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Tax Lien Investing requires non-liquid funds!
Tax Lien Study | June 6, 2007 2:52 PM
Tax Lien Investing requires non-liquid funds meaning that once invested it cannot be withdrawn for some period of time. When these funds become available again is up to the property owner.
Meaning that you need to put aside some cash before you start, cash that you won't use for anything else except buying tax lien certificates.
This is because how tax sales works ... As a taxbuyer you purchase a tax lien certificate, you pay the amount required by county, you're issued a certificate of purchase ... and now you wait for the owner to redeem the sale. In IL, the property owner has a 2 to 2 ½ year redemption period, depending on property classification. So your money can be stuck for up to 2.5 years until redeemed. But the wait can be worth it... unless, of course, you purchased tax certificate at the 0% bid and the lien was redeemed within 6 months - then you get your cash hosed up for 6 months without making a penny on it.