November 22, 2019

How to Cut Through Earnings-Claims Garbage to Get the Truth About Tax-Lien Investing

One of the best things about investing in tax liens and tax deeds is the potential for dramatically improving and increasing your income.

However, many of the so-called “pros” who teach on this topic use deceptively worded advertising to attract real estate investors’ attention. You must cut through the earnings-claims “garbage” to get to the truth about the incredible potential in this real estate investing strategy.

One of the biggest reasons real estate investors find tax liens and tax deed certificates attractive is that you can literally acquire properties for pennies on the dollar when the strategy is implemented correctly.

However, that attractive phrase, “pennies on the dollar” comes with a big caveat a lot of investors miss: You have to do your homework! Not every tax lien or tax deed certificate is a good deal. In fact, many investors overpay at auction by serious margins, which ultimately impacts their ability to succeed in this space.

That is where many consumer advocates take issue with a lot of “educators” promoting their trainings for this type of real estate investing.

If an ad reads, “Safely secure a consistent, predictable monthly cash flow of up to an extra $8,000 or more,” for example (this is a real ad currently targeted by several consumer advocacy lawyers), then technically the advertiser has not told you a lie if they are talking about investing in tax liens.

Using the right strategies for acquiring tax liens or tax deeds, going through the redemption and foreclosure process, then leveraging your new portfolios and/or capital into other investment strategies, you absolutely can generate this much extra monthly cash flow or more. Furthermore, the advertiser has said you could earn “up to” that amount of $8,000; they did not promise you would do so. However, the implication is still that with this training that probably hinges just on acquiring tax liens or tax deeds and does not even deal with what to do with them, you will be able to generate that extremely attractive monthly income.

The truth, I’m sad to say, is that you need a lot more information and education if you want to create that income as monthly cash flow.

Furthermore, if you want to do it just by acquiring tax liens and tax deeds, you are going to need a serious team to support those efforts. Our investors usually opt to employ several diverse strategies in their tax lien and tax deed investing in order to generate cash flow and capital from multiple sources, and that probably would not be possible for most people unless they are working with a larger group like ours. An individual investor simply would not have the bandwidth to pull it off.

Before you sink thousands of dollars into trainings that will leave you still lacking the knowledge you need to really generate any income close to the “garbage” claims a lot of trainers are making, take the time to review the free education on reputable websites.

Investors who are truly active in this space often provide the education for free because they know you need to understand the strategy in order to know if investing in tax liens, tax deeds, or some combination of tactics is right for you.

Regardless of what you decide, make sure you have all the information and all the clarity you can get on a real estate investing method before you buy more education on that topic.

It may be you could invest that educational capital into your first asset instead!

Why We Love “Tenants, Trash & Toilets” with Our Tax Liens

About the author 

Charles Sells

Charles Sells is the founder and CEO of The PIP Group, a turnkey service provider that focuses on investments in distressed real estate assets including tax liens, tax deeds, traditional foreclosures, fix-and-flips and long-term cash flow acquisitions. He has been involved in tax lien investing for over 20 years, during which time The PIP Group has grown to become one of the largest agencies of its kind with nearly 1,000 individual and institutional investors worldwide.

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