What Is a Tax Lien Property?
When a property owner fails to pay their property taxes, the local government places a lien on the property. That lien (debt) is sometimes sold at a tax lien auction to investors like you.
Two Main Options:
1. Buy the Tax Lien (Investment Strategy)
You're not buying the house, you're re buying the right to collect the tax debt, with interest.
The owner can redeem the property by paying you back with interest.
If they don't you may have the right to foreclose and take ownership (depends on your state).
2. Buy the House Through Tax Deed Sale
In some states (called tax deed states), the property itself is auctioned off.
If you win, you get the house, sometimes at a big discount but it's as-is, with risks.
It Depends on Your State
Some states sell Tax Liens (e.g., Florida, Illinois, Arizona)
Tax Deeds (e.g., Texas, California, Georgia)
Both (e.g., Colorado)
Be Careful
Properties are sold as-is, sometimes with occupants, liens, or major repairs needed.
Do due diligence: check property value, condition, legal status, and redemption laws.
Example
You attend a tax lien sale in Florida and buy a $2,000 lien on a property.
The homeowner pays you back in a year with 10% interest.
You made $200 profit.
If they don't pay, you may start foreclosure and possibly get the house.
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