Discover a Basic 10-Step Process for Buying Tax Lien Certificates and Tax Deeds

Like anything new, when buying tax lien certificates might seem a little foreign, maybe even frightening at first. In this brief article we will cover a basic ten step process for buying tax lien certificates.

This basic ten-step process is organized into three stages of buying tax lien certificates:

I will begin with a brief overview and introduction of the various steps of buying tax lien certificates.

Stage 1: Preparing

Step 1: Identify investment goals, budget and available resources

Identifying the desired results is the first step to buying tax lien certificates. When setting goals, it is important to take inventory of resources, particularly in relation to the time and money required.

Step 2: Formulate an Investment Strategy

The next step to buying tax lien certificates is to identify an investment strategy. A successful investment strategy will maximize returns while minimizing risks.

Step 3: Select the Right State

Where to begin buying tax lien certificates? With so many states to choose from the task can seem a bit overwhelming. There's a great deal more to selecting the right state than choosing the one that offers the highest rate of return. In this section, we'll cover major but not all points to consider when selecting a state which aligns with investment goals and strategy.

Step 4: Select the Right County or Municipality

After selecting the state, the next step is to identify the right county or municipality to buy tax lien certificates. Initially, it can feel a bit overwhelming, especially a state with a high number of counties. Georgia, for example, has over 159 counties while Texas, has over 254.

Step 5: Obtain A Current Tax Sale List

The next step is to obtain a copy of the tax sale list. The tax sale list identifies those properties or tax liens available for purchase from the county or municipality. There are several ways of obtaining a tax sale list - some even free.

Step 6: Perform Due Diligence

A tax sale list provides the information needed to conduct due-diligence prior to buying tax lien certificates. Thorough due-diligence helps to narrow down the tax sale list to those listings that are in alignment with desired investment goals and strategy.

Step 7: Reduce Risks

Although relatively small, tax liens and tax deeds have some risks which need to be avoided. Successful risk management is essential to maximizing profit while minimizing risk.

Stage 2: Purchasing

Step 8: Make the Purchase

This step includes registration requirements, available methods of purchase, competitive bidding systems and strategies and post sale payment for buying tax lien certificates.

Stage 3: Profiting

Step 9: Manage the Investment

Buying a tax lien certificate doesn't complete the process or guarantee a desirable outcome. Often, there are several tasks and/or deadlines which the purchaser must complete to maintain recourse. Failure to meet these requirements could prove costly.

Step 10: Realize Profits

Every step leading up to this point has been taken with the aim of making a significant profit or return on investment. In this step I will discuss the various ways to profit from buying tax lien certificates.

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