One of the first things that you have to do to invest in tax lien certificates or tax deeds is to get the list of properties that are in the tax sale. Sometimes you can find this list online, on the tax collector’s website. In most counties the list has to be published in the local paper 2-4 weeks before the sale. In states where tax sales are held on the municipal level, most of these lists will be small (less than 100 properties) and easy to manage. But in large cities and in states where tax sales are held by the county, these lists can be quite large. Although you can get these lists for free, there are times when you will want to pay for a detailed tax sale list from a tax sale list provider.
The tax sale lists that you get from the municipality or county do not always have the information that you need. Often, they will not include the address or physical location of the property. Usually these lists will only list the tax ID or parcel number, block and lot, owner of record, and amount due on the properties in the tax sale. It will not tell you things that you need to know before bidding on the property like: the acreage, type of property, assessed value, last sale price, and whether or not there is a mortgage on the property. To find out this information you can either go to the tax collector’s or tax assessor’s office and look it up yourself, or you can buy a detailed tax sale list that provides all of the tax assessment information, including the physical address of the property.
For smaller tax sales you may want to buy a detailed list. You might think that since the list is small, you could save the money and look it up yourself. I have found that this process is time consuming and that for small lists I am better off buying the detailed list. It saves me a lot of time in my due diligence; I get all the information that I need; and I only have to go out and look at the properties. For larger lists, I would rather do my own research. Detailed tax sale lists that are over 500 properties can cost over $50 and lists that are over 1000 properties can cost over $100. Large counties and counties with big cities can have lists of a few thousand properties and that can cost a few hundred dollars. So how do you decide whether you should buy the detailed list or do the research yourself for these tax sale lists?
First remember that if the original tax sale list has 1000 properties, there will probably be only 500 or so properties left on the day of the sale. Since most tax sale list providers do not update the lists that they have for sale, you will have to purchase the detailed information on all 1000 properties even though you will probably only use half of the information. If you choose not to buy a detailed list, then you may be doing research on a lot of properties for nothing, since half of them will not be in the tax sale.
So here’s what I do. If there is an easy way to get the assessment information that I need, that is if it is available online, I wait until about 4 or 5 days before the sale, get an updated list from the tax collector, and then I get the assessment information on the properties. To make it even easier, I limit the properties that I research to only certain areas that I’m interested in investing in. I may limit it to only 3 or 4 townships in the county and to only certain types of properties. If the assessment information is not that readily available, I’ll buy the detailed list. Some list providers will allow you to filter the list by property type, thus you only buy information on the type of properties that you are interested in.
Joanne Musa works with people who want to build an extremely profitable portfolio of tax lien certificates or tax deeds FAST. She is the creator of "Build Your Profitable Tax Lien Portfolio," an 8-week teleclass on how to invest in tax lien certificates and tax deeds for maximum profit, and founder of Tax Lien Consulting LLC, a consulting company specializing in tax lien investing coaching and education.
