Will Tax Lien Investing Help Me?

I get a lot of questions? from people who are in financial difficulty and they want to know if tax lien or tax deed investing is the answer to their problems. Some of these people are young, in their 40’s with a mortgage, young children, and they have a failing business or they have lost their job, and they want to know how soon they can replace their income with tax lien investing, and can they really get houses for “pennies on the dollar.” Others are retired or closer to retirement (in their 50’s or 60’s) and they’ve lost most of the money in their 401(k) and want to know how long it will take to make up for lost time with tax lien investing if they move all of the money in their 401(k) into a self-directed IRA and start investing in tax liens. Most of these people have already purchased someone else’s course on tax lien or tax deed investing but still haven’t made any money yet, and don’t know if it’s really possible. It’s amazing how many people find me after they spend a lot of money with someone else, and then expect me to answer their questions. So if this describes you, let me save you some time and answer your questions before you ask them. Even better yet, let me answer your questions before you spend any money learning about tax lien or tax deed investing.

First of all, can you still buy houses for “pennies on the dollar?” The answer is, yes you can in some tax deed states. But think about it: Pennies on the dollar means that you can buy a $300,000 property for around $30,000. Do you have that much money that you don’t need to live on or to keep in an emergency fund? People forget that this is an investment, not a get rich quick scheme especially today when real estate is not selling quickly.

If I were in one of the situations that I previously described, I would not depend on tax deed investing or tax lien investing to bail me out. The truth is that you are not likely to get a house from a tax lien, you will make a nice profit on your money, but to live on 18% interest on your investment you’d have to have at least $250,000 invested. You can get a house for pennies on the dollar by buying a tax deed, but I’ve already discussed the reality of that.Don’t get me wrong, now is a great time to get involved in tax liens and tax deeds. Now is actually a great time to buy real estate any way you can – if you have the cash, but not if what you need right now is steady income.

I’ve been in a similar situation. My husband was self-employed when our three children were young and at times we had no money coming in. This is way before I got involved with tax lien investing, or any investing for that matter. We were not even saving any money, we were barely surviving. What turned it around for us? My husband finally got a job and did his business on the side. We were finally able to pay our bills and start to get out of debt once we had a steady income and benefits.

I don’t have the time to go into too much detail here, and I know this is probably not what you want to hear, but I have an obligation to tell the truth and help people, not just sell my courses. Back then, I blamed my husband for our money problems, but the truth was it was my fault as much as it was his. I blamed him for not realizing that his business was not making enough money to pay the bills and we were getting behind,and were in danger of loosing our home, and that he needed to go to work for someone else. But I was also self-employed as a personal trainer and I could have just as easily gotten a full time job at a gym or corporation, but I wanted to stay home with our young children. I also just had my third c-section. I did go to work part time as soon as I could.

What I later came to realize is that my financial condition was a result of my actions and thoughts for the years prior to this. When we had money coming in we didn’t save it. We spent all that we had saved on our first home (a condo). We closed on our condo and had a our first child just 2 years after we got married, and 2 weeks later, my husband lost his job. The bottom fell out of the housing market (back in 1990) – pretty similar to conditions today. My husband had difficulty finding another job in a business that was connected to the housing market (He was a salesman for a construction equipment dealer), so he went into business for himself as a used construction equipment broker. Our finances were up and down – mostly down, throughout the next few years.

So how did I get from there to where I am today? Remember this is before I even knew about tax lien investing. I changed. I was determined to get my finances under control, and get out of debt. I studied everything I could about personal finance, debt reduction, and wealth building. But nothing really changed until I changed myself, my attitude, especially my attitude about money. The more I worked on myself the better things got. And one thing that helped me feel good about myself through this time (besides my faith) was that I had a hobby that I was good at, something that I could do that made me feel good about myself even when things were going bad. (I also had a supportive family).

So just a word of advise if you are going through some financial difficulties right now – strengthen your relationships, friendships and family ties. Pay attention to hobbies that you enjoy and that don’t cost a lot of money, and spend some time on your spiritual development. It all might seem like it has nothing to do with your financial well being but I can tell you that it does, at least it did for me.

One more thing, regardless of what financial experts say, you have to save money even while you’re paying down debt. Otherwise you can get all of your debts paid off and still have nothing to show for it except maybe some available credit. And that will get you right back to where you started if you have one little set back, like an unforeseen trip to the hospital or your car breaks down and needs to be fixed.

Can you identify with my experience? If you can, leave a comment at the end of this article.

By the way, I am not a financial advisor, real estate professional, or an attorney. I’m just an average investor, just like you, so my advice is no substitute for the advice of a professional. If you need financial or legal advice seek out a legal or financial professional in your state.

About Joanne

Joanne Musa is known online as the Tax Lien Lady. She helps people who want to invest their money profitably in tax liens and tax deeds and get high returns on their money without the typical risks of real estate investing or the uncertainty of the stock market. Get your free special report on "7 Steps to Building Your Profitable Tax Lien Portfolio" by Clicking Here.
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