Are Over The Counter Liens Deals or Duds?

I get a lot of questions about over the counter tax liens. Would be tax lien investors want to know how to find out which counties have over the counter liens. Some of you have been told that tax lien sales are so competitive that you are better off buying left-over liens from the county. This way you can get tax lien certificates at the maximum interest rate, and the liens that you purchase are beyond the redemption period, you will be able to foreclose right away.

Part of this is true, if you purchase an older lien from the county, you will be able to start the foreclosure process sooner. However what you are not taking into consideration is that if tax sales are so competitive that you’re not likely to get anything good at the tax sale, then what makes you think that there is anything good left-over after the sale. Many counties will re-bid properties that don’t sell the first time, either right after the sale is over, or in another tax sale soon after. Anything left over after that is usually junk – unbuildable land or property that has something wrong with it. Yes you can get the maximum interest rate, yes you will probably be able to foreclose and get the property – in which case you do not get your money back. And then how are you going to sell an unbuildable piece of land, or otherwise junk property, and get your money out of your investment?

Remember the old adage “if it sounds too good to be true, it probably is.” If you really want to know how competitive tax lien investing in your county, check with the county treasurer or county tax collector. See if you can get the results of past tax sales. If you can’t do that, go to a tax sale and take note of what is being bid and which properties are being sold. If you go to the tax sale, then you’ll know firsthand what liens are left over and if they are worth getting from the county.