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Buying Tax Lien Certificates Without Leaving Your Home

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Perhaps you live in a tax deed state, or, for whatever reason, you just can’t make it to any tax lien sales. No worries, you can still be a tax lien investor from the comfort of your own home. This is made possible through over-the-counter sales or assignment purchases. Most states have a system in place to sell the tax lien certificates that are left over after the annual tax sale.

This is a great opportunity for you to invest your money all over the country without ever having to travel to the actual location in which you are investing. With over-the-counter tax lien certificates, you are getting the best of both worlds: the bidding competition is eliminated so you will get the maximum interest rate, and you are buying these liens at the lowest possible price. In fact, in some cases, you may get a tax lien certificate for less than the minimum bid price that it was offered at the auction.

In order to get started, you will need to know each county’s process for selling properties in their inventory after the tax sale, and how to get a list of these properties. Many counties require that you send an “Assignment Purchase” form letter or another type of application form letting the county know who you are and what information you are looking for. Some county Web sites will list the county’s post tax sales process, and some states even allow you to download current property inventory lists for free. The cost of assignment purchase lists in other counties can vary anywhere from $2 to about $25.

Calling a county directly for information is not always the best strategy. You won’t always be able to reach the person (such as the County Treasurer or Tax Collector) you need to talk to, and the person you do talk to is not guaranteed to provide the answers you are looking for. By sending a formal letter instead, it is more likely than you will get complete, accurate information from the correct person.

Buying tax liens over the counter gives you a tremendous opportunity to reduce, or even eliminate the redemption period. In many situations, the properties have been in county inventory for a lengthy amount of time and are approaching, or even past the redemption period. This means that you will be able to foreclose on the property immediately or much sooner than if you had purchased the lien at an auction.

So, with this investing strategy, the tax lien certificate investor has the following advantages:

  • you buy the tax lien certificate at the lowest possible price, sometimes even lower than the original minimum bid;
  • you get the highest possible interest rate;
  • you don’t have to wait for an auction to start investing your money;
  • you can invest when it is convenient for you, or when you have the capital available;
  • you can spend as much time as you need to research the properties you are interested in, and won’t feel rushed because a sale is coming up.

Finally, something else to keep in mind — just because a property didn’t sell at the tax lien auction, it doesn’t mean that the properties on the assignment purchase lists are not worth looking at. There are almost always a few gems to be found, and it is definitely worth trying to find these gems.

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