There’s been some very bad press lately on tax lien investing – in the form of articles written by journalists who don’t know what they’re talking about! I think that their view of tax lien investing is a little skewed. I’ve read 2 such articles recently in the Huffington Post about how the big banks and hedge funds are taking advantage of Americans by investing in tax liens.

Now, I am a tax lien investor and I teach individual investors how to invest in tax lien certificates because it’s a safe alternative to the stock market. Individuals can invest in tax lien certificates with money from their IRA or 401(k) and it’s a much safer investment than speculative securities. As an individual investor I don’t like the competition from the big banks, but the authors of these articles have got their facts wrong. They make it sound as though the “greedy” banks and hedge funds are in tax lien investing to profit from the poor distressed homeowner who can’t pay their taxes. They make it sound as though the banks add interest and fees to the tax lien and go after the homeowner for the money or foreclose on the property. But that is not the way it works. The banks simply get what the county or municipality would normally charge the tax payer. Continue reading →