Two Main Strategies for Investing in Tax Liens

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1) The Two Main Exit Strategies for Investing in Tax Liens: Introduction

Hey, there. Welcome to the next course in the mega series about tax lien certificate investing. This is of course, produced by The subject of this next mini course is the two main exit strategies when investing in tax liens. We’re getting really into the nitty-gritty of this stuff now, right? We’re getting into the practical, the actionable steps, and the stuff that should be getting you pretty excited about these methods.

Now as is always the case, I’m going to try to strike a balance. There’s definitely a lot of information, and we want to go over as much as possible. You know, each state has a few peculiarities. Some states are simply better than others, the advantages of going in your backyard versus somewhere else. We’re touching on all of these subjects, but we don’t want to get so bogged down in the minutia, in the detail that we forget the big picture, right? Which is just simply to get out there and to do it.

We’re going to be talking about the two main exit strategies, and actually two little alternative strategies you can use. And as we’ go into this information, try to look at it kind of like a tool belt. We’re trying to put in as many tools into there and teach you how to use them, so that no matter what situation you come across, you can handle it. No matter what type of deal you purchase, you know that whether A, B, C or D, you can make money with it. And at the end of the day, that’s why we’re doing this.

Most of us aren’t particularly passionate about tax lien certificates or tax delinquent property. We certainly recognize the benefits of helping the county get its money, but at the end of the day, this is about our lives. This is about how the income we generate from these investments is going to change our lives, whether that’s getting out of debt, whether it’s preparing for retirement, whether it is leaving a legacy, being able to be more generous. At the end of the day, that’s what it’s about. So even as we go into these different concepts, remember why you’re doing this.

As always, I’m Michael Decker. I’m a contributor to Remember that these courses that I’ve been invited to put together are a mix of other people’s experience and my experience. It’s kind of like you’re getting to sit down with a group of experienced investors, and just listen to them talk about deals that they have done and lessons that they have learned, which is what makes all of this so valuable.

What are we going to be going over in this mini course about exit strategies? We’re going to go over the first, the most common exit strategy, which is simply collecting the interest. This is the way that ideally, it should work. And each state has authorized the treasures to collect a different amount of interest, right? Penalties. It can range anywhere from 10 to 36% per year. Some states have, that’s just a flat rate, no matter when the person redeems. It’s 10%, even if it’s the day after the sale. Others kind of prorate it out, like a percent and a half per month, however many months pass. So that’s the main way to make money. To be honest, probably why most of us are in this, we like the idea of being able to park our money and get it back a year or two later with a significant amount of growth, and we like being able to help the community and help the property owner in the meantime.

But another exit strategy is getting actually, ownership of the property. Remember, this is where the person never pays their taxes, and so we end up following through on foreclosing on that lien, and you are able to take property ownership. And then from there, there’s a million ways to make money, once you’re the actual property owner.

But there are two other kind of secret, we could say, alternatives that you can make money. This has to do directly dealing with people. This is probably one of the better, one of the bigger gems of this entire course, is using the method that other investors are not using. So it has to do with the resale and contacting the owner, selling your tax lien certificate to a third party or contacting the property owner directly and making them an offer to purchase their property.

So these are the four ways that you can make money with tax lien certificates. Obviously we’re going to be focusing a little bit more heavily on the first two, collecting the interest and property ownership as those are the most common, and that’s really what the county has the most experienced with, and that’s what they kind of expect investors to do.

This is going to be an awesome course. We’re going to go through these four modules. We’re going to have a little bit of a review at the end. So by all means, please stay with us.

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