Understanding the Tax Lien/Tax Deed Process

What is a Tax Lien?

A tax lien is a lien imposed by law upon a property to secure the payment of taxes. A tax lien may be imposed for delinquent taxes owed on real property or personal property, or as a result of failure to pay personal income taxes or other taxes.

These tax liens are then purchased from the appropriate government agency. If the homeowner does not pay the property taxes, including the interest, by a certain deadline to the tax lien certificate holder, then the property goes to the holder of the deed. This process creates a unique opportunity to invest in distressed properties for profit.


Don’t feel you are obligated to pay your taxes? What do you think the government can do about it?

They can place a tax lien on your property and either sell that lien to investors in a public auction or collect the interest themselves. If you have a property tax lien assessed, you are required to pay the cost of your taxes plus 5% to 50% in interest. You will be allowed a certain amount of time to settle the debt, or “redeem” the lien. Failure to do so will result in the foreclosure of your property and the lien holder can take full possession of your property. It is all mandated by government statute.


But why?

To have a reliable and predictable source of revenue, local governments sell unpaid property tax liens and tax deeds to private investors. The lien against a delinquent taxpayer’s property accrues interest of 5% to 50% each year until the taxes have been satisfied (the exact amount varies from state to state).


What happens next?

If the taxes and accrued interest are not paid within a specific period of time (set by the local government) the lien may be foreclosed and the property sold by the holder at full market price. Certificates are issued for each lien. The certificates are recorded in the local government property records and provide all the information regarding the details of the lien.


What information do the certificates have?

Tax lien certificates provide the address, legal description and current owner of the property, as well as the rate of interest and the amount of time the owner has before the property may be foreclosed on by the certificate holder (investor). Government tax liens are superior to all other liens attached to property, including first mortgages.

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The Tax Lien Process

Local government collects real estate taxes from all property owners to pay for schools, roads, hospitals, etc.

The county “sells” delinquent taxes to investors, usually at auction – a tax lien is created.

The delinquent property owner has a set time (determined by local law) to repay the debt, plus all interest and penalties, OR forfeit the rights to the property.

There’s More to it, Though…

Each state and each county within the state has different laws, policies, and procedures. These can change frequently. Therefore, the purchase and management of investments in this field can seem overwhelming to most novice investors of tax liens and tax deeds.

Investments in tax liens and tax deeds require extensive knowledge and experience, as well as extensive continuous research of the field. The PIP Group has the knowledge and experience after many years of purchasing and managing these types of investments. Whether in a strong or weak market, The PIP Group has consistently earned its clients strong returns.

Our strategy is focused on obtaining the highest possible return for you. In tax lien investing, we focus on the highest-interest-yield tax liens, the highest amount of equity to secure the lien, and a high-yield compounding effect through reinvestment of redemption proceeds in more tax liens.

In tax deed investing, we focus on a combination of both: the highest interest yield (when applicable) and the highest equity profit upon purchase of the tax deed.

Finally, we are the only agency with a fee structure, designed to ensure YOUR success. Explore all the advantages The PIP Group has to offer!

Safety and Consistency

Recognized as an IRA Qualified Investment

Tax lien and tax deed investments are conducted by your county government

Investments are made in your name

Percentage is mandated and enforced by government

Percentage will not fluctuate, due to declining economy

Secured PURCHASE rates by The PIP Group can be up to 36% (gross rates annualized)


Super liens are a category of lien that, pursuant to state statute, are given a higher priority than all other types of liens – such as first mortgages.


  • Percentage is mandated and enforced by government
  • Percentage will not fluctuate, due to declining economy
  • Secured rates by The PIP Group are currently 8% -50% (net to client)
  • If you are able to foreclose, returns are endless


  • Investments are made in your name
  • Investments are conducted by your county government
  • Liens are secured w/priority status against the property (even 1st mortgages)
  • Recognized as an IRA Qualified Investment

PLUS (You Give)

  • Delinquent  taxpayer additional time to pay  taxes
  • County budget the investments they need for schools, etc.
  • Yourself and your neighbors cheaper property taxes, because the county has the funds to afford its budget


  • Maximum bids are 18% penalty on the tax lien amount for each 6 months
  • Up to 3-year Right of Redemption

  • Set penalty of 20% from date of purchase
  • 1-year Right of Redemption

  • 3% per 3 months from date of purchase
  • 1-year Right of Redemption

  • 25% redemption/penalty if redeemed in 6 months or less (non-homestead and non-agricultural property)
  • 50% redemption/penalty if redeemed in 24 months or less (homestead and agricultural property)

Get started with The PIP Group and learn how to become a smarter investor and how to generate passive monthly income by investing in tax liens and distressed real estate properties.