Are tax lien, deeds, and notes good investments?

Question

Dennis Weber · Answer

I do all three, but if I lived in southern Florida, I would only concentrate on learning about notes. I think If one invests in tax sales it should be locally and I think Florida's days of hitting home runs is over. In liens you tie up your money for a long time just to have the property auctioned off. That seems crazy to me. In the deed sales, properties are bid up so high. If you think the Florida market still has appreciation left then it's speculating and not investing to me.

Performing notes you can get cash flow right away. In non performing notes you can get greater returns but with greater risks. If interested in learning about notes and especially non performing firsts, I highly recommend viewing Scott Carson's videos on Vimeo and his Monday Night Note webinars.

Account Closed · Answer

I go after tax auctions but NOT AT THE AUCTION. I contact the home owner before the auction and negotiate to buy the house. That way I don't have to deal with all the crazy auction madness.

John Underwood · Answer

Tax lions are awesome. I have been buying them for about 10 years have made good money on the interest and have 20 houses that I have got for pennies on the dollar.

There are many articles on Bigger Pockets that you should read on the subject. Spend a week reading these then ask any questions you have.

Dennis Weber · Answer

@John Underwood I think I would have been happy with half of the properties I received. I only seriously started investing in liens in 2015 after I learned as much as I could then developed my own strategy which gets me screamed at on BP when I tell it. For instance, they say never by a street. I bought a street that is the only entrance to an apartment complex and a major bank. They don't have easements so they can buy my street or build their own. Don't buy lot with gas tanks buried. Did it. But this lot is part of a working mini mart. Buy my lot or go out of business. And oh, you owe me for all the gasoline you pumped out of my tank. Okay, to be honest, I only bought those two to have fun. They are both in the middle of negotiations right now and I may get surprises. I tell you about those to say that I don't drive past the properties. We only have tax sales once a year so there are thousands of liens to look thru. If the photos online on Google, Bing, or GIS are not new enough I pass up or bid only land value. I'm buying in volume so one mistake doesn't hurt me. Too early to say my strategy works but it looks like right now it does or I failed forward. In 2015, the Marion County tax sale wasn't too competitive so I got most of my properties for minimum bid. The 2016 sale was a little more competitive.

John Underwood · Answer

Dennis, I have about a 75% to 80% redemption  rate typically. I target a certain FMV house and I drive by every property that I am going to bid on. So if I get a great interest rate and a couple house every year I am on track to not have to keep a day job in a couple of years. I did have a banner year a couple years back where I got 5 properties. I hang onto them fix them up and turn them into passive investment. And I mean passive. I don't personally work on them or chase rent. They deposit rent at my bank or they get evicted. Repairs come in via text. I text my handyman to go take care of any issues and I write him a check.

Anastasia Jordan · Answer

If you have little capital (5k or less) it is the best way to aquire properties.

John Underwood · Answer

You should start off wholesaling to build capital.

You should also join the local real estate club. Upstate CREA. Check out our website.

Michael Lee · Answer

Hello and welcome to BP!  I do think that it is a good way to go to property purchased through the country that has the right to sell it.  At one time I thought it was the way to go and then I heard that those sales sites are now crowded with many competitors I was turned off.  I have seen nice been reminded how good it must be. I was told that every county is different and that research is necessary.  You can also buy them over-the-counter those properties were not sold at auction.  In the beginning of investing as a real choice I really was interested at that but you have a redemption period that giives the original the right to pay it off that could effect your purchase.

Research and having the time to look at those sites can help you by seeing the outside condition and looking through windows to see the inside because you normally cannot schedule a walk through with anybody.  To get a feel of how it goes in your County be going through the research and going wherever you can buy through an auction and just witness the process of the sales.

Most locations on are on the web but you have to ask a Country employee to help you and get all of the basics through them.  I have hunk that the state of Florida is a joint state that sells certificates and deeds.  Like most things it takes a bunch of research to do well it just depends on the County selected.  One of the downsides of this is that any property be bought has to be paid in cash that day.  Most states sell one or the other (certificates or deeds).

It's seems to be a fairly good way to go.  It can be a good place to network with people have money and are cash investors.  There are so many people that are into real estate investing in real estate most actions can be difficult because it can be the number of competitors doing it.  Like just leave like everything it takes a bunch of things to be successful.  A bunch of Counties will give you the information needed, just be nice to them and do what they say.

A bunch of Counties only have one sale per year and some do it monthly.  You can buy certicates without taking possession of the property and doing a bunch of work and have ownership.  One association Inlisted doing that for the last 20 years and make it seem attractive but it takes a bunch of work in it to be successful.

Good luck to you!

Pari Thiagasundaram · Answer

@Oziah Tamam, if you want to learn about investing in Notes (1st position), here are some excellent videos from @Scott Carson

https://vimeo.com/search?q=weclosenotes (Free resource)

If you are looking at investing in seconds, checkout @Dave Van Horn 's  https://www.pprnoteco.com/

Are tax lien, deeds, and notes good investments?

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