Buying Investment Property – How to Buy Government Tax Lien Property

If you want to buy an investment property, first look at what the government may be selling. Over the years, I have purchased over 100 investment properties and my best investments were the result of knowing how to buy government tax lien property. By government, I mean not just the federal government, but also city, county, and state governments.

I started buying investment properties at a very good time. It was 1993, and our country was in the midst of digesting the excess of foreclosed properties that preceded the rescue of savings and loans. A government agency called the Resolution Trust Corporation (RTC) was absorbing and reselling the delinquent mortgages and foreclosed properties that were sinking so many savings and loan banks.

I was lucky to be young and opportunistic at the time. I bought investment properties at RTC absolute auctions. An absolute auction is where the seller orders that they want the property to be sold to the highest bidder, regardless of price. I also bought investment properties indirectly from large RTCs. Some large buyer, such as GE Capital, bought large portions of RTC’s portfolio and then also sold properties at very low cost.

Local governments also have great real estate deals. Pay attention to the tax sales that take place each year. City and county governments can also directly auction the property. A lucrative method of purchasing investment property is to purchase expropriated city property. Find out when they are handing over the property to new buyers and invest! Look carefully, sometimes government sales can also be hidden on regular channels, such as multiple listing service. Pay attention to all avenues when looking for bargains.

The bottom line is: when the government is selling, line up to buy!