Here’s the part most investors completely ignore until it’s too late: every single lien you buy already needs an exit strategy the moment you click “bid.” Without one, you’re just collecting expensive paper.
Let’s make this simple. There are really only three endgames in tax lien investing. Pick yours now (you can have a primary and a backup, but never “all of the above”).
Exit #1 – The Passive Income Machine
Goal: Live off the interest checks.
Best for: Anyone who wants true “mailbox money.”
How: Target counties with 80–95 % redemption rates and statutory rates 12–18 %.
Exit move: Do absolutely nothing except wait for the county treasurer to mail you principal + interest. Reinvest 100 % of redemptions into the next auction.
Illustrated Example: My friend Karen started with $40k in 2016. She’s never foreclosed once. Today her portfolio has redeemed ~$48k per year in interest while she travels full-time.
Exit #2 – The Discounted Deed Collector
Goal: Own real estate for pennies on the dollar.
Best for: People who eventually want rentals or big resale profits.
How: Bid in counties with lower redemption rates.
Exit move: When the redemption clock hits zero, foreclose, clean title, then rent, seller-finance, or flip.
Illustrated Example: Mark in Illinois turned $90k of liens into 18 free-and-clear rentals worth a total of $4.2 M over eight years.
Exit #3 – The Capital Recycler (Fast Flip)
Goal: Compound money quickly without ever touching a property.
How: Buy liens, wait 6–18 months, then sell the unredeemed certificate on the secondary market (or assign before foreclosure).
Exit move: Pocket 8–25 % profit and immediately redeploy capital.
Illustrated Example: Sarah in Mississippi flips $10k of liens every 9–14 months and has doubled her investable cash three times for 5 years
Your 5-Minute Exercise Right Now
Grab a sticky note and write:
“My primary exit is __________. My backup plan is __________.”
Stick it on your monitor. Every future bid must serve at least one of those two exits.
No more random bidding. From today forward, every lien has a job. Every lien needs an endgame. Know when and how to make your move.
This blog is for informational purposes only and should not be relied upon as financial or investment advice. Real estate investing carries risks, and individual results will vary. Always consult with your team of professionals before making investment decisions. The authors and distributors of this material are not liable for any losses or damages that may occur as a result of relying on this information.
