Industrial note investment investment.
We bought a tax lien, then negotiated successfully with the property holder for a payoff. This is not glamorous (see the photo) but we helped the city to keep the lights on, police paid, and schools working so it's a nice win-win for the city and us as well.
What made you interested in investing in this type of deal?
It used to be good business but has become harder to make money with increased regulations and hurdles.
How did you find this deal and how did you negotiate it?
We were quite new to the scene and this was at the time our largest purchase. We held the lien for several years, interest accrued, we learned more and got a lawyer to negotiate the terms for us.
How did you finance this deal?
This was cash out of pocket which isn't effective leverage. With a bullet payment at the end of an undetermined term, leverage becomes risky.
How did you add value to the deal?
We used Waveapps.com to track the liens which is a great platform. I researched the property owner across Property Shark, then reached out many times to collect. Only when we threatened legal action did the property owner call us back.
What was the outcome?
We received payment along the lines that we had hoped for. Not quite as good but still a positive result.
Lessons learned? Challenges?
The #1 lesson is that tax liens are hard to make a living in. They are a nice hobby but not an occupation.
Adam, l take it this a property tax lien? Help me understand what you are saying please. You held a tax lien for "several years,interest accrued"... are you talking about taxes? What about the redemption period, Most are three years. If you had the property for several years he couldn't have redeem the property after three years. Forgive me but l totaly confuse please help me understand what happen here. Also here Mobile we have a large sec 8 community and tax liens homes are modestly repaired and rented out to sec 8 ranging from 800-1000 per month while holding the tax lien. Thanks
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