I just love it when I get checks in the mail from my tax lien redemptions. But what do you do when your liens don’t redeem and the redemption period is over? This is somewhat state specific because some states don’t give you much time to foreclose once the redemption period is over. You may only have 6 months after the redemption period before the lien expires, in those states you will have to start the foreclosure or deed application process right away and hope for the best.
But in states where tax liens have longer expiration periods there are things that you can do to maximize your return on your investment and get paid when you want to. Since I invest in a state that has a 2 year redemption period and a 20 year expiration period, I can let my liens go way past the redemption period and not worry about losing my investment as long as I pay the subsequent taxes. In fact the more I let the lien ride and pay my subsequent taxes, the more money I’ll make. But there comes a time when I have more money into the lien than I want to have. I don’t want the redemption amount to approach the value of the property; I don’t want it to come close to half the value of the property. I don’t want it to be more than 25% of what the property is worth. Continue reading
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