This is the third article in an 8 part series. If you missed the first two articles in this series you can read them at http://www.taxlienconsulting.blogspot.com/.
Once you’ve completed the first step to building your profitable tax lien portfolio and you know what your purpose is for investing, you can move on to step two in this process, which is to determine where you will invest. You need to identify the area or areas that you will be investing in. If you want to invest in multiple areas or more than one state, I suggest that you start in one area and learn how to be successful with that one before moving on to another area. Each state and in some cases, each county may have different laws and procedures regarding tax sales. What worked in one area may not work very well in another.
The easiest thing for you to do would be to invest in the state that you live in. If you want to invest in tax liens and the state that you live in only sells deeds, then you might want to look at a nearby state, or perhaps a state that you like to vacation in. Maybe you could write off your next vacation if you attend a tax sale while you’re vacationing. I believe that it’s always best to invest in areas that you know, so I think that it’s better to invest in your own backyard. Some states, for various reasons, are just not good places to invest in tax sale properties. Either the laws in that state are not favorable to the investor, or there is not much available, or they may not have any tax sales at all. In that case you may have to go to a different state and an area that you know absolutely nothing about. I suggest that you find someone who is familiar with that area and partner with them. There are different ways that you could do this. You could form and LLC or Partnership with them and split the profits of your investments or you could just hire them to do the footwork for you.
I am frequently asked about investing online and through the mail. People want to know if they can invest in tax liens or tax deeds without actually going to the sale. There are some states where you can do this, but I don’t recommend it unless you can look at the tax sale properties or have someone that can look at them for you. Although you can do some of your due diligence online, I always recommend that you physically look at the property. I’ve been burnt, early in my tax lien investing endeavors, by not looking at the property before I bid on it. I still have a couple of worthless lots in my tax lien portfolio.
This is a summary of the second step in a 7 step process necessary to building a profitable tax lien or tax deed portfolio. In subsequent articles I will take each of the remaining steps and go over them in depth to give you an idea of what each step involves. For more information about how you can build your own profitable tax lien or tax deed portfolio, I invite you to sign up for the free preview teleseminar to my new 8 week coaching course, "Build Your Profitable Tax Lien Portfolio." To register, go to http://tinyurl.com/f2hy4.