Posted over 8 years ago

First time tax lien investor - your first step

Over the last few years on Biggerpockets I realize my most used answer to new tax lien investors has consisted of one thing; a link to their state tax lien statutes.

That is rule #1 in tax lien investing. Know the rules for the area you are investing.

They're usually pretty easy to find. So my tip for the day is to use Google and do a search for your state tax lien statutes by doing this search:

"<your state name> tax lien statutes"

Illinois tax lien statutes -or-

Florida tax lien statutes

You may have to look through the first page or even second page of results to find the statutes. Some tax lien gurus have done good SEO and made their web pages rank higher than the actual state web pages that list the statutes, but you will usually find them.

If you're not sure if your state is tax lien or tax deed, then do a Google search:

"Is Illinois a tax lien or tax deed state?"

I actually just created a spreadsheet that lists all the states that sell tax liens and uploaded it here to BiggerPockets. NOTE- States change their tax lien sttuates all the time so this information is a snapshot as of the date I created it. Make sure you review that most current statutes.

You can download the file at this link:

http://www.biggerpockets.com/files/user/gmkrull/file/tax-liens-by-state

The second step is to read through the statutes so that you understand the procedures. They will list out how a tax lien is sold, the redemption period for the owner to pay off the lien and redeem their property, how to foreclose on a lien, etc.

It just makes sense to learn the rules and know what you are buying and how a lien will operate in the area you invest.


Comments (4)

  1. In researching the tax lien lists I see so many builders and investors that have multiple properties with multiple years of tax liens. Isn't that going to destroy their credit ratings? Do you target these types of properties when researching?


    1. Tal, Sorry, I did not get any alert you left a message to this post. Failure to pay real estate taxes does not appear on your credit history. It doesn't affect your credit rating at all. There are chronic late payers and some don't pay taxes until they are about to lose the property. 


  2. Great spreadsheet!!!


  3. Nice Blog post Jerry!