So, you want to start investing in Tax Liens, but have no idea where to start?
If you’re like most investors, you’ve seen the late-night infomercials and read gobs and gobs of information online about what an incredible opportunity tax lien investments are. Unfortunately, most of the things you’ve read provided you with just enough information to spark your interest but not quite enough to feel comfortable taking action. The devil is in the details, and the details are going to cost you.
Tax lien investments are a great way to get your foot onto the ground level of your career investing in real estate. You can start with as little as $500, or spend millions. The barrier of entry is truly up to you, how much you want to work for it, learn about it and what to start with.
The Truths
Here are 6 simple but tough truths to use when you navigate the minefield of information you are sure to find in a quest to start investing in tax liens:
1 | Remember, everything you need is in your state’s library and at your local courthouse.
It is going to take some time, but read through the legislation regarding property tax laws. You may find tax liens aren’t even sold in the state you want to invest. After you have the “101” on how the process works, go to an auction and observe. It is all public information! You don’t need to buy a coach, or any books, although many investors do find that some level of guidance helps.
2 | Expect to lose some money and understand becoming a successful tax buyer is something that is learned through experience, not taught.
Investing in tax liens is great and I love it, but, as I tell folks every time I present at a seminar or other real estate event, “Investing in tax liens is something you learn, not something you teach.” It takes practice to learn other bidder strategies and how to bid around those. You need to be prepared to take it slow and not empty your bank account into the first tax sale. Tax liens are a moving target that is constantly exposed to variables such as changes in law, changes in administration, economic changes, changes in condition and even changes due to natural disaster. It is impossible to teach what the right move is when these variables occur, but it is something you can learn through experience.
3 | If it sounds too good to be true, it is
Good tax lien investors post some pretty crazy, over-the-top returns, but we can also document each one of them. If you plan to use a coach, a resource provider, or even a service provider like us, challenge them. Remember, tax liens are all public record! There is literally no possible way to “cook the books,” so challenge what you are told, or what is advertised. Be pleasant, but firm. A good service provider will never have an issue with providing recent documentation of investing success as long as you are professional about asking for it.
READ MORE: https://thinkrealty.com/6-truths-know-buying-tax-liens/
