Texas Tax Liens: Are they really worthwhile?

[Stanley Denman]

Trying to think through the business model for tax lien buying, and as is my cynical  nature, I see the opportunity as narrow and seek feedback from perhaps those less jaded.  It seems to me that in order to buy a tax lien you have to assure yourself that the property is one you would want to own, hence a property that will cash flow.  If a worthwhile, positive cash flow property, one has to wonder why in the world would the owner get in tax trouble.  I would think that at the minimum a fair number, perhaps the majority, of tax lien properties simply suck.  In which case the only other possibility is that the owner is just an idiot or is lazy.  In which case, would he/she not have had plenty of chances before getting to the tax sale stage to unload the property to a savvy investor.  In short, it seems to me that the number of worthwhile tax sale properties would be very very small.  And with the interest in tax sale properties, the multi-dollar tax deed purchase course and materials, you are going to have hoards of buyer chasing this small number of deals, pricing them up to the point they are no longer deals.  Do I paint an overly pessimistic picture?