So I thought that I'd share with you some ways that I've Abundance With Money Review been able to still get double digit returns on my tax portfolios regardless of the competition. I have 3 different strategies that I use, 2 of them are strategies that I use for live tax sales and the other one is a strategy that I use for both online and live tax sales.
The first strategy that I use for getting tax certificates at interest rates of 15% or higher is to target properties that the institutional buyers don't want. This cuts down on a lot of the competition. So I go to out of the way, more rural areas and I bid on smaller liens. About half of the liens in my portfolio are on vacant lots. Before bidding on them, I make sure that they are good, buildable lots, on paved roads with utility access.
The other half of my portfolio from live tax sales consists of small utility liens. Typically these liens are from $200 - $600. In New Jersey and in many other lien states, unpaid utilities, such as sewer, water, or garbage pickup charges can be sold in a tax sale. You are issued a tax sale certificate for these liens and they are treated the same as a tax lien. Because these liens are typical small the institutional buyers usually do not bid on them, so you can get these liens at much better rates than the larger liens that everybody wants.
These 2 strategies work well for live tax sales, but what about the online tax sales where the interest rate is quite frequently bid down to single digits. I will let you in on my secret for bidding at these tax sales - don't do it yourself. Invest in a tax investing fund or use a tax lien investing agent to do the bidding for you. You at least want to do this in states that allow you to have sub accounts when bidding.
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