Done For You Tax Lien Investing

Is there such a thing as done for you tax lien investing where you just give your money to someone else and let them do all the work for you?

Can you purchase profitable tax certificates without doing the due diligence and going to the tax sale yourself?

There are 2 ways that I know of where you can not only have someone do all the work of buying profitable tax liens or tax deeds for you, and also have them manage your portfolio and take care of any redemptions or foreclosures for you as well. You can use a tax lien investing agent or you can invest in a tax lien fund. With either of these tax lien investment methods, someone else does the work of getting the tax sale list, doing the due diligence, bidding at the tax sale, managing the portfolio, and foreclosing on properties. You just sit back and collect the profit.

So how does it work and what's the difference between investing with a tax lien agent and investing in a tax lien fund?

With a tax lien investing agent you have a little more control over your portfolio, you can actually stipulate what type of properties or liens you want, and control whether or not you pay the subsequent taxes or start foreclosure on a property. You also have control over whether any profit that is realized gets re-invested. Tax lien certificates and tax deeds are held in your name, so they are your assets. The agent will set up an account for you and assign to you liens and/or deeds that they purchase at the tax sale. There is usually a onetime set up fee to set up your account with them and quarterly or yearly management fees.

When you invest in a tax lien investing fund you don't have as much control over which tax liens or deeds you purchase and how or if the profit is re-invested, this is all dictated by the fund. The plus side is that since you are buying shares in a fund, not investing through your own private account, there are usually no upfront fees. There is a management fee but for smaller funds these fees are typically low.
If you've wanted to invest in tax liens or tax deeds, but you just don't have the time to do the necessary due diligence or to bid at the tax sale, you may want to consider using a tax lien agent or investing in a tax lien fund. If you live in a tax deed state, but you want to invest in tax liens (or visa verse) it would be a lot less expensive to use a tax lien agent or invest in a tax lien fund then it would be to travel to another state to invest in tax liens.

Investing with an agent or in a fund is a great way for foreigners to invest in US tax liens or deeds. The process is easier because you have a U.S. entity bidding for you. You still would need to have a U.S. tax ID number, but you may not need to have a U.S. bank account, which is a requirement for all of the online tax sales, and there is no need to go to through the trouble and expense of setting up a U.S. entity just to bid at the tax sale, although you still may want to have an entity to hold any properties that you acquire through tax sales.

Agents and fund managers have a lot of experience purchasing tax liens and tax deeds at the sale. They know the buying strategies that make the most sense and they are able to get the highest returns for their clients. They can usually do better than you can at the tax sale, getting more successful bids at more profitable rates. They have teams set up to do due diligence on tax sale properties, along with access to resources that you might not have access to. This helps them to be better able to get more properties or more liens at better returns than you could on your own. They are professionals after all. This is their job, it's what they do for a living, and they're good at it. It would cost you more to have access to the services and resources that they have access to than the small management fees that you pay to have them do the work for you