Is Tax Lien Investing Foolish?

Flying somewhere over the Gulf of Mexico, it hit me. Why would anyone ever invest in tax liens if they knew the alternatives? After spending nearly 2 weeks preparing and 3 days sitting on a hard courtroom bench, my time in Biloxi, Mississippi had come to an end. I had just attended the 3 day tax lien auction for Harrison County, Mississippi.

You see, my background is in purchasing properties at tax deed auctions or tax sales - not purchasing tax liens. To summarize, if a property owner fails to pay property taxes the governing agency in many states will auction off a lien for that property to an investor who essentially pays the owner's property taxes for a set interest amount in return. If that tax lien does not get redeemed or paid according to that state's laws, the actual property gets sold through a tax deed sale or tax sale. In other states, the lien isn't sold to an investor, but rather "held" by the county and if the property owner fails to redeem the lien the county takes ownership and sells the property at a tax sale.

I had previously purchased tax liens, but I had never put this much effort into a tax lien sale. I wanted to give it my complete time investment to make it as successful as possible.

Reviewing my notes on that plane ride home, I realized that I might make 18% on a few of these investments. Then it happened... I asked myself why on earth would anyone spend a week away from home, after two weeks of non-stop preparation to make a measly 18% return? Why would anyone who is trying to grow wealth, invest in anything for 18%? If I invested $10,000, that's only $1,800! That's not going to change anyone's life!

Tax lien investors constantly gleam and mention "double-digit" returns. If I make a double-digit return on one of my tax deed investments, I consider it a failure. Buying properties from tax deed sales is a much more lucrative business. The properties that I purchase at tax sales constantly provide returns of over 200%. If I don't think it'll provide at least a 200% return, then I won't even consider purchasing it.

Buying tax sale properties requires the same research as buying tax liens. The golden opportunity for that "amazing" tax lien with potential double-digit returns is the possibility of the owner not redeeming the lien and you might (depending on the state) be able to foreclose that lien to become owner of the property - so it's important you know everything you can about that property you might end up with. If you're doing all this research why not go for the golden opportunity to begin with!

Did you know - in some states you can buy properties for less than the cost of investing in a lien for a similar property? If you have thought about investing in tax liens, or already do so, I urge you to reconsider your options... your money will go much further if you learn how to properly invest in tax sale and tax deed properties. You can change that wonderful double-digit return into a 200%, 300% or better return if you learn the proper steps.
The sky is the limit.If you are interested in learning more about Tax Deeds and Liens, you should click on the link below. It is a great place to get started if investing in real estate is what you are looking to do. Yes, you can still make a fortune in Real Estate with this Ultimate Real Estate system. >>> http://bit.ly/1ukjzFZ  

Casey Denman is a veteran tax sale investor with over a decade worth of unparallelled experience investing in more than a thousand properties in numerous states. A very active investor to this day, he is the founder of http://www.TheTaxSaleAcademy.com which teaches proven tax sale investing strategies and methods.

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