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Updated over 8 years ago on . Most recent reply

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47
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Steve Dussault
  • Real Estate Investor
  • Indianapolis, IN
10
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47
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How to borrow money to buy tax liens?

Steve Dussault
  • Real Estate Investor
  • Indianapolis, IN
Posted

Indiana is a tax lien state with a one year redemption period at which time you are issued at tax deed if the property is not redeemed. I've been watching the tax sales and there are some houses that are acquired at very good prices!

I have good credit and good relationships with local lenders. I would like to borrow money to buy tax liens, but when I ask at the bank they've never heard of it.

I would think that I should be able to pledge the tax certificate just like any other collateral. Anyone have any experience doing this or know of any lenders that do this?

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George P.
  • Real Estate Investor
  • Baltimore, MD
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George P.
  • Real Estate Investor
  • Baltimore, MD
Replied

Copying info from linkedin group "Investing in Real Estate Tax Liens and Deeds":
1. suggested lender www.lienfinance.com
2. Moderator's responce to a question like yours: "Actually banks like Capital One and Wells Fargo do secure these loan via the liens you purchase. First, they look at your track record for the past three to five years minimum. Second, they are going to require you to have skin in the game by 20% to 30%. Third, they may also leverage other liens that you currently hold. These banks consider these securitized loans.

These banks have been doing this for a number of years and understand this business model very well. But you are talking about loans for millions of dollars with well vented tax liens investors.

If you are starting out and have no track record, you are correct that you will have to get an unsecured loan as your local bank or local lender will have very little idea of what you are doing."

Hope it helps
Join that group if you want to follow up

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