Tax lien investing has been a tool used by the savvy investor and corporations for over 100 years to accumulate large profits.  This strategy is so easy that it is overlooked by many as not profitable.  Most of the Real Estate educators have limited knowledge of this as they have determined this to be an advanced strategy.  Most of the large companies that spend BILLIONS of dollars per year are happy to see this.

So why spill the beans now?

I have been promoting this strategy since I learned about it in 1998 while working as a paralegal in a law firm located in Parsippany, NJ under the guidance of the partners Mike P. and Ralph A.  I was just one of several paralegals preparing the foreclosures of tax liens held by our clients.  During my time there I began to see a pattern among our clients in that they were making large sums of profits in this area.  I began to look for books on the subject and found only one which did not provide much more than a few paragraphs on the subject.  Thus began the quest to learn more the old fashion way, doing it.

Tax Liens and Tax Deeds are a way to get property for just pennies on the dollar where you can own a property free and clear of all liens and encumbrances.  Just think of going out and purchasing a home valued at say $80,000.00 for only $3,000.00. You could keep the property, fix it up and rent it out and make a great ROI over time. You may want to clean it up and sell to a homeowner for $50,000.00 to $60,000.00 and receive a huge profit. Some may just want to sell it immediately (aka flipping) to another investor for $20,000.00 and pocket a good profit without ever getting your hands dirty.

You may have seen the late night ads on TV and wonder if they are true.  cannot speak for TV, but I am here to tell you it does works and I have been making money at this since 1999, just one year after learning about it from the law firm I was employed at. Oh. One more thing. I was doing so well at this that I stopped working as a paralegal and became a full time investor after only 2 years. Over the years I have purchased thousands of tax liens with property values in the millions of dollars.  I have taught thousands of students to invest in tax liens and tax deeds in the US and overseas.

So how can the average person get started now?  This is the best time to start in over 10 years as the market is perfect for getting very high interest returns.  So let’s see what you can do. First you need to find out where the next tax lien auction will be held. If one is online then that will be great as you can do it right from your computer. In the first week of May thru the first week of June there are tax lien auctions in the state of Florida. Of the 67 counties, more than 23 of them had internet auctions to sell off their delinquent tax liens. I had registered for 19 internet auctions and 1 live auction.  I had set limits to how much I would spend and how low I would bid the interest rates down.  While many investors had bid the interest rates down below 5%, I stood fast at 18% and never allowed my position to be compromised.  When all was said and done, I walked away with several hundred tax liens with ALL at 18% interest earned.  The method I used was no different than the system I used when I bid for ATF in the early stages of my investing career where I was known as one of the most aggressive bidders in the circuit.  It is the same system I used to get the advantage over the large corporations and is what I teach students all over the world.

In Pennsylvania, some counties have two different tax sales; the “upset” sale, and the “judicial” sale. If tax sale properties are not sold at either of these two sales, the property then goes on the “repository” list and can be sold by private bid. The upset sale is held every year in the fall. It’s called an “upset” sale because the minimum bid for the properties in this sale is known as the “upset” price; which includes any unpaid taxes from the county as well as any municipal liens. If a property is not sold in this sale, it is sold in the “judicial” tax sale in the spring. Not all Pennsylvania counties have judicial sales but they all have an upset sale.

What you may not know about the upset sale is that all properties are sold subject to any liens or judgments. That means that if you purchase a tax deed at this sale, you are responsible for any other unpaid liens or judgments on the property. Most people assume that when they buy a property at a tax sale, they don’t have to worry about other liens such as a mortgage. This is not true at the upset sale. If you plan on bidding at any of these sales this fall, you’d better do your homework!

So how do you find out about other liens or judgments on tax sale properties? There are two ways that you could do this; one is going to cost you some money and the other is going to take some of your time. The first way is to hire a title search company to do a simple title search on all of the properties in the sale that you are interested in bidding on. This could turn out to be a little costly, so it’s not my method of choice. Another reason why I don’t hire a title search company to do title searches for me before the sale is that many of the properties will come off the sale list the day before or the morning of the sale. You may pay for a few title searches that you don’t even need because the properties that you wanted to bid on are not sold at the sale.