Posted by JT-IN on May 21, 2007 at 22:17:34:
You must have some misconceptions about the tax lien process… both Property Tax Liens and IRS Liens.
Yes, there are cases where you can obtain a distinct advantage by obtaining a property tax lien, but there is rarely a quick turn around involved in buy tax liens for property taxes. You are looking at a year or longer holding period, depending on the venue. Some cases much longer.
IRS Liens are not sold like property tax liens. You can acquire a property with an IRS lien involved, usually via a mortgage foreclosure. When a property in mtg or deed of trust foreclosure is acquired at a public auction, and the IRS has been properly notified of the action and sale process, then the IRS will retain a period of time to redeem the property from the auction purchaser and reinstate their lien. This period of time for IRS redemption varies, usually 120 days from the date of the sale, but it can be longer, up to the length of time the owner has to redeem the property from the mtg foreclosure.
Some states have NO redemption period for mtg foreclosure, and in that case the IRS redemption period is 120 days. Other states have 180 day, or even 365 day mtg redemption for the owner, following the auction. In these states the IRS redemption period is extended to match the rights of the owners mtg redemption rights. So the longer of 120 days, up to 1 year for IRS redemption rights.
These investments are usually “deep pocket” investments, meaning you got to have lots of cake in your pocket in order to play the game. Forget about all the late night infomercials on tax lien investing. That was the old days, and there is simply way too much money in the game today for someone to end up buying a house for 600 bucks like the ads state.
No attempt to discourage you here, just suggesting that you learn what there is to know about much of it… then ferret out your niche. All the best.
JT-IN