Zero Risk Real Estate: Creating Wealth Through Tax Liens and Tax Deeds

Chapter 2

Getting Started

The best time to plant a tree was 20 years ago. The next best time is now.

—Chinese proverb

Since you now understand the incredible value and financial potential of tax liens and tax deeds, it’s time to put that knowledge into play. But sometimes, the hardest part of any new adventure is just getting started. In this chapter, I’m going to walk you through step-by-step on how to find tax sale listings, how to research the properties, how to get some local help if and when it’s necessary, and how to figure out how much to actually bid on the tax sale properties and certificates. First, though, we need to determine your investment objectives.

There is only one of two possible goals you want to achieve when investing in tax sales—rate of return or ownership.

Each of these goals brings with it specific considerations that you must take into account when evaluating properties subject to a tax sale. If you are seeking a profit, then you’ll want to focus on tax liens and the locations and bidding methods that might generate the greatest rate of return. If the interest rate is already relatively low, and the bidding method is a bid-down interest method, then you run the risk of ending up with an interest rate that could be as low as 1 percent or even zero. On the other hand, if the interest rate is high, you will want to balance that with the increase you’ll ...