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Tax Liens

Tax Liens

Fundamentally, any real estate investment pursuit is built upon a foundation of knowledge. This means knowing techniques for different exit strategies, knowing where to find deals, and how to procedurally acquire them. Tax lien investing is a way to obtain an almost limitless pool of quality real estate deals, provided you have a solid business plan behind you.

What is so special about Tax Liens?

  • One of the most lucrative areas in real estate
  • Also, one of the most hidden areas in real estate
  • Historical returns of 15 - 25 percent per year or more
  • You can own real estate for below market value

Annually in the U.S., there are many sales which cover millions of properties. There are over 5,000 counties and cities that need property taxes to run their governments and to pay for (US census bureau):

  • Schools and teachers
  • Fire departments
  • Police departments
  • Sanitation departments
  • Local government offices
  • Water and sewer facilities
  • All the other services local governments provide

When taxes are not paid, counties & cities need a way to encourage people to pay on time and penalize them when they don’t. Counties and cities also need a way to borrow the tax money that still isn’t paid, by encouraging investors to lend to them. They do this by selling tax liens or tax deeds.

The taxpayer is sent a notice of when taxes are due and how much is due. This notice is usually sent to the owner’s last known address on Property Appraiser records or Tax Collector records. If not paid on time, a notice goes out to the taxpayer. If the taxes are still unpaid, the county or city advertises the property for sale along with other delinquent parcels in a newspaper of general circulation. Investors bid on the liens or deeds. The winner pays cash or certified funds, including all processing costs, and is issued a certificate or a deed showing it is paid and the terms of repayment, if any.

Tax liens (TL) and deeds represent a unique dual approach to the real estate business that can produce cash flow and property ownership, when a good acquisition model is followed. The model for tax lien and deed investing can be summarized as follows:

Test the Business of TL Investing

Acquisition of Tax Liens/Deeds

Execute a Business Plan for TL Investing

A tax lien is basically a loan that can be turned into a deed if not repaid after a certain period of time.

A tax deed is a deed to the property, which means ownership, which may or may not have a redemption period.

It’s important to note that every city, state and even county has their own rules and regulations on how to perform a tax lien investment strategy. Also, not every state offers this sort of investment strategy.

The comforting part about this strategy is that you do not have to be present within the state you are investing in. You can be in a different country, be lying in your bed, be on vacation, be sitting on the beach and still have access to utilize this strategy. You must register in the applicable counties database to get entry into their tax lien profile, some may require a form of deposit to proceed or even link a bank account.

As you will learn with our proper training, you can take things a step further and force a property into foreclosure if you choose. By doing so, you roll into the foreclosure auction portion of this strategy in which you can receive a greater return of your investment if the property is out bid by your fixed “max bid amount.” If the property comes in under that fixed “max bid amount,” you assume all rights to the property, and it is then owned free and clear.


In the state of Florida, there is a cap of 18% that can be awarded if the tax lien year you purchased is redeemed by the owner within 12 months, or by a purchaser of the previous tax year(s) who decided to force foreclosure. The simplest way to think about this interest rate is that you receive a 1.5% return on investment (ROI) per month and that percentage is capped at 18% in a calendar year. If 2 years pass since your investment it remains capped at 18% of your initial investment amount, the interest rate does not compound every calendar year.

In hindsight, there are 3 ways to get paid.

  1. The owner of the property clears its Tax Lien(s).
  2. A previous year Tax Lien investor clears the lien(s) and forces the property into foreclosure.
  3. You clear the lien(s) and force the property into foreclosure.
    • A. Your ROI is 18% of the TOTAL “max bid amount”, OR
    • B. You receive the property free and clear.

Just by reading this article, you may want to jump into this strategy as soon as possible. The good news is you can with the proper education and mentorship that Legacy provides. Understanding the proper execution of this strategy places you amongst very few who utilize this sort of investment process to gain their wealth. Knowing the proper exit strategies when you obtain the property is key to making the maximum return. Legacy will show you the way.

Areas of Review

Big picture takeaway points

Big picture takeaway points

  1. Tax lien investing is a way to obtain an almost limitless pool of quality real estate deals, provided you have a solid business plan behind you.
  2. You can do this strategy from another country, in your bed, or even on vacation!
  3. One of the most lucrative areas in real estate. Especially with the right education that Legacy provides.


Self-reflection questions to think more about the content

  1. Have I ever looked up the properties that are behind on their taxes in my county?
  2. In most counties and states you can look this information up online. Is it available in my county?

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