Investing Tax Liens

AlfredSokol said: "Sometimes investing in tax liens on property is even more profitable than investing in the underlying property."

chahinemm said: "how is that? what benefits are involved? chahine"

AlfredSokol said: "Usually it depends on the state you live in, but here's the basic info. Many times people will forget to pay their property taxes. This used to happen so often that the states came up with a plan to make money. Once or twice a year, the states will take all the people who owe tax on their properties, and they'll place liens on them. Then they'll have a public auction where you can buy the liens up. In Ohio, for example, the liens have a guaranteed 18% return! However, if the people pay earlier, you get a higher annualized return. And let's face it, people will always pay! They won't lose their $300,000 house for a an $1800 lien. So its just a matter of patience until you get paid."

thebeave said: "Tax Liens are mentioned numerous times in the Rich Dad Poor Dad books. From what I gathered this is a pretty good way to get good houses for small amounts of money. Correct me if I'm wrong though."