August 29th is currently the scheduled date for the MS Tax Lien fall auctions. I purchased three last year and I have only received funds from one of them so far. I talk about buying tax liens in my ebook Trials and Tribulations of a Rookie Real Estate Investor.
I’m going to breakdown how much money I actually earned on the one I received recently.
- The delinquent amount on the property was listed at $319.38.
- I overbid $25.00 which means I paid $344.38.
- The owner had accrued $57.49 in interest.
- I received a check for $376.87 less than a year later.
- $376.87 – $344.38 = 32.49.
- I made a profit on one tax lien of $32.49.
- That is a little over 9% interest I earned.
YOU CANNOT GET A RETURN LIKE THAT WITH A REGULAR SAVINGS ACCOUNT!
This year I have a better strategy. I wrote a 9 step checklist for myself to follow starting from reviewing my past purchased tax liens to placing pre-bids. It’s a similar checklist I have written about in previous blog posts. The checklist is in a specific order because there are things I have to do before pre-bidding starts. In 2020, I lost money and I wrote about in Another Tax Lien Redeemed and A Lesson Learned blog post.
In order to avoid this moving forward, I will stick to bidding 15% or less.