Wholesaler · Member since 2016 · 24 posts · 1 vote
Hello All,
Recently I've been in contact with a tax lien investment company based out of Florida (I'm in Colorado) and am looking to purchase a few of their tax lien certificates. I was wondering what the recommended documentation is for this type of purchase?---i.e. would it be a contract or purchase agreement? What all do investors typically use? My funds for the purchase are likely to be sent via certified check or wire transfer. I appreciate any advice.
Erie, CO · Member since 2018 · 44 posts · 14 votes
6y
@Kevin S.
Hey Kevin,
Two strategies for tax liens in real estate are to earn a return on the tax debt or foreclose on properties. Which are you going after?
If the company is selling you the lien cert, then they would not have foreclosed and your are essentially buying a note.
It would probably be good to do some due diligence on the properties which generated the liens to find out:
-Is it likely the lien will get paid off by property owner or first lien holder?
-What return are you expecting on your investment?
-What are the conditions of the properties? (If no one is paying taxes on a property because it burned down, the lack of a structure, or a severely damaged one, would have a big effect on how much one would pay for a note on that property.)
-If you want to foreclose, what is the timeline for when that can happen?
I went to a good meet up in Boulder by Dan Murray a while back. Dan does lots of investing in tax liens in AZ and FL. I'll see if I can dig up his contact info and maybe you could consult with him before making a purchase.
Thanks Ryan. I have already done most of my due diligence. I'm looking to invest for the purpose of foreclosing on the properties. They are vacant parcels. I have done 2 tax lien investments in the past in this way (wholesale from another investor) but need additional guidance or recommendation specific to the contract or purchase agreement side of things. I'm not 100% comfortable sending money to someone I don't even know without having some king of assurance like a signed agreement in place first. Feel free to send me the info on Dan Murray. I'm always trying to learn more! Thanks again.