Tax Lien Investing Q & A: Types Of Properties To Avoid Bidding On

Question: “Does it really matter what kind of property you purchase a tax lien on if you are only in it for the interest and don’t want to own the property”

Answer: Yes it does matter since regardless of what anyone tells you, you are not guaranteed to get paid on your tax liens. What’s guaranteed by the county is the rate that you will get if the lien is redeemed, but there is no guarantee that the lien will be redeemed. Your guarantee is the property, therefore the property has to be of value. As long as there is value to the property and you would be able to sell it for quite bit more than the taxes and foreclosure costs that you may have to pay if the lien is not redeemed it really doesn’t matter what type of property it is. But you don’t want to buy liens on property that you would have a hard time selling if you did wind up foreclosing on the property.

Bottom line is that yes, most properties will redeem and you will not be able to foreclose on the property. But if you don’t do your homework and you bid on a an un-buildable piece of land or some other worthless property, odds are that it won’t be redeemed and if you do foreclose you may not be able to sell the property and make a profit.

Question: “What about property belonging to non-profit organization and churches? Is there any downfall to bidding on them?

Answer: Yes there is a big downfall to bidding on liens or deeds for properties belonging to churches or non-profit organizations. Churches and non-profits are tax-exempt in most jurisdictions. They could be in the tax sale due to some oversight or the fact that someone did not file the proper paper-work with the county for the tax exemption. This can cause big problems after the tax sale. If the property is found to have been sold in error, you will be refunded your money eventually, but without any interest.

If you have questions that you would like answered,leave a comment below

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.
This entry was posted in Answering Questions, Due Diligence, Tax Lien Investing. Bookmark the permalink.

4 Responses to "Tax Lien Investing Q & A: Types Of Properties To Avoid Bidding On"