TLC: tender loving care with tax lien certificates

Tax lien certificates:

Tax lien certificates are issued immediately upon the failure of the property owner to pay. These forms describe a lien on the property. The liens are generally in first position over every other encumbrance on the property, including liens secured by loans against the property.

Tax lien states are Alabama, Arizona, Arkansas Colorado, Florida, Illinois, Indiana, Iowa, Kentucky, Maryland, Mississippi, Missouri, Montana, Nebraska, New Jersey, North Dakota, Ohio, Oklahoma, Oregon, South Carolina, South Dakota, Vermont, West Virginia, and Wyoming. The District of Columbia is also a tax lien jurisdiction.

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Tax lien investing:

Tax liens and tax deeds can be purchased by an individual investor.

In the case of tax liens, interest can be earned. If the property is redeemed then the investor would recover invested money, plus interest due after the lien was purchased. If the property is not redeemed, the deed holder or lien holder has first position to own the property after any other taxes or fees are due.