Real Estate Broker · Malone, NY · Member since 2013 · 345 posts · 70 votes
Hey, guys! I've got a little capital that I want to invest, and have read a lot about investing in tax lien certificates. What's the absolute best way for a total newbie to get started? Thanks!!
Specialist · Phoenix, AZ · Member since 2011 · 698 posts · 629 votes
12y
@Craig Garrow Everyone so far is right on target. Let me simplify - "Education".
Read a book or two on tax lien investing so you understand the basics. Like the difference between a tax lien and a tax deed. Is your state tax lien or tax deed?
Use the handy-dandy "Search" at the top right of this page and read the posts on here about investing in tax liens. The two main forums are this one that you posted "Tax Liens, Notes, Paper & Cash Flow Discussion" and also the "HUD, VA, and Tax Sales" forum. However liens are discussed in other forums on occasion so using the Search feature will cover all forums.
Liens are the wild west in terms of how they are handled. Each state can have its own rules and sometimes counties and cities have variations on the state rules. Some liens can be bought online, some you have to be at the auction in person or have a person represent you. Some places only sell liens in bulk to big money buyers.
Get a general overview and then dig in to learn the rules of where you plan to invest.
Huntsville, AL · Member since 2013 · 66 posts · 11 votes
12y
Craig Garrow you also might want to go to an auction or two with no intention of buying. Just meet the players in your area and see if any would be willing to talk to a new guy. Tax liens work differently in different areas, so knowing what it's like where you are might be a good step #1. You don't want to spend a bunch of time learning and getting interested only to find out every lien sells to a huge company bidding way below any rate you'd consider.
Specialist · Phoenix, AZ · Member since 2011 · 698 posts · 629 votes
12y
@Craig Garrow Everyone so far is right on target. Let me simplify - "Education".
Read a book or two on tax lien investing so you understand the basics. Like the difference between a tax lien and a tax deed. Is your state tax lien or tax deed?
Use the handy-dandy "Search" at the top right of this page and read the posts on here about investing in tax liens. The two main forums are this one that you posted "Tax Liens, Notes, Paper & Cash Flow Discussion" and also the "HUD, VA, and Tax Sales" forum. However liens are discussed in other forums on occasion so using the Search feature will cover all forums.
Liens are the wild west in terms of how they are handled. Each state can have its own rules and sometimes counties and cities have variations on the state rules. Some liens can be bought online, some you have to be at the auction in person or have a person represent you. Some places only sell liens in bulk to big money buyers.
Get a general overview and then dig in to learn the rules of where you plan to invest.
Denver, CO · Member since 2013 · 409 posts · 105 votes
12y
Research tax lien laws in the State you want to invest in. Investing outside your State is a bad idea, until you have a lot more experience. Beyond that, it depends on how much "a little capital" is. You have probably read stories of some tax cert buyer that lucked out and got a Deed to a $300,000 for $6,000 in taxes. What you don't read in those stories is how the tax lien buyer made little or nothing on 50 other tax lien certs he/she bought.
Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
12y
As others above have said learn the rules and risks in your area. Once you know that then the best way is to buy "over the counter" or "leftover" liens. These are liens that for one reason or another were not bid on at the auction. You can buy them at face value and collect the full interest.
Keep in mind that some areas do not offer these and the ones that do, most leftover liens will be total crap. Just make sure what you are buying is worth significantly more than the lien amount you are paying. Good luck - Ned
Real Estate Broker · Malone, NY · Member since 2013 · 345 posts · 70 votes
12y
Thanks for all the replies! Last I read, NY is a deed state, so I am looking for Lien states. Is there a place to get free/inexpensive lists?
Also looking for book recommendations. I bought Saen Higgins' book a while back - not sure if it's legit info or not.