Transcript:

Hey there, it’s Casey Denman from TaxSaleAcademy.com and welcome to our weekly question segment. This week’s question comes to us from Corey.

Alright, um, Kell wants to know . . .

Deeds or liens, which one can I make more money with?

So, I’m sure you know this Kell, but for those watching you don’t, when you invest in a tax lien you’re buying a priorirty lien against a property in exchange for paying the taxes on that property. This liens earns interest on your money which is what happens the large majority of the time, but if it’s not redeemed within a window of time usually 2-3 years, then you can foreclose the lien and become the owner of the property.

When you invest in a tax deed you are buying the auctual property as a result of tax foreclosure.

So, which can you make more money with?

The answer here is going to be tax deed, when done correctly.

I always tell everyone that you must think about how you actually receive your returns. With a tax lien, you’ll walk to the mailbox one day, you’ll get your money back plus a nice interest rate, maybe 15 or 20%.

With a tax deed, you’ll make money after you have become the owner of the property, marketed that property and then sold that property. All things equal, you’ll make more money with deeds.

I usually say that liens will require significantly less effort and will produce lower returns – you buy it and check the mail to get your return. Deeds will require much more effort but will produce higher returns – you must maintain, maybe remodel, then market and sell the property to get your return.

Ideally, you should be investing in both at some point in your career.

Kell, I hope this answers your question. If you have a followup or if anyone watching this video has a question, please feel free to leave it below this video or any of our other videos right here on YouTube.

Thanks so much for watching. And as always, check out TaxSaleAcademy.com to grab a copy of your free book or if you’d like to take advantage of the most detailed and step by step training we offer thorugh The Tax Sale academy. See ya next time!