Tax Liens (and Deeds) have always been an enforcement model for delinquent property taxes. What has changed recently is your average county's ability to sell liens. How has this changed. In the past, the only way that counties could sell liens was for local investors and the occasional out of state investor to purchase them. For some counties this approach worked well, but for others it failed miserably. Counties that were located in real estate hot spots, or in states that offered the highest returns could often draw a small group of locals, as well as financial institutions and out of state investors. Between them all, many counties could sell most of their liens every year. However, for every county that had a successful showing there were 10 more that had a mediocre turn out at best. Imagine counties with more than 5,000 liens available starting their Tax Sales with less then 20 people in the room (including county officials). This was a scenario that played out every year for decades.
So how has the new electronic age changed all of this? Two words, county websites.
County websites are being created and updated daily. Counties that couldn't reach investors in other parts of the country have now turned on their electronic OPEN signs and provided the same information investor had to do hours of on-site research to obtain just 5 years ago. Every county has the ability to sell their liens and deeds now and that equals more revenue for the county. As a result of this, counties that have been historically difficult to work with for Tax Lien investors have changed their tune.
If you're just getting started as a Tax Lien investor, or if you're new to the online aspects of investing, these are most important features to look for on a county website:
1. Look for information about delinquent property taxes or liens on the front page of the County Treasurer's or Tax Collector's web page. Sometimes the information you're looking for can be found on the home page of the county website. It's a good sign that they're going to be helpful.
2. Very Important! Look for a property records search tool on the website. What good is finding a Tax Sale list if you can't take parcel numbers and research the lien or the deed? Record search features are the single greatest tool for online investors.
3. Once you locate a records search feature, look for pictures of the parcels. Some counties have pictures of every parcel right on the county website. It doesn't get much easier than this.
Remember, if you're investing in liens you're not trying to figure out exactly what a property is worth. You're only interested in securing your investment by selecting liens that have been placed on properties that have value.
Ask yourself this question with every lien that you research, " Is the property owner going to redeem this property because of its value, or let it go to foreclosure because it has no use or value. " The answer to that question will tell you whether the lien offers a high level of security, or a higher chance of going to foreclosure.
