First, research the list of states that auction tax lien certificates. Make a short
list of those states you wish to invest in.
Second, for each of the states on your short list, read through the state’s tax lien
laws/statutes to understand the auction process, the interest/penalties that may
be earned, the auction schedule, and the redemption timeline. This will help you
choose which state to invest in.
Third, the United States has over 3,000 counties. You can find a list at naco.org.
Find the county you wish to invest in, find the name of the tax collector and/or
treasurer, and call/email them to inquire about their next tax lien auction.
Fourth, as the auction date approaches, you will likely need to pre-register, submit
a financial deposit, get a bidder number, and make travel arrangements. The list
of tax liens for sale is usually published in a local newspaper. Some auctions will
take several hours and others run for several days. Payment for tax lien certificates
won at auction is due same day or next day in cash.
Fifth, when the property owner redeems their tax lien, the county will send you the
proceeds. This money then sits idle until the next auction.
Finally, if the redemption period ends, you will need to contact a lawyer in that
property’s state to work through the foreclosure process with you.
Investing in tax lien certificates is a lucrative albeit time-consuming and expensive
strategy. If you do not have the time to learn and do it yourself, an experienced
investment advisor like Treeview Capital Management LLC can manage your tax lien
certificate investments for you.
Yes, individual investors can purchase tax lien certificates on their own. What
follows is a description of how to invest.