Q: What are tax liens? How do I invest in tax liens?

A: Tax liens are like regular liens placed property except that they are placed by the county for property taxes owed. About half the states in the US use tax liens, and the other half use tax deeds. Tax deeds are work a little differently than tax liens. If you are interested in aquiring property, then tax deeds might be of more interest. Tax liens are better at providing a guarenteed rate of return. Some tax liens can have very good rates of return such as 18%! Other tax leins have the potential for having even higher rates of of return.
Now as how to invest in them…the county wants to be paid. The county needs the money to provide services for it’s citizens. They would rather be paid now, than later. So they will sell the tax liens to the public. You can buy the tax lien, basically paying the county the taxes they are owed, and now you hold the tax lien on the property.
The tax liens are usually sold at tax lien auctions. Every county operates in it’s own way.
First you need to find out when and where the tax sale wil be held for the county you are interested in. Contact the Tax Collector or Treasurer’s office for the county. They will hopefully be able to give you the information you need. Find out if you can get a list of properties available at the sale. Find out the interest rate. Gte the rules for the sale. As I said, every county operates by their own rules, procedures. So you may find some counties that are easier to deal with. And it might be like pulling teeth trying to get information out of others. It really helps to learn the terminology. Also find out if they have unsold tax liens from the last sale. You maybe be able to buy these straight out

Books about Tax Liens:
Profit by Investing in Real Estate Tax Liens : Earn Safe, Secured, and Fixed Returns Every Time by Larry B. Loftis

Make Money in Real Estate Tax Liens : How To Guarantee Your Return Up To 50% by Chantal Howell Carey and Bill Carey

The Complete Guid to Investing in Real Estate Tax Liens & Deeds: How to Earn High Rates of Return – Safely by Jamaine Burrell

Tax Lien$ by Michael Pellegrino

The “You Can Do It” Guide to Success in Tax Lien and Tax Deed Investing, Vol. 1 by Lillian Villanova

The “You Can Do It” Guide to Success in Tax Lien and Tax Deed Investing, Vol. 2 by Lillian Villanova

The 16% Solution How To Get Interest Rates by Joel S. Moskowitz

Tax Lien Certificates: A Little Known Government Program That Can Make You Financially Independent by Jim Yocom

Winning with…Real Estate Tax Sales: An Investor’s Guide to Real Estate Tax Lien and Tax Deed Sales by S Hennin and SK Kenney

Tax & Liens Auctions: The Ultimate Guide for Investors by Natalia Foley

How to Buy New Jersey Tax Liens that earn 18% by Merlin B. Coslick

Real Estate for Pennies!: Investing in Property Tax Liens for Profit and Property/Based on Colorado Real Estate Law by Ed C. Tomlinson

Property tax lien foreclosure: Forms and procedures by William A Campbell

Federal Tax Collections, Liens, and Levies by William D. Elliott