Saturday, April 4, 2009

Tax sale...lets have a conversation

So you’ve heard you can make truck loads of cash by investing in Tax Lien Certificates. Like most people, you have probably seen a late night infomercial, pitching programs that will show you how to buy a 200k house for 350 bucks. My God, the world must be full of fools paying thousands of dollars a month on a mortgage when you can buy the same house for 350.


Well I hate to be the guy that tells you. But you can. Hell, $350.00 would even be considered expensive at some Tax Sales.  Does it happen all the time?  You bet, millions of times a year.

It’s just not quite the way they want you to believe.


Flash back…..


Like most people that are young and ambitious I dreamed of working for myself and real estate seemed a mighty fine way to make a living. It was the early 80’s when Real Estate was crashing. The Resolution Trust Corp. (RTC) was taking over failed banks and there I was with a little bit of cash and a whole lot of desire. I started to make some decent money flipping houses and was investing profits in strip (zero coupons) bonds that were paying about 20% interest yearly. Just when I thought I had everything figured out, interest rates got sane. The 20 % strip bond return was gone and I needed another secure place to put money and a 3% CD wasn’t going to do it.


When one door closes another one opens.  


For some reason, ever since I was a little kid I’ve heard the term Tax Sale. Maybe because I grew up in a home with a mom and dad that were lawyers or maybe I was just a strange little kid. But the terms Tax sales and Tax liens were familiar. Since I have the capacity to add 2 plus 2 I figured this might be a good place to get a decent return on my money when the strip bonds dried up. So what did I do next?  Why of course, I ordered some bull shit course on Tax sale, Tax Lien and Tax Lien Certificate that I heard pitched god knows where.  When it came, I quickly realized it consisted of a couple of pages of  phone numbers and some bush league ideas and facts that weren’t worth the cost of a single call to  directory assistance much less the 75 bucks or so that I just pissed away.


It wasn’t long after, I attended my first tax sale. I had a basic understanding of how the system worked by simply asking the Sheriff that conducted the sale what was what.  I bought about 10 Tax Lien Certificates that day. Spent about $1,500 and waited about 30 days for the sheriff to process and record my purchases. When they came in the mail I pretty much put them in a file and forgot about them.   The way I figured it. (Remember my figuring was based on my conversation with the sheriff that conducted the Tax sale) I was entitled to a 17 % annual interest rate and the tax debtor (the owner that didn’t pay) had three years to redeem (pay me what I paid + interest).


If you have figured out, that my first tax sale was in Louisiana… congrats.


I will never claim to be the sharpest pencil in the box. Looking back on that day when I purchased my first tax lien certificates I realize just how uninformed I was. But I made a decision to act. I knew a Tax lien had some value. I was just totally clueless about just how powerful those pieces of paper really were.


A short Sidebar……………(dramatic background music begins to play)


This is where I sell you on what this site is REALLY about. If you’ve surfed the web for 5 minutes you’ve seen the pitch.  It’s where I tell you I’ve reviewed all the Investing in Tax sale /Tax Lien programs. I know which ones really work and those that are trash. Out of the goodness of my heart I am going to steer you in the right direction. I am going to lead you to the great programs that will show you how to make a ton of money with little or no work. All you have to do is buy this magical program. I just happen to have a link that will take you to this very special secret place (Investing in Tax Sales Heaven) where you’ll never have to work another day in your life. A place where everyday people just like you move into their 200 thousand dollar home that they just purchase for 350 dollars. Pay no attention to that affiliate code attached to that magical link that just happens to be mine.  You certainly wouldn’t begrudge me a couple of dollars to show you all the answers.  Remember I protected you from all those rip off guys. Yep that’s the plan. It’s just too bad I haven’t found that magical program and I never had the dream growing up to be a piece of crap ripe off artist.


What I am looking to do is have an honest discussion about investing in Tax Lien Certificates. I’ve got nothing to sell, pitch, cajole or ridicule you into buying.  Things that may have value I’ll be upfront about and I will never have a financial stake in what I may recommend.  With the exception of buying property at the Tax sale you don’t have to buy anything. All the information can be gotten from public documents, newspapers, courthouses, the internet and libraries.

So what will I get?  Well believe it or not I probably get the better end of the deal. Some 25 odd years ago at that first tax sale I didn’t have a clue of just how much money could be made. But in my dealings over the years I learned a great deal. I’ve met some generous people who’ve shared their ideas with me.  Realizing that and knowing how thinking aloud about something can enable you to see things in a different light and spark a truly creative idea inspired me to create space.   Just consider this me thinking aloud with you in the room.

Perhaps this post got into a ramble and off topic and if that’s true, I promise to get into some of the real substance of what’s involved in Tax Lien Investing in my next post.


  1. Great post, I've been investing in FL liens for a little over a year and I was sure there wasn't a single person on the internet who knew anything about the subject.

    Thanks for the read.

  2. I agree, there is a lot of miscommunication out there. I am just starting my tax lien investing endeavor. I'm thinking stocks are just too risky at the moment, and it seems that Tax Liens are a better alternative (possibly with a lot more due diligence attached to it though).

    I'm also thinking of putting together a web site that displays "more information" that what you get at the tax sale site (which is usually just a name/tax-id/legal description).

    I've already written the software, I just need to figure out how to make it available.

    You guys have any suggestions?

    Basically it helps you narrow your list quickly. For example, in Charleston next Monday there are over 4000 properties. My angle is that I only want to bid on Single Family/Homesteads (where the owner lives there). My software finds those and displays them in a report along with appraise value, bdrms/baths, sqft, lot size, acreage, etc.

    It can then take you to zillow or google maps so you can get a street view of the property (if available on Google). Etc.

    Does anyone here think that would be of use? I have seen another site that provides and "Enhanced List", but it's just an excel file - which is nice, but you can't exactly click a link and direct to google, zillow, etc. And they charge $175 for the list. Was thinking of a lower monthly fee, or just a smaller fee per auction.