FL tax liens, Solo 401(k)

[David Morgan]

Florida tax liens look interesting.

1.) Does anyone have a recommendation for a place to set up a self-directed 401(k) with Roth? Or is this a bad strategy for buying liens?

2.) What happens to the liens that aren't bought in an auction? I see tons of them listed online in some counties, and it's well past the auction date. Why didn't someone snatch them up?

Thanks!

[Brian Eastman]

@David Morgan

At $10K per year, you would probably put all of that in as employee contributions, and could go Roth if you like with the whole amount.

Whether it is worth it to establish a self-directed Solo 401k is a decision you would need to make based on how old you are, how long you will contribute, the expected rate of return, etc.  Self Directed Solo 401k plans do not cost that much, so administrative overhead is pretty minimal when you spread the cost over several years of investing.

With tax liens, the asset cost is pretty low, so you can actually put the money to work even with a smaller initial balance.

Alternately, you could just setup a Solo 401k with a mainstream brokerage for almost nothing, and focus on contributions for a few years.  You'd be limited to stock market investing, but could build up some capital before transitioning to a fully self-directed Solo 401k.