John Underwood thank you for your reply. That is great insight, I’m in that stage that many beginners are in: limited cash but enough to want entry into something. In the meantime I am reading and watching YouTube videos to see how I ant to go about acquiring property #2.

    I’m watching videos on deed flipping, but I’m starting to think I’m better off finding a rural purchase of a property that’s cheap. I’m handy and have flipped a couple of properties for friends, trying to asses what my best angle is, as many others are. I appreciate you sharing your perspective though, it is helpful.

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