Tax Lien & Friends

Introduction
Tax Liens have been around for over a century.  It started in Europe.  They are great investments because of interest.  Some states have tax liens  Other states have investments similar to tax liens.  Tax liens are being bought by hedge funds, banks, and even foreigners!  They are good to have if you a diversified portfolio and for retirement.

Breakdown
Tax Lien: When someone is delinquent on their property taxes the county creates a tax lien certificate.  When an investor buys this certificate the county has more money in their budget.  The county uses this money for infrastructure, schools, police, firefighters, etc.  The person who owns the property that has the lien has a redemption period to pay off the property tax.  The redemption period could be anywhere from 4 months to 4 years. They would pay the amount of the taxes they owe and interest to the county.  The county would give this money to the investor.  If the property owner doesn't pay by the at end of the redemption period the property could be foreclosed.  If that happens the owner of the tax lien will be the first person that can purchase the property for pennies on the dollar.  This is called the first right of refusal.  The investor got to do some paperwork to get the property.  If they decide not to purchase it the county will sell it. Once they sell it they will give the investor the principal and the interest.  If you are new to tax liens, you should start off with a single-family residential property.  Do your due diligence on the property b4 you get a tax lien.  Stay away from swamps, deserts, and property in bad neighborhoods.

Tax Deed: A document the government creates when the property owner is delinquent on property taxes. The investor that purchases this document and gets the property.

Redeemable Deeds: It is a tax lien and tax deed mix together.

Conclusion
Tax lien and friends are amazing!  If you buy tax liens you are simply buying interest; with the potential to buy the property if you don't get your interest.  If you buy a tax deed you get the property.  If you buy a redeemable deed you will get interest or the property.

References
http://www.investopedia.com/terms/t/tax-deed.asp
http://taxlieninvestingtips.com/2010/07/27/what-is-a-redeemable-tax-deed/    
https://en.wikipedia.org/wiki/Tax_lien
http://www.investopedia.com/terms/t/taxlien.asp
Pro & Cons of Tax Lien Investing
Tax Lien Workshop
Tax Deed vs Tax Lien