Some typical Tax Lien results of mine...
I've been buying tax liens on and off since 1988. Then in early 2010 I moved into investing in AZ tax liens through online auctions. Have been doing so with stronger amounts each year since then. Also have been studying the Florida auctions for three years, looking to buy liens there too.
The first year in 2010 I bought three liens. Two were on vacant residential land and one was on a newer single family home. I received a 7% rate on the home lien, and a 9% and 4% rate on the two lot liens.
The 4% lot lien paid in the first month after the auction - $16 and change. Still better than what the money would have earned in a savings account.
The lien on the home property paid off about 18 months later. 7% for 18 months was much better!
The last lot at 9% did not pay and I paid the subsequent year taxes each year and earned 9% on those amounts too.
In AZ there is a 3 year redemption period. 3 years for the date of sale of the first lien, the lien holder can begin foreclosure. You actually have to give 30 days notice prior to foreclosure.
The 9% lien was days away from me sending the 30 day notice. Yesterday a check arrived in the mail from the county. The owner paid off all the liens and interest.
Almost $1,000 in interest - all for doing nothing more than a little research at the beginning to make sure the property had value and no EPA or other legal entanglements. Win the bid for the lien in the auction (online and done from my home office). Then just pay the sub taxes each year.
About as passive as you can get. No tenants, no renovations, no toilets.
9% for three years and almost no work. Yeah you can get higher returns in all other aspects of real estate, but for the amount of work I had to do, I'll take this type of lien investing for extra cash that is sitting in savings.
Oh and now the funds are back in my possession and will be used to buy more liens in the AZ lien auctions that start next week.
I have 6 other liens on lots that are earning 16% interest that are also at the 3 year redemption. I bought these liens in the 2011 auction and they already had a year of unpaid taxes on the books. No lot is as valuable as the 9% lot, but either I'll get my 16% interest or I end with the lots that will be worth more than twice what I'll have paid in taxes and foreclosure costs.