Some old family friends have done very well acquiring properties via purchase of tax lien certificates, but I’ve never paid attention and probably should have. So, if the individual currently holding title pays you for the lien plus interest within the three years, all you get is the interest, correct? If not, then what, you have to foreclose?
That is correct. They can redeem by paying me all taxes plus 12%. At the end of three years I turn in the tax certificate and get the title, but I’m sure I will have to get a lawyer for that. There are some people who do this as an investment hoping the owners redeem. Where else can you get a 12% return? The interest rate is different for each state, though.