3 Things that Can Extend the Life of Your Tax Lien’s Redemption Period

When you invest in a tax lien, you certainly hope that the time between the point at which you make the purchase and the time at which your investment pays off is as short as possible. However, if you do not check on the small details, you could end up waiting far longer than you want for your big payday. Here are three things that can extend the redemption period and keep you waiting for your payoff:

1. Homestead and agricultural exemptions
   These types of exemptions can extend the redemption period simply by virtue of having been filed on the property. Properties with this type of exemption often automatically have longer waiting periods to help the homeowner exhaust all options for paying. This does not mean that the deal is a bad one, but it does mean you could have more months to wait.

2. Owner bankruptcy
   If an owner files bankruptcy, this will not ultimately prevent you from either getting your money, fees and interest on the house or even from foreclosing. However, during the bankruptcy process, the property could remain tied up in court, keeping your hands tied as well.

3. Cloud on the title
   A property with a cloud on the title can be difficult to foreclose on. It can also be complicated if it is unclear, thanks to the cloud, who actually owes the debt. As with bankruptcy, this may not ultimately prevent you from getting your payback, but you could be waiting quite some time.

What are some “red flags” you look for when you are evaluating tax lien investing properties?

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