All Forum Posts by: Rushabh Sheth

Hello all,

I'm located in California and I have a question about a California county tax deed sale. If you win the bidding on a tax deed and receive the deed to the property (with or without the redemption period), are the private liens wiped out? Private liens include:

- mortgage liens
- homeowners liens
- mechanics liens

I understand that government liens (eg. state tax liens, IRS liens, etc.) are not wiped out and still remain. But I would like confirmation that the private liens are indeed wiped out. Thank you.

I have invested in hard money lending in the past and the terms I got were usually for 12% to 14% with 3-4 points AND most importantly, a maximum 1-year term with option to extend.

Since the note has a 10-year term, you should discount this note by say, 10% to 20% to adjust for the following long-term factors:

1. interest rate risk
2. credit risk
3. housing price risk

If the note term was cut to 5 years then the discounting would be much less, obviously. Ideally, you want to buy the note at face value only with a 1-year term or sometimes 2-year terms, depending on the person's credit profile.