By investing in a fund, you get an expert to do all the work for you. They do the due diligence and choose the right properties to invest in. They have a lot more experience than you do and they know successful bidding strategies for getting liens or redeemable deeds at the tax sale. Investing in redeemable deeds usually requires more money than you need for investing in tax liens because you are actually bidding on the property and the price of the property is bid up at the tax sale. But did you know that you can get “in” on a fund that invests in Texas tax deed properties for as little as $5,000?
But what if you have a lot of money to invest; it’s not easy to get large sums of money investing in tax liens, especially if you only want double digit returns. You might have to go to a lot of tax sales and take a lot of your time to do the research necessary to bid on properties at the sales. Plus the tax lien sales with the best rates are not online. You would have to spend money and time traveling to attend the tax sales live. Tax lien investing funds have teams on the ground that do all the work for you, including doing the due diligence on tax sale properties and bidding at the live and online tax sales. They are even better able to get double digit returns at the online tax sales then you are because they can do the extra due diligence on commercial properties and land that you might not be able to do very well. They know how to get the good deals better than most individual investor!
Because they purchase thousands of tax liens each year, they do get a few foreclosures. And because they do a few of these of these foreclosures, not just one or two each year, they can get better deals from legal professionals for foreclosures, title searches, and title clearing procedures. So their costs for foreclosing on properties are lower than yours or mine would be. Another nice thing about investing in a tax lien or redeemable deed fund is that it makes it easy to invest with your self-directed IRA. Since you are buying shares in a fund and not individual liens, you just request one check from your IRA custodian. You don’t have to worry about getting the funds out of your IRA custodial account to pay for liens each time you go to a tax sale.
By yolanda September 6, 2013 - 3:06 pm
Hi Joanne the biggest is I’m having is I live in ny and found out tax liens aren’t for sale to the public in there. Now I don’t know where or who those large companies are to buy liens from if they are selling. I also need help with due dilligence..thank you it is so hard finding the right resources in this area.
By Joanne September 9, 2013 - 1:57 pm
Hi Yolanda, Tax liens in the 5 Boroughs of New York City are only sold to big fund companies. Although they do resell them later, I am really not familiar with that process. I think you’re best bet would be to go to Nassau County and purchase tax liens there. They have a big tax sale every February – usually lasting 3 or 4 days. I have a course that teaches how to do your due diligence, as well as other things that you need to know to be a successful investor. It’s called the Build Your Profitalbe Tax Lien Portfolio home study course. I am in the process of doing a live training to update this course, which I only do every 2 or 3 years. The Live training starts on Wednesday and it’s not too late to register. You can find out more at http://taxlienlady.com/ProfitablePortfolio.html