Can You Buy A Tax Lien For $50?
The answer to this question is yes. It is possible to buy a tax lien for $50 under the right circumstances. If, for example, you buy a tax lien from a county that sells tax liens on a first come, first-served basis, or by lottery (and you're lucky), and the tax lien is for only $50, then yes. You'd own that tax lien. If the owner paid off the taxes, which they would 99.9% of the time on such a small lien, you'd get paid back your $50 plus interest (12-18%).
In the extremely unlikely event that the owner didn't pay off the taxes, you would then (after the 1-5 year redemption period) be entitled to apply for the deed to the property. However, this is usually a complicated legal process that is not the main objective of tax lien investing.
If what you really want is to own a property for $50, there are ways to accomplish that, but you won't buy a tax lien to do it. What you'll need to do is approach owners whose properties are being foreclosed on, and purchase the property directly from them. You can do this at any point in the process, but by waiting until after tax sale, all the way until the end of the redemption period when they're just about to lose the property, you'll ensure that all the owners you contact are desperate to sell before losing everything to government.
These owners fall into a couple of categories: people who have held out hope they'll be able to pay off the taxes, but can't; people who didn't know they owned the property, like heirs; people who abandoned the property on purpose because they couldn't keep it up or moved on and didn't want to deal with selling the home; and failed landlords and other investors who walked away from the property.
In any case, you'll find many of these owners just want to get rid of the property and be done with the situation. This is when you'll be able to pick up deeds to tax property for as low as $50.
by: Maggie Dawson
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