7 Steps to Get Property with Expired Tax Liens

A question that has come up in the past about expired tax liens and with the recent increased competition for tax deeds is: “What strategy should I use when buying tax lien certificates if I want to get the deed to the property?” 

Some specifics related to that answer will vary from state to state, so know the rules where you are investing.

Step 1: Research Tax Lien Properties

tax lien researchWhen buying any tax lien certificates, the first step is to research the properties to ensure they have sufficient equity to make the purchase of the tax lien certificate’s cost significantly less than the value of the properties backing those certificates. 

When doing that, keep in mind that you will have to pay additional taxes, typically an additional two years’ property taxes to eventually get a deed to the property, and there will be some county and/or private legal costs involved. 

The good part is those costs can total about 10% of the value of the property. 

The caution when doing your research is to make sure the property value is still there; sometimes the past due taxes are based upon a property with a building and today that building is no longer there. 

Some states use a process of premium bidding, meaning you can bid more than the taxes due for the tax lien certificate.  In that case, just like buying a tax deed, you need to know your maximum bid.

Want to learn more about tax lien and deed investing? Act now and get access to a FREE Master Class (valued at $197), a gift to you from Ted Thomas.

Step 2: Have an Exit Strategy

Step two is to make sure the property can be sold quickly for a reasonable profit. In other words, have an exit strategy.

Some properties have value on the tax rolls, but are in a part of the county that is years away from being developed, if it ever is developed.  Make sure the property is something you are confident will sell quickly if you end up owning it.

Step 3: Find Out Who Is Least Likely to Redeem Their Property

Step three, if your objective is to acquire ultimately expired tax liens, is to find property owned by delinquent taxpayers, who are less likely to pay the past due taxes and redeem the property. 

They are often listed with out-of-state addresses. 

Your research may also show that the property is owned by an out of business company or deceased individual; these situations increase the probability of the taxes not being paid. 

You can pretty much be assured that the taxes will not be paid by those people. 

Eventually the taxes may be paid by the former company’s owner or heirs to the property, but those taxes being paid is much less likely than when the delinquent taxpayer is living on the property.

Step 4: Bid at the Property Auction

expired tax liensWith step four you need to win the bid. 

There are various bidding processes in different states, with the most common being an interest rate bid down process. 

In that situation the interest rate may get bid down from its maximum, but typically, with the type of property we are discussing, not as low as homes with an owner/occupant. 

There are also states that use a premium bid process, where you can bid above the minimum bid to be the winning bidder. 

In those cases bidding 20% of the value of the property may eliminate your competition, and in the end you will still get a bargain.

Step 5: Wait Out the Redemption Period

States have a period of redemption of one to three years during which the past due taxes can be paid. 

If the taxes are paid, the property owner retains the property, and the tax lien certificate investor gets paid his or her investment plus interest. 

Step 6: Take Possession of the Property

After the redemption period has expired, the tax lien certificate holder can get possession of the property. 

In some states, the process is very simple and done through the government agency that sold the tax lien certificate; in others a separate foreclosure process is required and may take a few months and some additional cost.

In all cases, when the redemption period has expired, the tax lien certificate holder should take the actions needed to get the deed to the property.  That deed will be a tax deed. 

The tax deed holder now owns the property, just as if it had been purchased at a tax deed auction.

Step 7: Sell the Property

To sell use the same techniques Ted, his visiting professors and coaches talk about:

  • Use yard signs
  • Sell to neighbors
  • Use a real estate agent
  • Small ad in the classified section of a newspaper or advertiser publication
  • eBay and Craig’s List
  • Direct mail to neighbors
  • Market to your buyer’s list
  • Buyer’s convention
  • Private auction

Getting Property With Expired Tax Liens: Conclusion

Getting a tax deed by buying a tax lien certificate will take longer than buying property at a tax deed auction, and will sometimes result in getting all your investment returned plus interest instead of a deed. 

The advantage of acquiring property through expired tax liens is that you will typically pay less for the property than in a tax deed auction. 

Many of Ted’s students have used this expired tax liens technique to make some of their most impressive investments with the biggest returns. 

It is not instant gratification. This is not a get rich quick process; it is an investment you can do for the rest of your life with consistent high returns

The more techniques you know to make this business work for you, the more likely you will be successful, and Ted Thomas can teach you.

There’s no one more qualified than Ted Thomas, America’s leading authority on tax lien certificates and tax defaulted property investing.

Ted Thomas is the only one who provides full support and complete training with home study courses, Q&A webinar sessions, live tutorials, workshops & web classes, and personal one-on-one coaching.

Want to learn more? Start your education today for FREE with the this Master Class (valued at $197).

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Ted Thomas

Ted Thomas is America’s Leading Authority on Tax Lien Certificates and Tax Deed Auctions, as well as a publisher and author of more than 30 books. His guidebooks on Real Estate have sold in four corners of the world. He has been teaching people just like you for over 30 years how to buy houses in good neighborhoods for pennies on the dollar. He teaches how to create wealth with minimum risk and easy-to-learn methods.

The Ted Thomas Difference:

  • Ted is recognized as America’s Tax Lien Certificate & Tax Deed Authority and has been helping people with investing in tax defaulted properties for over 30 years.
  • Ted has built a team of certified coaches that have 70 combined years of auction experience and are available to his students by phone to guide and mentor you to avoid getting overwhelmed or worse, losing money
  • Ted has ironclad PROOF that what he is teaching you does work. With hundreds of successful students providing testimonials and a 4.9 Google rating which is unheard of in this industry.
  • Ted and his staff don’t hide behind a website; they can be reached during office hours at 321-449-9940.

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