Your Tax Lien & Deed Questions Answered Part 1

Last Updated on September 8, 2025

Investing in property tax liens and tax deeds can be rewarding, but the rules differ by state and many beginners are unsure where to begin. In a recent Q&A call we answered dozens of reader questions about redemption periods, research methods and auction strategies. This article summarises those answers so you don’t have to watch the whole video. For a broader overview of this topic, see our guide on picking properties for tax deed sales (internal link) and our discussion of the #1 trait you need to make tax liens & deeds work (internal link). Always remember that tax lien and deed laws are complex; consult your county or a lawyer before investing.

When do you gain access to a deed property?

In many deed states, such as Minnesota, you receive legal control of the property immediately after the sale. The county treasurer records a Collector’s Deed and you become the new owner. There is no waiting period for the former owner to redeem. Still, you should call the county to confirm the redemption period because homestead or agricultural properties may have different rules.

Key points:
• Deed buyers get possession right away in most deed states.
• Confirm local regulations, as redemption laws vary.
• Obtain title insurance and liability coverage immediately after purchase to protect yourself.

Where can you find over‑the‑counter tax deed properties?

An over‑the‑counter sale occurs when properties are left over after an auction. Counties often sell these without competitive bidding, but lists change quickly. There is no central database; your best option is to contact the tax collector or treasurer in each county and ask if they have unsold properties. Some counties post lists online, but others require a phone call. Start with counties near you so you can inspect the properties in person.

How do you research a property’s location without a street address?

A few investors asked about tools for translating latitude and longitude into a physical address. Many counties now provide interactive GIS maps. You can also enter the coordinates into Google Maps to see the parcel. If you still can’t locate it, ask the county mapping department for help; they can usually provide a parcel map.

How does interest work in Arizona tax lien sales?

In states such as Arizona you earn interest on the amount you actually bid at auction, not the original lien amount. If the winning bid for a $40 lien is $250, interest accrues on $250. If the property owner fails to pay future taxes, additional liens will be sold. To protect your position you should buy subsequent liens; otherwise you may have to pay off later lien holders before you can foreclose. You cannot pay taxes in advance, but you can pay off junior lien holders at any time to consolidate your position.

How can you buy liens or deeds after the auction?

Over‑the‑counter liens and deeds are handled differently in each jurisdiction. In many places you must appear at the tax collector’s office with certified funds and request the unsold items. Counties may call these “leftover” or “surplus” properties rather than “over‑the‑counter,” so be specific when you ask. For redeemable deed states like Texas, over‑the‑counter deeds are rare because most properties sell at auction.

How often do auctions occur?

Auction schedules vary widely. Some counties hold a single sale each year; others conduct quarterly or monthly auctions. For example, many Texas counties hold sheriff’s sales on the first Tuesday of every month. Smaller counties may only auction once a year. Always check the county website or call the treasurer’s office for a current schedule.

How much money do you need and which states are best?

There is no universal budget. New investors often start with small liens under $1 000 or vacant lots costing a few thousand dollars. States such as Arizona, Florida and Illinois offer competitive lien sales with statutory interest rates. Texas and Georgia are known for redeemable deeds, which can yield high returns in six months, but they require cash on auction day. Use our state directory map (internal link) to see which states are lien states, deed states or hybrids.

Are there environmental or title concerns when buying unusual properties?

A question about buying a gas station raised concerns about possible environmental liabilities. Environmental issues can be costly, especially with underground tanks. However, deep discounts can offset the risk. For instance, one investor obtained a car‑wash and gas‑station property valued around $800 000 for about $6 000 in unpaid taxes. Even after legal and environmental costs the return can be significant. Always perform due diligence: check for hazardous‑material records, consult the state environmental agency and include potential remediation costs in your bid.

Will I get the highest interest rate at a lien sale?

Interest rates are set by state law, but competition can drive rates down. In large cities there are many bidders; liens may sell at very low rates. If you want higher yields, look at smaller counties where there is less competition. Hybrid states like Georgia offer a fixed penalty (often 20–25 %) instead of an interest rate, which can be attractive.

