We have all heard about obtaining real estate for pennies on the dollar, yet nobody explains how this is possible. They promise to tell you if you buy their "education package" for hundreds or sometimes thousands of dollars. Tax certificates also called tax lien certificates are county liens on properties. Tax deeds are actual deeds (ownership) without any warranties. There is a process called "quiet the title" which can convert a tax deed into a warranty deed.

I have read the books, bought the packages, however I really learned the most through my experience dealing with the counties and attending the auctions. I am going to share some information with you to help you get started on the right foot and avoid a few easy pitfalls. You should always perform your due diligence before purchasing any type of investment.

When doing your search, keep in mind that you may be obtaining this property so you need to avoid tax certificates that are backed with worthless properties. For example, lots that are 5 feet long and 300 feet wide. Properties that are underwater, properties that are in litigation or bankruptcy. It is best to seek marketable properties that would be desirable. Growing counties or properties in a community are good examples.

The best part is that you need little money to get started, so no need to acquire a loan. As far as risk is concerned, it is considered very low. Your money is secured by real estate and earns high interest as well. Buying tax certificates can accomplish 2 things.

1. It enables for you to get properties for pennies on the dollar and

2. It enables you to earn high interest yields that are secured with real estate.

Tax certificates have been issued by the government for more that 150 years and are a secure form of investing. Counties issue tax certificates on delinquent properties to keep the county funded when property owners do not pay their taxes. Investors pay the property tax for the delinquent owner and in return the investor gets a first lien on the property.

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