How Investing in Real Estate Tax Liens Could Be Your Starting Point

How Investing in Real Estate Tax Liens Could Be Your Starting Point | Blog | InvestingTE.com
How Investing in Real Estate Tax Liens Could Be Your Starting Point | Blog | InvestingTE.com

What was your first investment vehicle of choice and why? 

Join our journey today for my first investment choices and why. 

We aim to inspire to get you closer to taking action.

Time available, knowledge, barrier of entry, and confidence allows us to begin new journeys. 

How do we arrive at these decisions though? 

Well, there are many factors that must be aligned.

What your daily responsibilities are plays a major role. 

How much time you have to pick up something new, into your life’s structure, is not always easy. 

Some people may have a lot of time while others have very little time.

So how do you align where to apply a learned skill to achieve financial advancement?

My Personal Experience

How Investing in Real Estate Tax Liens Could Be Your Starting Point | Blog | InvestingTE.com
How Investing in Real Estate Tax Liens Could Be Your Starting Point | Blog | InvestingTE.com

Well, I can only give you my experience and hopefully it creates the ability for you to create your own plan.

Let’s get started.

With a high passion of determination as a youngster, I always set goals.

Early on, while school shopping mom, I learned quickly that if I wanted something, I was going to need to create a path to getting it myself. 

You see, mom only had $40 in her budget to get me new gym shoes for back to school shopping.

After observing the choices in the shoe store, it dawned on me quickly that the shoes that were $40 or less, were of no interest to me in the least bit.

  • Nor were any of those shoes going to cater to my ability to keep, maintain, and earn new friends which was definitely important to me. You see, at 9 years old, these things matter.

That day, I ended up getting the best pair $40 could get me until my next shopping day.

I said to myself, “This will never happen again…I will need to (at least) add to mom’s money or be able to purchase what I want on my own…” My father’s notion was that – I didn’t need any new shoes.

As far as he was concerned, he used to wear shoes until they had holes in them! “Okay pops, we are not in the Robert Taylor projects anymore…” I thought.

So my entrepreneurship started. Babysitting, mowing lawns, delivering newspapers, shoveling snow and racking leaves became a part of my free time right away. I began goal setting. This was a new endeavor I set for myself as I calculated how much I’d earn over time.

Next, I followed my planned earnings with a targeted savings amount.

When I achieved that target, there was usually a planned purchase of something. Most of my goals usually involved 3-12 months of disciplined saving.

This was my first experience with setting financial, disciplined goals.

First, finding a means to earn, followed by a target date to achieve the goal. And yes – I had a schedule.

There was no way I was going to fit this extra activity in between sports, family obligations and time with friends, without scheduling.

This pattern never ended. It just excelled as I grew older. Time available, actionable earning techniques, and an end-goal.

Fast Forward to Late Teen/Early Adult

How Investing in Real Estate Tax Liens Could Be Your Starting Point | Blog | InvestingTE.com
How Investing in Real Estate Tax Liens Could Be Your Starting Point | Blog | InvestingTE.com

In Is this your beginning? (first blog), I briefly explained some of my interests and the resources that inspired me.

I will expand upon these ideas here. Please check out the blog if you haven’t already (3 minute read). 

What I soon discovered was that I needed to broaden my horizons by learning new ways to make money. After doing all the odd jobs as an adolescent, I didn’t stop there.

I just added to it. Soon I would begin to teach myself other investing strategies – stocks and real estate. But before that, came my “first job.

“I landed a job when I was 15 at a shoe store. Hated it! I knew then, retail sales was not my passion. I couldn’t stand all those women coming in to try on 15 pair of shoes to buy ZERO pair! Really?

“Baby let me try on that size 6. You know what, get me the 7. Let me see the 7.5. No…let me try that 8…” I was about ready to blow a fuse!

“Lady! Your grown ass don’t know your own shoe size at your age!? I thought…” I didn’t have the patience or energy for this.

Usually for each size, there were about 2-3 pair getting pulled…

At that time, to me it was very frustrating wasting my energy to pull all those shoes for an adult I felt was incompetent of knowing their own shoe size.

Or perhaps, they were projecting their wishful thinking onto me! The poor sales person responsible for getting and restocking all these shoes!

I learned then that some women look at shoes like I’d look at baseball cards (at the time). 

A real lesson for me was learning how it felt to be somewhere for hours doing “my job”. B-O-R-I-N-G.  Of course, I also was forced to learn patience.

I definitely liked doing my odd-jobs better.

At least when I completed my odd-task-driven jobs, the time seemed to go by much faster.

“If this is what it looks like to earn money, I MUST find other ways” I thought.

Therefore, my interests into investing was ignited. I had heard people talk about stocks and real estate and now it was time to start investigating. 

I became a sponge for the knowledge of investing and entrepreneurship.

Funny that a person that hated reading was now going to Barnes and Nobles to find reading material to expand my knowledge. 

Some of my first reads were How to Invest from $50 – $5,000199 Great Home Businesses You Can StartThe Everything Investing BookRich Dad Poor Dad and Morningstar’s Stock 500.

Although I began reading investment material in my late teens, I didn’t actually have any funds to invest in either stocks or real estate until my early 20’s.

Most of my money went towards, entertainment, shoes, clothing, and transportation.

However, I did buy my own surround sound system for my bedroom by 14 and my own car by 18, but investing money meant “disposable income.” 

After-all, it would take $500 just to open a Scottrade account. Soon after, I purchased a real estate strategy called Pennies on the Dollar that catapulted my investing knowledge big time.

