How a tax lien - tax deed sale works

[Rob]

First part of the process is the tax lien.  When person fails to pay the taxes on their estate, a lien may be placed against the property.  Depending on the state you can obtain a tax lien by winning a random draw, being selected in a rotating type system or the most common would be a bidding process.  When you place the bid, you place a bid for the interest rate or premium on the tax lien you money you must pay, in most case the lowest rate will win the bid.

After a period of time the owner can repay the tax lien plus the interest.  If the owner fails to do this, you can than proceed with foreclosure.

When the property is put up for a tax deed sale, the winning bidder will pay you the money back for the tax lien plus the interest you initially place a bid on.  Another possibility is when the property goes up for foreclosure you have the first right of refusal, and you purchase the property.