Is Online Tax Lien Investing For You?

One of the biggest concerns for new tax lien investors is how can they purchase tax liens without going to the tax lien auction. Many people don’t have the time freedom to attend the tax sale and not every state conducts tax lien sales. What if you live in a state that does not sell tax liens, or if you don’t live in the United States, how can you invest in tax liens?

That’s why a lot of new tax lien investors are attracted to the idea of buying tax liens online. They want to be able to purchase tax liens from their computer without having to attend a physical tax sale auction. It’s easy to register and bid at these tax sales online and many counties also have resources for you to research the properties online as well.

So How Do You Get Started?

1. Find out which counties have online tax liens sales. More counties are starting to conduct their tax sales online each year. Almost all of the counties in Florida have online tax lien sales, and about half of the Arizona and Colorado counties have online tax sales as well. Beyond that, as of this writing there are two other states that have at least one or two counties that have online tax lien sales, Illinois and Maryland. To find out what online tax sales are coming up, you can sign up for a free membership at www.taxsalelists.com.

2. Once you find out which counties have online tax sales, go to the tax sale web site and read all of the information about the tax sale. Make sure that you understand when you need to register, how to bid, and what your responsibilities are as a bidder at the tax sale. You’ll need to know when and how you’re expected to pay for successful bids and whether or not you’ll need to have a deposit wired ahead of time in order to bid at the tax sale.

3. Find out what information is available on the tax sale web site or on the counties web site for researching the properties that are in the tax sale. Can you download the tax sale properties in an excel file that has all the information that you need to make a decision on whether you want to purchase the tax lien on a property or will you have to look up each property individually to find the assessment information? Will you have access to maps or pictures of the property? Will you have access to prior lien information?

4. Register for the tax sales that you are interested in participating in as soon as registration is open for the auction. This will give you plenty of time to research the properties and to deposit money if a deposit is required.

5. Don’t do your due diligence on the tax sale properties too soon. If you do your due diligence a few weeks before the tax sale, chances are that at least half of the properties that you spent time researching will not be in the sale! Delinquent taxpayers may pay the taxes on the property and remove it from the tax sale up until the day that the sale begins, so pay attention to updates.

6. Make sure that you get your bid in before in before the sale ends. Some online tax sales auction properties in batches and the batches begin and end at certain times. Bids will not be accepted after the deadline.

7. Use caution when bidding; make sure that you’re bidding on the correct property. Bids once submitted, cannot be withdrawn. You must pay for all of your successful bids by the deadline or you will loose your liens and be barred from future tax sales. So make sure that you have the money to pay for your successful bids in form expected for payment by the county.

Now you know how you can start buying tax liens online. Remember each county only has their tax sale once a year. Arizona counties have tax sales in February and March. Florida counties have their tax sales in May and early June. Maryland counties also have tax sales in May and June and Colorado and Indiana tax sales are held in the fall. I think that you’ll find that many of the counties that have online tax sales make it easy for you to find the information that you need online.