State Tax Lien & Deed Sales List
Knowledge is Success: Types of Tax Lien Investing Strategies
Written by: Thomas Needles
Bidding on an item is a craft. It requires timing, knowledge and savvy to bid well and win. Tax lien investing is a culture with seasoned and unseasoned purchasers. You need not to be seasoned to do well; you need to be educated. Follow this guide of tax lien strategies to win bids even from the most senior investor.
Slow and Steady Will Not Win This Race
In order to be successfully competitive, your bids need to be quick. Those who have done their research will be able to recognize a good deal immediately, and it will only be a matter of seconds before a tax lien will become history. Tax lien auctioneers will not grant bidders a great deal of time to contemplate whether or not they are going to bid. There is a limited time available to auction off the tax liens, and if no one else quickly bids on the tax lien, it is granted to the last bidder and the auction proceeds. The best method is to watch and determine the tempo of the auction and join in at the same pace. This will vary from auction to auction, especially between smaller and larger auctions, so be prepared for this.
This tax lien investing strategy is extremely important and can make or break the trip you have made to the auction. Make sure you know what types of tax liens you're seeking so that you can bid immediately.
Make Your Voice Heard
Being timid is something that needs to be left at home. All too often beginning bidders fail this tax lien investing strategy and call out bids that are not heard. You're competing for investments and your chance to make serious money. Your bids need to be strong and authoritative. You bids need to say, "I want that!" Make the trip you have made to this auction worth it and walk away with bids you wanted to invest in.
Your Appetite for Success
Auctions do not always cease when lunch time arrives, and hungry bidders will leave granting you an optimal environment for tax lien investing success. The lessened amount of competitors will double, even triple your chances at prime properties. You need to have good tax lien investing strategies to maximize your earning potential. It is important to know the bid down interest and bid up premium techniques as you will have leeway to manipulate these tax liens into making even more money for you!
Auctions do not always cease at the time that was posted. An extension to the time frame may be grant by the auctioneer if there are still a number of properties left. The county and the government much rather have these properties off their hands and into yours. Remember: your initial investment in the tax lien is like a loan to the government which is later reimbursed monetarily or with ownership.
Staying until the end is an excellent tax lien investing strategy because most bidders will leave when the scheduled time comes. It may be 10 minutes after this that the auctioneer decides to continue. Here, once again, you are given an excellent chance to obtain tax liens with minimal competition. In fact, if you are the only one left, the auctioneer will still allow you to bid! Auctioning does not get much easier than that.
Make sure you linger at the end. Most people do not know about this tax lien strategy, which gives you an extremely competitive edge. Your knowledge of these strategies is your success.
Avoid Institutional Investors
Homes are the most likely target for institutional investors. It is a waste of your time to compete with them as they have millions of dollars to purchase with and will accept extremely low interest rates. They can also pay off the bank and skip the foreclosure process as well. When dealing with this type of competition, is it best to pursue non-residential or non-homestead tax lien properties. Acquiring this prime real estate with high return rates is an excellent way to boost your income and your portfolio. It is the best and most strategic method of bidding against institutional investors.
There are ways to avoid these competitors: Attend smaller auctions with a smaller inventory of liens. These usually do not attract the bigger, institutional wallets.
You Get What You Pay For
While not all liens minimally priced are worthless, you need to educate yourself on the property before investing. Homes that sell in the beginning hundreds may not redeem and leave you with lots that are in dire condition. This is not always the case, but the best tax lien investing strategy is to educate yourself on the property before investing to prevent this type of mistake.
If visual and background investigation is not possible due to time constraints or other reasons, it is best to bid then on homes priced over $500.00 or $600.00. This is considered the line of safety where the properties are worthy of investment. These homes also have a low foreclosure rate and risk of having to sell the home on your own.
With these professional tax lien investing strategies on your side, even the most experienced tax lien bidder will find you a worthy competitor.
