This blog discusses some tax sale investment strategies, to help you decide where you should start to spend your time. There are essentially three categories of tax sale investors:
Long-term investors, interested in receiving high interest returns
Short-term investors that are looking to acquire tax sale property
Hybrid investors that do both
So what kind of investor are you?
This is largely determined by your that amount time and cash you have to invest in the process.
If you have very few hours in a week to invest in finding and buying tax sale properties, then being a long-term maybe your best option. You can start with as little as $50, but be realistic. You’re not going to become rich overnight on $50.
On the hand, if you have time to find and analyzing tax sale properties, a short-term strategy of acquiring tax sale properties for larger returns would be your better option. You will need to have a reliable source of capital for this strategy. This could be your own funds or funds from other sources
In many instances, there are many that see the opportunity in the long and short term and want to do both. This path requires a commitment of time and money.
These are some questions to help you make you decide the type of tax sale investor you could become:
- How much money have you set aside to invest for either strategy?
- Where is that money located? Savings, Checking, 401k, IRA?
- Do you have an IRA or 401k that you’re willing to use for this?
- Will you need access to these funds in the next 24 months?
- How much time can you dedicate each week to this strategy?
- Are you willing and able to travel regularly if necessary? How often? Weekly? Monthly? Quarterly?
The answers to those questions largely determine what investing profile you are. Here are several tax sale investor profiles for you to consider: