Return in Tax Lien Certificates

[Luc M.]

So, let's say you have an amount of money sufficient that you can buy a nice diversified portfolio of tax liens in a handful of states (live and online bidding Counties). What do you think the return potential would be over a 5 to 10 year horizon?

I would think the majority of the certificates get redeemed but you would have 2-4% that you would need to foreclose on. Several of those that you foreclose on turn out to be a PITA due to someone filing bankruptcy, a mortgage holder challenging you and forcing you to spend money in court to protect your claim, etc. I would think that you would be able to get a gross return of 10-12% but then your net reurn could be 7-8% due to the costs associated with the problem childs.

Does anyone have any real world experience in what is possible with a large portfolio of tax liens over a longer time horizon?

Thanks,
Luc