Tax lien update
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Back in February, I purchased 3 tax liens. Two of them have been redeemed already. The first one was redeemed early on (in March) so I actually lost about $4 on that due to the interest earned not yet making up the cost of the purchasing fee ($10). The second one was redeemed in late May, resulting in a gain of $7 (after fees). This comes out to just under 1%. Clearly I could have done better by just letting the money sit in my HSBC or ING account. I still have one more lien out there. It’s the largest one, so we’ll see how long it goes before being redeemed. Lessons learned so far? Buy larger liens to more easily offset the flat fee. This type of investment is exciting to me, which means that it’s probably a lot like gambling. I don’t want to do a lot of gambling, although a teeny-tiny bit is fun. I’ll stick to mainly boring investments.
June 7th, 2007 at 6:46 am
Wow, I never thought that you could lose money because a tax lien was redeemed early. I only considered the risk if it was never paid back, and you end up with an undesirable piece of real estate. As far as I know tax liens are not available where I live in California. For you, did you personally go to the auction? And, is it only held once a year?
June 7th, 2007 at 4:04 pm
Well, it was a very small loss. The auction I bought from was an internet-only auction that is held each February. (For Maricopa County, Arizona.)