All Forum Posts by: Joshua Pfeffer

After doing several searches on the BP Forums, as well as on Google, I came up with more questions than answers when it comes to investing in tax lien sales. I’m hoping that a few investors with experience in this arena can maybe chime in and help answer some of those questions for me, and for others who may read this post.

My county is having their annual tax lien sale in about a month. They’ve just released their list of first, second, and third offerings, and after scouring nearly 600 pages of offerings, I’ve found a handful of properties that seem interesting enough to invest in: ie, not along a river that is known to flood, not some weird 20 square foot triangle of land between neighborhoods, and not a $20k property with $100k in taxes owed on it.

I have this idea about tax sales that if there is a $100k property, and they owe $10k, that going in to the auction with a bid number of $20k is probably a fair bet, assuming I’ve confirmed the value of the property. My questions are:

1) My county states that the surplus funds are the property of the owner of the property, which makes no sense to me. If I bid $20k on $10k worth of taxes, could the property owner theoretically go and collect that $10k in surplus and pay off their tax lien? Do they not owe me the surplus if the county just assigns it to the homeowner? I feel like I must be missing something here.

2) What am I looking for in a title search? Tax liens are superior to all other liens (besides federal, right?). So if I find a mortgage, and some HOA fees, and I buy the state tax lien, what happens to the other inferior liens, and what is then my relationship with those inferior lien holders? How do I interact with them, what power do I hold, etc?

3) How frequently do these properties ACTUALLY go to foreclosure? Should I bid as if it will go to foreclosure and I’ll own the property, or should I bid as if I’ll only get redeemed on the tax value and stay conservative?

4) What other issues come up commonly? Where can I get burned? Do the demographics of the county play a role in the bidders, or will these sales draw high dollar bidders from the surrounding areas? I only ask because it’s a very low income county in the countryside, so I’m wondering what to expect the other bidders to be like.

It seems like all of the articles online say “this isn’t for beginners!”, then people like Kiyosaki suggest it as an investment strategy.

Basically, I guess I’m saying “HELP!” And hoping for some experienced voices to chime in on these specifics.

Thank you in advance!

@Marcus Long I certainly intend to! Following several of the local REI Facebook pages, I found that they are either ghost towns, or bulletin boards for sales, neither of which seemed to help at all. Then I heard her BP episode recently and realized that I've just been looking in the wrong places. I've been reading the BP blogs, reading BP books, and listening to BP podcasts, but never searched for meetups on BP!

Hey everyone. I do a lot of “lurking” and thought I’d make the jump in to officially introducing myself and starting to comment more here. 

My name is Josh, and I’m a 31 year old newbie from the St. Louis area: I work in the Soulard neighborhood of downtown St. Louis and live in Imperial, in Jefferson County, Missouri. I’m married with three boys, 4, 2, and 10 months, and I’m truly in the beginning stages of investing, just trying to educate myself as much as possible. 

I tend to "jump ship" a lot, not because things get difficult, but because I tend to get bored, which I think REI may be immune to. I went to school to be a youth pastor, then immediately re-enrolled in a nursing program. Worked as an emergency room RN for a few years, then went to work as a fleet diesel mechanic, and now run operations for buried telephone repair across the St. Louis area, which might be the most random set of career paths possible.

I have a few friends who are full time agents, and I’m a big fan (although not dedicated follower) of Dave Ramsey, so rental property investing has been tossed out in conversation within my circles for several years. I decided to search YouTube for how a person would even get started in the investing world, continued to find BP videos (and Brandon’s face) all over in nearly all of my searches, and the “hook was set” so-to-speak. 

For the past three months or so, I’ve made it a point to read at least two BP blogs every day, I finished reading The Ultimate Beginner’s Guide, and just started reading The Book on Rental Property Investing, with several other BP produced books waiting on my bookshelf. I pour over MLS listings in my spare time, running back-of-a-napkin analyses as I go in order to develop more comfort with the numbers, and I've started scouring tax lien auction listings in my county. My job has me in countless neighborhoods within an hour radius of downtown, so I pass the time by doing mock "driving for dollars" since I drive through neighborhoods checking for jobs anyways.

Besides trying to educate myself as much as possible on all things investing and real estate, I’m finding myself trying to prepare my personal life and debt for investing, including getting my spouse to a point of comfort with the idea, while trying to make sure I don’t get stuck in an analysis paralysis either. 

I have a phenomenal job, with a six figure salary that gives me huge flexibility with my scheduling, but I’m also tied down to always being on call, and always being in a company vehicle and on a company phone. So while I have more freedom than a lot of people in my position, I also have a few things that hinder that freedom as well. 

My wife isn't completely against the idea of REI, but she wants to maintain a level of security as we start to invest, so I won't be putting my house up as equity on a four plex anytime soon, nor will I be House hacking a duplex with three little ones. So for now, as I get more educated and more certain about what REI actually looks like and could look like for me, I’m also focusing on eliminating all of our personal debt to prepare for future investments.

I think this should give a pretty basic overview of where I’m at in life and in my investing journey, and I look forward to being more active in discussions here as I move closer to pulling the trigger on my first investment!