What if I missed the sale—can I still buy in Washington?

Washington is one of several states that conduct tax deed auctions online through services like Bid4Assets. You can call the county treasurer at any time to ask about leftover properties. If you mention “over‑the‑counter” they may not understand; instead ask whether there are any properties that did not sell at the recent auction and if you can purchase them.

How can I inspect a property before bidding?

There is no official inspector. If a house is occupied, you can knock on the door and ask questions. For vacant properties you can look from the street or through windows. Some investors hire local contractors or real‑estate agents to take photos and assess condition. Never enter a property without permission. For long‑distance research, hire a local person on a gig‑work site and give them a checklist (foundation, roof, occupancy, neighbourhood).

What happens after you buy a deed?

Once the deed is recorded, you are responsible for taxes, insurance and maintenance immediately. Change the locks, secure the property and obtain liability insurance. If the property is land, maintenance is minimal. For houses, consider boarding up windows or renting it out. Some states allow a former owner to redeem within a set period (e.g., two years for homesteads in Texas), so keep funds available until the redemption window closes.

How do you conduct due diligence on liens and deeds?

A proper due‑diligence process saves you from costly mistakes. A typical workflow includes:

• Get the sale list. Obtain the county’s parcel list from the treasurer or local newspaper.
  
• Screen values. Compare assessed values with market prices using websites like Zillow or county appraisers.
  
• Check the title. Search county records for mortgages, liens or IRS claims. Many courthouses provide terminals; staff can show you how to search.
  
• Inspect the property. Visit in person or hire someone to photograph and report on condition and neighbourhood.
  
• Budget for fees. Title searches cost around $40–$80, and clearing title through services like tax‑title agencies can cost about $2 000.
  
• Factor in redemption. Understand how long the owner can redeem and what return you’ll earn.
  
• Have an exit plan. Decide whether you will hold the lien for interest, foreclose and flip the property, or rent it out.
  

Because tax lien foreclosures involve complex rules and strict deadlines, missing a step can cause legal problems. If you are unsure, speak with a real‑estate attorney.

Can I use a self‑directed IRA to buy liens and deeds?

Yes. Many investors use self‑directed retirement accounts to invest in liens or deeds, but there are strict IRS rules. The property must be held in the IRA’s name, and all expenses and profits flow through the account. Consult a tax professional or custodian to set up the structure correctly.

Does a homestead exemption stay after purchase?

In some states, properties classified as homesteads or agricultural land have longer redemption periods. For example, certain Texas properties offer a two‑year redemption period for former owners, whereas other properties may only have six months. Check the local tax code to see whether a homestead exemption applies and how it affects your timeline.

Should you bid on a property with a low starting amount?

A low opening bid does not always mean a good deal. Evaluate the property’s value and potential issues. If a house is worth $110 000 and the lien starts at $1 500, the upside may justify the risk. However, if it is a derelict structure or has environmental problems, you could end up paying property taxes on something you cannot sell. Tax liens are typically longer‑term investments, with redemption periods lasting one to three years. For quicker returns, some investors focus on small vacant lots or redeemable deeds with shorter redemption periods.

Can I buy tax deeds online in Texas?

Most Texas counties still hold in‑person auctions. Some counties post lists or bidding instructions online, but you usually must attend in person with certified funds. Homestead properties have a two‑year redemption period, so many investors avoid them in favour of non‑homestead properties that can be flipped or rented sooner.

Do we work with divorce attorneys?

We have not purchased any properties through divorce‑related foreclosures. This is a specialised area that often involves family‑court proceedings. If you’re interested, ask a local attorney who handles divorce cases whether there are opportunities.

Call to Action & Free Resources

Would you like help buying your first tax deed property at up to 90 % off within the next 30 days? Our team offers a free discovery call to walk you through your first deal. You can also download our mini course and access our auction calendar for free. Start by visiting our free resources page to learn more.