Last Updated on August 19, 2026
Estimated reading time: 6 minutes
Author: Jessa May Bautista
Reviewed by: Josh Blanchard
Fact Checked by: Jack Aldous
Investing in property tax sales can be a powerful way to build wealth. One of the trainers at Tax Lien School, Josh, explains how his team took US$3 million and turned it into US$7 million in real estate by buying tax‑deed properties at county auctions. This article summarizes the key points from the video and adds background information about tax‑deed investing.
Table of contents
What Is a Tax Lien?
A tax lien is a legal claim by a government agency on a person’s property or assets due to unpaid taxes. It protects the government’s financial interest and stops the owner from selling or refinancing the property until the debt, plus interest and fees, is fully paid.
What Is a Tax Deed?
A tax deed is a county legal document that gives the county title to a property when real estate taxes stay unpaid long enough. After that, the county sells the property to recover the unpaid taxes.
Key Takeaways
- Investing in tax deeds can increase wealth by purchasing cheap properties at auctions, as demonstrated by Josh’s experience turning $3 million into $7 million.
- Tax deeds transfer property ownership to the highest bidder at auctions, while tax liens allow investors to collect interest on overdue taxes.
- To succeed, focus on markets with high rents and low purchase prices, check auction frequencies, and understand state laws regarding tax deeds.
- New investors should start small, attend auctions to learn the process, and perform due diligence on properties before bidding.
- Tax deed investing requires careful market selection and persistence, with the potential for profitable returns over time.
Lessons from Investment Journey
We started buying properties in Houston, Texas, because the rents were high and the houses at tax-deed auctions were cheap. Over several months, we bought four to six properties a month. Eventually, we noticed that more people were trying to buy the same properties, so we looked for new places to invest. The main lessons were simple:
- Look for a market with high rents and low purchase prices. In Houston, we bought houses for just a few thousand dollars. After fixing them up, we rented them at good prices. This helped us make money fast.
- Choose places with regular auctions and plenty of inventory. We kept buying because the auctions ran often and there was enough stock to keep going.
- Understand redemption rules and penalties. In Georgia, buyers must wait a year to receive the title of a property, allowing the previous owner to reclaim it by paying the tax debt plus a 20% fee. In Texas, the waiting period is just six months, during which investors can use the property but don’t gain full ownership until the period ends. These rules affect potential profits and risks.
- Compare price ranges before you bid. Later, we found similar chances in Philadelphia. There, some tax-deed properties sold for only $5,000 to $10,000.
Choose the Right Tax‑Deed Market
How to Choose the Right Tax‑Deed Market
- Research state laws
Check if your state has tax liens, tax deeds, or redeemable deeds. Tax deeds give ownership to the highest bidder at an auction. Tax liens let you collect interest on unpaid taxes. In redeemable deed states, the old owner can get their property back for a while.
- Check auction frequency and inventory
Look for counties with monthly or quarterly tax-deed auctions. You can find auction dates and properties on county treasurer websites. Regular auctions with many properties help you grow your collection faster
- Compare rent levels and home prices
Search for places where rent is high compared to how much you pay to buy a house. Josh did well in Houston and Philadelphia. He could buy houses for just a few thousand dollars and rent them out for much more. In other places, houses cost a lot, making it harder to earn money
- Understand the redemption period and bidding method
Premium-bid auctions mean the highest bid wins. These need more money. Bid-down interest auctions, like the ones in Florida, help investors who will take lower interest rates. Longer wait times can tie up your cash but might lead to extra earnings
- Plan for repairs and holding costs
Many tax deed properties need fixing up. Add repair costs and property taxes to your budget. If you want to rent the property, think about property management fees too.
Example Markets
Below are the markets Josh discussed.
- Houston, Texas: High rent, low purchase price and frequent tax‑deed auctions. Texas is a redeemable‑deed state; the previous owner has six months to redeem the property. Investors can collect rent and manage the property during that time.
- Philadelphia, Pennsylvania: Monthly tax‑deed auctions with a large number of properties. Josh’s team has bought homes here for US$ 5,000–10,000 and installed tenants. Inventory may shrink as competition increases.
- Southern Florida: Monthly tax‑deed auctions but limited inventory. Mul
Houston shows high rents and a six-month redemption period, Philadelphia shows low purchase prices and monthly auctions, Florida shows bid-down interest, and Georgia shows a one-year redemption period with a 20% penalty.
tiple counties within short driving distance allow investors to attend several auctions. Florida uses a bid‑down interest method.Tips for New Investors
- Educate yourself. Learn what tax liens and tax deeds are. They are different things. Also, find out about redemption periods. You can take classes or watch free videos to help you understand these topics better.
- Start small. Begin with one or two properties to learn the process. Focus on lower‑priced properties that need minimal repairs.
- Attend auctions before you bid. Watch how bidding works. Talk to people who know a lot about buying and selling property. This will help to see how homes and buildings are usually sold and what costs come with them. Get tips on what makes a good deal. Learn how to avoid mistakes and get a better feel for the market.
- Perform due diligence. Take a look at the property if you can. Inspect for any damage and verify that there are no outstanding liens. Verify the zoning rules. Also, see if anyone lives there. If they do, know the eviction laws.
- Have a budget and an exit strategy. Decide whether you want to sell, rent, or keep the property. Think about how much it will cost to fix things, the taxes you need to pay, and any risks of losing the property. Don’t bid too high. You can make money by buying below the market price.
Frequently Asked Questions
A tax lien sale lets an investor collect money for unpaid taxes and interest. In a tax-deed sale, the highest bidder gets to own the property.
Check your county treasurer’s website for “tax-deed sales” or “tax sales.” Many counties share their auction schedules and lists of properties online. Some states have a calendar for all their auctions. This is a good way to find out what’s available
No. Some states sell tax liens, others sell tax deeds, and some offer both. Redeemable‑deed states let the former owner buy back the property within a set period
Many counties now run online auctions. You must register and place bids through a third‑party platform. Check local rules for payment methods and bidding deposits
Final Thoughts
Investing in tax deeds can be a good way to make money if you choose your markets carefully and don’t give up. Start by learning what tax liens and tax deeds are. Look for places where rents are high, prices are low, and there are lots of auctions. By going to auctions often and doing your research, you can slowly build a collection of properties that can grow over time.
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