Beyond The Basics of Tax Lien Investing: 7 Strategies to Increase Your Profit in 2010

Tax lien investing is a great way to invest for the future. With tax lien investing you can invest small or large amounts of money for big returns with little risk. But it does have its drawbacks; with tax liens you don’t decide when you get paid your interest. You don’t get paid until the property owner decides to redeem the tax lien or until the redemption period is over and you can send a foreclosure notice. In some states that could take 2 or 3 years. In this article I’ll give you some strategies for getting paid when you want to get paid on your tax liens and redeemable tax deeds, and a way to save on your expenses.

I’ll also let you know how you can invest in tax lien certificates and tax deeds without going to the tax sale. And I’ll give you two other ways to profit from tax delinquent properties without going to the tax sale. So what are the 7 strategies for increasing your profit in 2010? Read on to find out, and also find out about an 8th strategy that I believe is the easiest way to profit from tax delinquent property.

    1. One way to get paid when you want to on a tax lien or redeemable tax deed is to send a letter of notification to the mortgage company. This is really good in redeemable deed states that pay a penalty instead of an interest rate because you get the whole penalty, not an annualized interest rate no mater when the deed redeems. By getting your redeemable deeds to redeem faster, you can turn over your investment more quickly and have a much larger annual return on your money. Of course if you know that you’re going to use this strategy, you want to look for properties that have mortgages on them.


    1. Another way to encourage redemption of a tax lien certificate is to send a pre-foreclosure letter to the owner of the property as soon as the redemption period is over. You can also send this letter to all the lien holders of the property and list all of the lien holders at the top of the notice. That way the owner knows that you’ve sent this letter to all of the lien holders on the property and not just to them. It gives them extra incentive to pay right away before they owe more money and interest payments to one of their mortgages.


    1. A third way to get paid when you want to on a tax lien certificate is to “assign” or sell your lien to another investor. Many states allow for the assignment of tax lien certificates. You can list your tax lien certificates for sale on websites like They do not charge you any money to list your lien for sale, but they do have a small membership fee.


    1. You can save on your expenses by using for all your tax sale lists. Most tax sale list providers charge $10.00 or more for each list that you order, but with, you pay less than $10 per month for an unlimited amount of tax sale lists. Plus you have access to county information about tax sales.


    1. Another way that you can save on expenses is to purchase tax lien certificates by mail, and do all of the due diligence for these properties online.? I know there have been a lot of “gurus” touting the benefits of buying left-over liens directly from the county. But what they neglect to tell you is that most of the popular tax lien counties (especially the counties that have online tax sales) do not have any good properties left over. The counties in the state of Montana, however only take sealed bids, they don’t have actual tax sale auctions. And some of these counties make it easy for you to do all of your due diligence online.


    1. You can also buy left-over tax deeds through the mail. Most of the counties in Pennsylvania have what they call a “repository” list. It’s the list of properties that did not sell in either the upset tax sale or the judicial tax sale. You can mail in a sealed bid to purchase these properties and in many counties the minimum bid is a set amount, usually much lower than the taxes and penalties owed. The only problem with investing in left-over liens in Pennsylvania is that you have to go to the county assessor’s office in order to do your due diligence. Most PA counties do not provide this information online. Many counties in Florida have frequent online tax deed sales; some as often as once a week and they make it easy for investors to do all of their due diligence on line.


    1. You can avoid competition at the tax sale entirely by purchasing tax delinquent property from the owner before the tax sale. To do this you need to get the tax delinquent property list, not just a list of properties that are in the tax sale. The idea is to find property owners who no longer want their property and to contact them before their property is scheduled for the tax sale. If they have already decided that they don’t want the property and they are going to let it go to tax sale, then they should be open to a very low offer for their property. Then you can either pay the taxes before the tax sale or sell the property before the tax sale and pay the taxes at closing.


  1. There is an even easier and faster way to make money from tax delinquent properties without going to the tax sale, or doing any research on properties, or owning the property. It has to do with the excess proceeds from the tax sale. Some deed states will give back any money in excess of what is due the county to the owner of record. Frequently property owners that stop paying their taxes and give up their property do not know this, and the excess proceeds from the property goes unclaimed. By finding these people and helping them claim this money you can collect large commissions.
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