Comments on: Onward!

By: Mark

Mark — Thu, 11 Jun 2009 21:13:24 +0000

@Adrian – Deed States like NC and TN will need significant capital. That is quite a barrier for the limited capital I have. You are right about vacant land but there are some sweet spots where the conversion rate for residential are reasonable. Definitely not upper middle or middle class homes. Usually, middle or lower middle class residential homes can be converted.

By: Adrian

Adrian — Tue, 09 Jun 2009 16:17:29 +0000

@ Mark – In that case, I would definitely consider moving into Deed States, as your hit rate (of property converting to ownership) is, by definition, much higher.

From my research, the most likely lien to ‘convert’ to ownership is vacant land … but, I could be wrong.

By: Mark

Mark — Tue, 09 Jun 2009 12:44:05 +0000

@Jeff – The main goal of Tax Lien investing is not the interest but the ability to gain control of the property with relatively low cost of entry. You make money if you are able to go through the due process which is different from county to county. If you are chasing interest rates, you should be looking at Iowa (up to 24%). But you gain most if you are able to secure the property and then fix-up, flip it or convert it to a rental. There is a lot of due diligence involved and it is definitely not like trading stocks.

By: Jeff

Jeff — Mon, 08 Jun 2009 03:10:07 +0000

Mark – Thanks for the further insight on the Tax Lien/Deed world. I’ve just started learning about them as a way to try and gain control (cheaply) of additional properties.

I’m not sure I understand fully where you are going with your efforts. Are you using the liens purely for the interest rate? Or do you see it as a cheaper way then the deeds to get in a position where you may be able to gain the property but will benefit from the interest?

I’ll be watching your experiences closely and hope to learn much from you on this topic.

Best of luck…Jeff

By: Mark

Mark — Mon, 08 Jun 2009 02:44:38 +0000

@Adrian – Yes, it is well contested. I participated in an online auction in MD and got out bid many times over. The main aim is to gain control of a good property which is about 1 in 10. The interest is just a nice to have but still better than savings interest rates. Deeds requires too much capital tied into one single property. There is more risk if you did not do sufficient research. You spread the risk a little with tax lien with the same amount of investment capital.

By: Adrian

Adrian — Sun, 07 Jun 2009 00:52:23 +0000

@ Mark – Yes, Liens seem easier (like in IL) but also seem to be well-contested. Also, to me, Liens seem to be a ‘financial instrument’ (one that you buy to gain a nice ‘interest rate’) whereas deeds are (potentially) a way to buy an investment (i.e one that you can buy/hold) cheaply … what’s your take on this?

By: Mark

Mark — Sat, 06 Jun 2009 15:08:04 +0000

@Adrian – I’ll be focusing on lien states. Deed states like NC and TN will need too much capital. I’m looking at states around me and expand every year. Starting with SC, MD and then GA and FL.

By: Adrian

Adrian — Sat, 06 Jun 2009 01:08:52 +0000

@ Mark – I think it would be useful – either in a comment (here) or in a separate post – to give the 7m7y Community an overview of the “business development plan” that your accountant helped you to put together.

Also, re the tax liens: are you looking to invest in lien states or deed states i.e. some states sell the lien over the property (it’s then up to you to foreclose, in the unlikely event that the owner doesn’t eventually pay up), while others basically auction the property subject to payment of the lien.

It’s been a while since I’ve looked at liens, Mark. Have I got this correct? And, what’s your strategy here and, what stage are you at?

By: Mark

Mark — Fri, 05 Jun 2009 20:52:25 +0000

@Scott – That is a great idea. I’m quite low maintenance so I have been waiting on the sidelines until I spot a deal. I don’t do renovations so my only furnishings are cheap furniture.

@Josh – Yes, I sell my stuff on craigslist. So far the furniture I got a decently priced (ala Walmart / Big Lots). I haven’t got furniture off craigslist yet.

By: Adrian

Adrian — Fri, 05 Jun 2009 05:20:43 +0000

@ Scott – Great idea; what do you think, Mark?

@ Josh – Ditto; Craigslist is a wonderful resource for this sort of stuff.