I’ll start Chapter 2 with important details on how tax lien work, to figure out how to operate in the American real estate market from another perspective.
America is very big and believe me there are so many certificates that Counties put up for sale on their websites, so choosing the place is crucial, personally I started to focus on some states that I visited personally.
The best tax lien with risk/return opportunities are: Texas, Florida, Arizona, Georgia and Illinois. Interest rates clearly vary, in the table you will find the details:
|State interest rate||Duration redention|
|Florida 18%||2 years|
|Illinois 36%||2/3 years|
|Iowa 24%||2 years|
|Maryland 18%||2 years|
|Ohio 18%||1 year|
|Texas 25%||2 years|
|Mississippi 18%||2 years|
|Arizona 16%||3 years|
If you already know some areas or have already visited a State in the past, it can be an advantage because if you find a tax lien you will already have an idea, believe me that it is important not to start from scratch.
I’m not saying that to invest in tax lien you already have to know the area but definitely it’s a help, if you are not familiar with the places you can turn to Google. There are websites where you can consult the information and create a business plan, the most important are:
zillow.com, realtor.com, homesnap.com neighborhoodscount.com and redfin.com
These sites will provide you with a lot of important data, to get to the auction more prepared than your competitor, I add other sites that provide essential elements for your research:
You’ll find demographic, economic, crime levels and valuable information to see if there will be developments in cities. For example, if there is a plan to build a factory or university, real estate market could rise as there will be workers looking for a home.
Once you’ve done all the analysis, you’ll have to compare and choose the best tax lien, be careful you’ll have to face a battle with other competitors, but having an action plan is crucial. Don’t forget to set a budget for each transaction you’re going to do (on the stock exchange is money management) and the duration of the investment.
Done analyzing all the elements outlined above, you will have to face the auction to finalize the purchase of your tax lien, well in the next chapter there will be an update.