tax liens

[Robert Ilario]

I am curious about tax liens. Does any one know exactly what a tax lien is and how do I profit from them, I received a notice from my county about upcoming auctions and I was just curious how it works.

Bob

Long Island

[Ned Carey]

@Robert Ilarioessentially the government is selling you the right to collect the taxes. The government gets their tax money to day and you get to collect the interest and penalties. 

Ultimately if the taxes are not paid you can foreclose and take the property. If you do foreclose in most states an mortgage or other liens are wiped out. You own the property free and clear. 

That is the simple explanation but the devil is in the details and the details vary by state and sometimes even county.  Virtually every "Guru" that I have seem ads for overstates the benefits and ignore the risks. Often they deliberately mislead you to get you to sign up for their class. The pitch is often that it is risk free and the returns are guaranteed by the government. Nether of which is true.

I haven't read it myself but I have heard that the book "The 16% Solution" is very good.  There are many tax lien experts here on BP.