If you would like to make lump sums of cash, then instead of pursuing tax liens you'll want to pursue tax deed investing. It's a bit more aggressive, requires more work and creativity, and generally more money to get started but it's worth it if you know what you're doing. The answer is in buying tax deeds.
Instead of offering a tax lien certificate to collect the amount of delinquent taxes, certain states will offer the tax deed to the property for sale. About half of the states sell tax lien certificates and half sell deeds. The state will place a lien against the property just like a tax lien state would but instead of offering that certificate for sale the state will hold onto it. After a certain period of time they will begin or complete the foreclosure process on that property. (The time period that the state holds the lien before foreclosure and extent that the state forecloses caries from state to state) At this point the state offers the deed to the property for sale to investors. The bidding starts at the delinquent tax amount plus penalties and interest.
Not all tax deeds offered are good deals, but this can be one of the most incredible opportunities to make money or accumulate property if you know what you're doing. Tax deed properties have been bought for pennies on the dollar and lump sums are made.
I was in Texas researching properties for an upcoming sale. I looked at all the properties from their most recent struck off list and none tempted me. But the list for the upcoming sale was phenomenal. Of the first 20 properties I looked at 5 met my criteria and were great investments. One in particular stood out. Right in the middle of a neighborhood of well-kept single-family residences sat a little house. Among the neat green lawns this house had long dead grass, chipped paint, and an aged roof and the interior required similar repairs. The houses around it appraised for $75 and this little house could be bought for as little as $15k. My options with the property were endless. This property met my criteria and was a good investment for me.
Tax deeds are an incredible way to make money.
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