Last Updated on September 8, 2025
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I always hear the same questions about tax liens, tax deeds, and real estate:
“Dustin, where should I start with real estate investing?”
“I’ve heard wholesaling is the best form of real estate… Do you agree?”
“Those Fix-and-Flip reality shows look fun. Should I start there?”
Here’s my answer to all of these questions:
It depends on your goals, but Tax Liens & Deeds are a game-changer, and here’s why.
Tax Liens & Deeds vs. Traditional Real Estate Investing
Unsure whether to jump into wholesaling, fix‑and‑flip projects or another real‑estate strategy? In my recent video, I explain why investing in tax liens and tax deeds can be a surprisingly simple way to start.
Why Choose Tax Liens & Tax Deeds
Traditional strategies can be profitable, but they often require more capital, more work and greater risk. Owning a rental or flipping a house is lucrative yet demands significant time and money. Tax‑lien certificates and tax‑deed sales operate differently. When you purchase unpaid taxes from a local government, you earn interest while the owner redeems the lien or eventually takes ownership of the property. Here are the main reasons many investors, including my students and me, prefer tax sales:
- Lower costs: You can participate in Tax Liens & deeds auctions with just a few hundred dollars. Returns can be attractive — some states pay 2 % per month or up to 18 % per year.
- Simplicity: Tax‑lien investing requires no contractors, renovations or property management. You buy the lien, wait during the redemption period and collect interest or acquire the deed.
- Government backing: Tax lien certificates are issued by local governments and backed by the underlying property. That legal framework makes them more secure than many private investments.
Tax Sales vs. Other Real Estate Strategies
The following table compares tax liens and deeds to two common approaches: fixing and flipping houses and buying rentals. The phrases are short; read the text for details.
| Strategy | Typical Initial Cost | Risk Level | Complexity | Time Horizon |
| Tax lien certificate | Hundreds to a few thousand dollars | Low–medium; backed by property and fixed interest | Simple; no repairs needed | Medium: property may need work |
| Tax deed sale | Buy property for back taxes | Medium: The property may need work | Moderate; due diligence required | Varies; depends on resale or rehab |
| Fix‑and‑flip | Tens of thousands plus rehab costs | High; profits rely on renovation and market timing | High; requires contractors and project management | Medium: rental income and values fluctuate |
| Buy‑and‑hold rental | 20 % down payment or more | Medium; rental income and values fluctuate | Medium; needs ongoing management | Long term (years) |
How to Get Started With Tax Liens & Tax Deeds
- Check state laws:
Only certain states sell tax lien certificates. Contact your county tax collector or treasurer to learn whether auctions are available.
- Do your research:
Examine each property’s condition and look for other liens before bidding. A property with multiple liens may be a poor investment.
- Attend the auction:
Set a budget, bid on liens or deeds and pay the taxes owed. You’ll then hold the certificate until the owner redeems it. If they fail to pay, you may initiate foreclosure and take ownership.
Risks and Considerations in Tax Liens & Tax Deeds
Tax lien investing is not risk‑free. You might have to wait several years for the redemption period to end. If the owner doesn’t pay, you could end up with a property that needs repairs or has environmental issues. Some states don’t allow tax lien sales. Always decide how much of your portfolio you can commit and be prepared to do your homework.
Frequently Asked Questions
A tax lien certificate is a legal claim sold by a local government when property taxes go unpaid. Investors pay the back taxes and earn the right to collect the debt plus interest.
A tax deed gives the buyer ownership of the property, whereas a tax lien only entitles the investor to collect unpaid taxes.
Tax liens are backed by the property and follow a set legal process, while flipping houses requires more capital and carries the risk of renovation delays and market shifts.
Many tax liens can be purchased for just a few hundred dollars, but you should have extra funds for research and potential legal costs if you must foreclose.
Redemption periods generally last one to three years. If the owner pays within that period, you collect principal plus interest; otherwise, you may acquire the property.
Conclusion
For many investors, tax liens and deeds provide a low‑cost, lower‑risk way to get started in real estate. Traditional strategies like fixing and flipping can offer big profits but require more cash and work. By focusing on tax sales, you can build experience without taking on a full renovation project. The best time to start investing was 20 years ago; the second-best time is today!
Take Action Today
See you in the video,
-Dustin
PS: This is a secret way to fast track your success with tax liens & deeds.. You’ll want to watch this VIDEO ASAP
