In a tax sale of delinquent properties in which the homeowner has failed to pay its property taxes, there are cases wherein the county takes a different action than selling a lien. What they do is sell the property at a tax deed sale. It is because tax deed is also a very profitable investment. This is true especially in tax deed states where properties are sold in order to acquire back taxes. In fact, investors who join the sale have the opportunity to buy real estate at less the market value.
Furthermore, there are counties that sell redeemable tax deeds, in which the property’s deed is put up for sale to the public. But there is a redemption period given to the homeowner, for him to redeem his property by paying the tax debt. In that case, the homeowner must pay the investor the interest or penalty, which can be quite high. This makes it a fruitful experience for the investor.