New Jersey Tax Sales

I went to 2 tax sales this morning and got no liens. At the first sale I went to I only opened my mouth to bid once. Everything except for one small $72.00 lien got bid down to 0% and premium was paid even for small sewer liens. This was at the same sale that I had gotten a couple of liens the year before, so what happened?

It just so happens that you really can’t tell how a tax sale is going to be from how it was last year. One year a tax sale will be good for investors and there will be a lot of good liens available and few investors at the sale. And then the next year at that very same tax sale, there will less available and more buyers, thus more competition. Tax sales where there are large liens really bring out the big players and the big investment companies that didn’t get the big lien will bid on everything else. It makes it difficult for the individual investor to get tax lien certificates at decent rates.

So what is an investor to do? A couple of weeks ago I went to another tax sale where I was able to pick up three small sewer liens, 2 at 18%, and one at 17%. This sale was in a very little municipality, kind of off the beaten track and a little rural. The 2 sales that I went to today were in the same county as that sale, but they were bigger townships and each of them had one fairly large lien which attracted 4 of the big companies. Two of these companies bid on the small sewer liens as well as the larger liens. At the second sale that I went to one large lien with a certificate amount of $65,000+ went at 0% with a premium of $100,000!

The secret is that if you go to enough tax sales, eventually you will be able to get a decent lien at a good interest rate. I would rather wait until I can a tax lien for 10% or more (I prefer to get 18% on my liens) than bid something down, or bid premium just to get a lien. Do not fall into the trap of bidding something down (or up as in the case of premium) just to get a lien – it’s not profitable! Instead, go to a few sales in various places to find one that for one reason or another is poorly attended and has just enough available that you can get some liens.

If you have an experience going to tax sales – good or bad, or if you have questions about what went on at a tax sale that you attended, post your questions or comments here, and I’ll answer them to the best of my ability.

Happy and Prosperous Investing,

Joanne

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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