I would like to hear anyone's experience with buying "tax liens" as a way of obtaining high interest and/or a nice property at a low price. Purchasing tax liens seems to boil down to two possible outcomes
- One loans money for not more than three years (where I live) at very low risk and a good interest rate, typically between
- After three years (where I live), one then owns property bought for the price of about several years (worst case) of back property taxes.
Tax liens where I am are typically bought through auction, where one bids the interest rate one is willing to accept for as much as three years. The lowest interest rate bid wins the auction.
I am considering putting about $5000 into this, which is well south of 5% of my total portfolio. I would like to own some land (carefully researched in advance). This means I would likely have to hold a few properties and, after three years, be prepared to own all.
I would deal directly with the involved local government, who "oversees" the person currently owning the property and owing property taxes on it.
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