Tax Liens

14 Jun

Real Estate investing has many ways to make money but few allow you to make the kind of money that buying tax liens can.

What exactly is a tax lien? When a homeowner does not pay their property taxes on time a lien is placed on their home.

Once the tax lien is placed on their home one of two things can happen:

1. The homeowner pays off the tax lien in full and the lien is taken off the title of the home or

2. The homeowner fails to pay off the tax lien and the lien is sold to an outside investor for whatever is owed.

#2 is where you step in as an investor to buy the tax lien and hopefully profit substantially from your investment.

The homeowner then has a limited period of time to pay off the tax lien to you the investor with interest or face losing their home.

So in a worst case scenario for you the investor you will get back all your investment with significant interest from the homeowner or

Hit a home run by getting the title to the house if the homeowner defaults on their tax lien.

So here are the numbers: Most tax liens can be bought for a few $1,000 or less and have the potential through the homeowner defaulting to get the entire home.

Many times a tax lien that you paid only a $1,000 or so for can get you a home worth many $100,000.

I know of no other type of real estate investment that can net any type of comparable return to tax liens.

This is exactly why you should get to understand the nuts and bolts of tax lien investing which you can get here.

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