Short YouTube video by Mark J. Podolsky (The Land Geek) discussing tax-lien investing. He outlines typical returns (he cites roughly 2–24% depending on county and competition), then lists five main risks that make him avoid tax-lien investing: 1) you may be forced to foreclose and end up owning an unwanted property, 2) code enforcement/municipal fines, 3) government errors in lien records, 4) legislative or court changes that can void liens, and 5) lien-holder bankruptcy. He prefers directly owning land or using strategies (cash flips, owner-finance) that can yield larger returns and promotes resources on his website.
Chapters
Foreign. Hey, it's Mark Podolski, the land geek with the landgeek.com. let's have a virtual cup of coffee together. So I'm drinking my, my bulletproof coffee here. Anyways, I want to talk about tax lien and investing. Tax lien investing is a phenomenal strategy, phenomenal strategy to make a higher return on your investment and invest in real estate without all the headaches of, you know, renters, rehabs, renovations, and rodents. And you can make, on average, let's say, between 2 to 24% on your money, depending on the county and the competition. Right. So tax lien investing is great. And if you Google tax lien investing, you can find all this information on it. However, why don't I invest in tax lien investing and what are the risks associated with it? Well, number one, I like to actually own the property. Right. 95% of tax liens on homes get redeemed. But I'm a land guy and I actually want to own the land. So in the due diligence part, right, Right. If you buy a tax lien, let's say at 18% in Florida, fantastic. But then you find out that it's a piece of raw land that the owner has no, no inclination of ever paying off that, the taxes. And therefore, you're not going to make your 18%. What you know you're going to have there is a foreclosure. Now, you could have avoided that whole thing if you wanted that property and just bought that property straight from the owner. Correct. If you wanted it. But now you've got this tax lien and you're gonna have to go through the foreclosure process if you didn't really want that underlying asset. So number one in tax lien investing is you have to ask yourself, do I even want this underlying asset if worst case scenario is I have to foreclose and own it and pay the taxes and the insurance and the maintenance on this home or on this land or whatever it is. Right. So that's, number one you got to look out for. Number two are code enforcements. Right. Do you have to mow the lawn? You know, municipal fines, these things are terrible. And, you know, you'll find that, you know, these building code enforcement things on that tax lien you're responsible for, it's a terrible, terrible risk. Can really destroy your returns. Number three, government errors. Right. This happens all the time. And you know, you find out that that tax lien, you can't even, you're not even the right owner of it. Right? So again, the due diligence aspect in tax liens are so important. Number four is legislative and court rulings, right? Changes are made to tax law quite often depending on the tax on the state of the municipality. All it takes is one news story about an elderly couple the street by an aggressive and unscrupulous tax lien investor and the law changes and puts your tax lien in jeopardy. This can happen. It happens a lot. And then the last one is when your tax lien owner files for bankruptcy. Right? So I don't like tax lien investing because I'd rather make 300% to 1000% on a cash flip or donate owner terms. Actually owning the land, you do a little bit more work. You do a little bit more work because you have to market the property and sell it. But it's not that difficult. You still have to do the exact same due diligence to own the property to make 300% than you would on the tax lien to make, let's say 16%. 300%. 16%. 300%. 16%. Have to do a little bit more marketing. And in my program we teach you all about marketing. So if you want to learn more, go to thelandgeek.com you can download for free our passive income blueprint, you can get our ebook how to Avoid the three Fatal Land Buy Mistakes. And you can get the best passive income model podcast delivered each week to your email inbox. And we talk to experts from all parts of business and real estate all the time. It's great. So thanks for having a virtual cup coffee with me. I hope you'll think twice now before you, you know, get real deep into tax lien investing. Thanks a lot and I'll see you later. It's.
