Looking for some advice on Tax lien auction sale

[Yia Her]

Hi BP community, I know lots of you have various experience when it comes to real estate investing.  I would like to find out more about your experience specifically in the tax lien sale/auctions.  I have done some due diligence on my part but I know there are more to it than meets the eye.  

What I would like to know are: 

1) What are your personal experience with tax lien sales if you have done any before. 

2) Is there any golden rule to buying tax liens

3) What exit strategies can you prepare to help when buying tax liens

4) If you have bought tax liens before and have run into an issue or problem, what was it and how did you problem solve the issue.  

One of the famous four questions from the Podcast - 

5) What tax lien book can you recommend if interested in tax lien.  

Thanks 

Yia 

[Ned Carey]

@Yia Her

1) I have bought well over 1000 liens and it is essentially my full time business. 

2) Yes a) Know the rules in the area you invest. b) Know what you are bidding on and the true value (not just the assessed value)

3) My exit strategy if I am able to foreclose is simply to auction the property off. If you have bought right then you should have a good enough deal that many exit strategies should be viable. My goal is to acquire properties through foreclosure and if I am doing via tax sale then I believe it should be a home run not just some mediocre deal I can get off the MLS any day.

4) I have misjudged the value of properties or the property has deteriorated between the time I inspected it and foreclosed. I have had 1 fire destroy a house. In many of those cases I just walked away from the lien and chalked it up to the cost and risk of doing business. In some cases I sell and recoup as much as I can.

Another issue was a IRS lien that my attorney did not catch. We went to one of the national tax lien title insurers and are waiting for them to clear the title. It has just taken a lot longer and will cost us more. However it will still be a solid winner for us when we are done. 

5) I don't know. I suspect most books are going to be generic and the laws and how they affect your bidding and strategies vary tremendously form state to state. You will find a lot of tax lien experts here on BP. Most of which focus on specific states and can give excellent detailed advice. My expertise is Maryland. Outside of MD my advice tends to be very general.