Now I was getting somewhere.

With the knowledge of investing in stocks and real estate, I had found two low barriers of entry that I could 1) afford and 2) sustain.

These are very key components for all of us – 1) affordability and 2) the ability to sustain throughout the life of the investment strategy.

Investment Strategy

Macro Investments LLC: Real Estate Investing 101: Why Tax Liens & Tax Deeds (Personal Development & Real Estate Investing Education)
How Investing in Real Estate Tax Liens Could Be Your Starting Point | Blog | InvestingTE.com

Affordability, time to sustain and understanding are all very key components to being able to take action.

My ability to start my stock portfolio through Scottrade and to begin real estate investing in tax liens nationwide became my niche.

All my studying was finally coming to fruition. 

Using what I learned from the Pennies on the Dollar course, I knew that the availability of online auctions for tax liens purchasing, made this strategy ideal for me due to my planned lifestyle.

By this time I was working full time and had decided to pursue a career with my employer through Logistics/Operations management.

For me, this career involved relocating. 

I had invested many hours learning how to perform the vast due diligence to reduce the chances of me purchasing a bad investment.

I had attended several auctions by this time and my confidence through education, and action, was blossoming.

Tax lien and tax deed investing is a high risk-high reward investing strategy, but I didn’t have anything to loose being a young adult…High risk wasn’t a concern.

By this time, the Scottrade account was started so my portfolio had begun.

My next plan of action, was to begin my new found real estate investing strategy.

Why Tax Liens and Tax Deeds?

How Investing in Real Estate Tax Liens Could Be Your Starting Point | Blog | InvestingTE.com
How Investing in Real Estate Tax Liens Could Be Your Starting Point | Blog | InvestingTE.com

Literally, I could possibly invest in tax lien properties (or tax lien certificates) for the amount of an entrance bid (or $250).

There are over 3,100 counties in the USA that hold tax liens or tax deeds sales.

Many of these sales start with low opening bids. 

I found it astonishing that an investor could attend an auction, become a winning bidder, and stood the chance to become the owner of that property for their winning bid amount (minus legal fees).

“No way!” I thought. But yes, its true!

  • With proper litigation, planning and appropriate actions, a tax lien investor can become the owner of real estate for pennies on the dollar.

My career in Logistics and Operations took off. I loved what I was doing creating teams and meeting the challenge of our team becoming top performers.

I loved it so much I made myself available to being relocatable throughout the country.

My obligations usually required about 40-60 hours per week in addition to staying on top of crucial communication amongst my team members and supporting parties. 

My plan was to continue growing personally and professionally.

I would learn myself and others better when it came to self and team development. I knew that I would live in a city about 2-4 years before relocating again.

I was aggressive and ambitious about my ability to grow and achieve my goals. My early childhood had already taught me those lessons. 

Along side of the day-to-day demands of my job, I found that stock investing and investing in tax liens and tax deeds was the perfect real estate investment strategy for my lifestyle.

Learning the due diligence it took to decide what to purchase at the online auctions or in-person auctions, was the bulk of the work.

The actions after are either, sit and wait, or clean up and resale. 

  • Tax Liens – When purchasing a tax lien, most of the time the owners redeem. This lands you interest income. Dependent on which state you invest in, you’re usually looking at 5% to 16% interest and in select states up to 48%, 50% and 72%! Wow, right!? – Then if the tax-payer doesn’t redeem, you can gain ownership of the property (minus legal fees) for your winning bid! Wow, right!?
  • Tax Deeds – When purchasing a tax deed, you are buying the property directly. Some deeds are already delivered with a clean title and some are not. Your must know this prior, but again you are buying a property at a huge discount via a tax deed auction. While due diligence is still required, you can make successful purchases and cash out based upon your exit strategy. 

With my demanding schedule, these investment options were perfect for me.  

Time preparing for the auction followed by an entrance and exit strategy plan, and I was prepared to take action.

My alignment to finding investment strategies that complimented my lifestyle was key in my progression. I’ve purchased many tax liens and tax deeds in which all have brought great profits. 

Finding an investment strategy that is helpful and complimentary to your lifestyle is key. 

For more ideas on possible strategies that may compliment your lifestyle, check out Where is the best use of YOUR time and YOUR money? and How to Scout Deals: A Real Estate Investors Handbook

It’s a great resource and doesn’t exhaust tons of time teaching you!

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Thanks for joining us for today’s journey faithful readers-future leaders!

Love ya and have a great day!  

Please comment your first investment strategy and why. 

Should you invest in tax liens?

Tax liens are known to produce better than market rate returns.

However, you must be educated on how this investing strategy works because risks can be high.

Higher risks can produce higher returns.

Learn to invest in tax liens and tax deeds through this source.

What is a property tax lien?

A lien is a claim or legal right against assets that are typically used as collateral to satisfy a debt.

A lien could be established by a creditor or a legal judgement. A lien serves to guarantee an underlying obligation, such as the repayment of a loan.

If the underlying obligation is not satisfied, the creditor may be able to seize the asset that is the subject of the lien. There are many types of liens that are used to secure assets.

Learn to invest in tax liens and tax deeds through this source.

What is income tax lien?

Tax liens can produce interest income.

When an owner redeems, there is interest added to the back taxes and sometimes penalty fees.

If you are the owner of a tax certificate that redeems, you will earn income on your investment.

The county will send you a 1099 at the end of the year for any interest income earned.

  • To learn the eligible interest income by state and the tax lien and tax deed investing process, purchase this guide.

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