Allocation of Funds

[Ben F.]

Hello, Just looking for strategy opinions on how you'd plan the best use of funds involving tax lien investments as described below. I'm looking for opinions from experienced investors in the field of tax liens. *Example* - Say I'm looking to invest $10k. What portion would you invest toward liens, toward deeds, toward title searching (can I do myself??) and lawyer fees for this $10k? - I'm not looking to invest in a state where the redemption period is less than 6 months because I DONT want a higher potential for the owner to NOT redeem causing the need for early lawyer fees. I'm looking for fast profits from the interest rates but I want to be ready if the owner doesn't redeem. *Also, what investment range would you say owners pay off the fastest, $300 to $800 liens? Also, I know I mentioned deed investment in the inquiry although this isn't my initial strategy. I'm using the deed portion of the question to see how much you'd suggest placing toward this strategy if I were to... Thanks!

[Ned Carey]

@Ben F. I don't think you have enough money to invest in tax deeds. You are buying a house, it is hard to by something worthwhile for $10K. Also I believe IL is a tax lien state, so buying deeds meas buying out of state where you would not know the market as well. 

If $10K is all you have I would put perhaps $6K into liens and have the rest as reserve for legal fees.  Doing your own title work is very risky and you would never get title insurance if you did your own work. 

In my area legal fees are about $2500-3000.  Most attorneys want $750~ up front and a payment 1/2 way through and then a final payment when the foreclosoure is done.  Also in  my state legal fees must be paid by the property owner to redeem.  If that is true in IL you will get reimbursed.