All Forum Posts by: Frank Schlesinger

NJ tax liens pay 18% on liens over $1500. Auction starts at 18% and interest rate can be bid down to zero then premium bidding begins. Bidding down interest rate plus a premium is paid for control of the lien. If the rate is bid down to zero, lien holder receives 0% the first year, town holds the premium, and the next year investor receives the full 18%. In addition depending upon municipality investor may receive up to an additional 6% depending upon lien amount.

After two years the investor has the option to foreclosure on the property and up to five years to foreclose.

What happens to the premium? If the lien is redeemed, the investor receives their premium back plus any interest and penalty earned on the lien. Premiums do not earn interest. If the investor forecloses, they lose their premium but get ownership of the property free and clear.