Last Updated on August 25, 2025
Table of contents
What Are the Risks of Tax Lien and Deed Investing?
The risks of tax deed investing include not understanding local laws, skipping due diligence, underestimating costs, and losing focus. To avoid these pitfalls:
- Know your state’s rules: Redemption periods vary widely—Florida requires at least two years before a tax deed can be issued, while Texas gives homestead and agricultural properties two years, but only six months for most others
- Do thorough research: Inspect each property, run title searches and check for other liens.
- Budget for hidden costs: Legal fees, subsequent taxes and property upkeep can erode returns.
- Commit to a routine: Set clear goals, track deadlines and remain consistent even during slow seasons.
Why Knowing These Obstacles Matters?
Tax liens and deeds are often shared as cheap ways to buy property or earn high interest. But if you are not prepared, there are big risks. Mistakes like not knowing the redemption period in your state or not understanding the difference between a lien state and a deed state can cause legal problems and financial loss.
New investors might also end up buying land or houses with little value, or they might miss tax deadlines. The best way to avoid these problems is to stay disciplined, do legal research, study each property carefully, and take responsibility. This helps you stay safe while continuing to find good deals.
Most businesses, people, and organizations are trying to slow down and prepare for a fast roll as the new year approaches. But how can you afford to slow down when you are in your status quo right now?
Let me share with you some tips on how to keep the ball rolling.
- STEP 1: STAY FOCUSED ON YOUR GOAL
Keep seeing yourself where you want to be, and keep taking steps that push you closer to that goal. Make sure that you are still fully convinced of what you are doing, and you are still willing to do it.
- STEP 2: ACKNOWLEDGE LITTLE SUCCESS EVERY DAY
Even if it’s just a little or simple step that you are doing every day… that already has a big impact to keep the ball rolling. The very important thing is that you are still doing it. Never underestimate your little or small accomplishments each day, rather celebrate with yourself in accomplishing those.
- STEP 3: GO FOR THE EXTRA MILE
While celebrating small successes each day, also try to keep pushing forward. Keep improving your craft, doubling your effort, and going an extra mile with what you are usually doing each day.
As the holiday season is fast approaching, this is the best time to maximize your time and effort. Don’t wait until January or the next year to build your castle. Now is the right time to start working for your success with tax liens and deeds. - STEP 4: BE CONSISTENT
Keep doing those things that lead you to your success. Even if you don’t feel it sometimes, feeling doesn’t matter anyway because it’s conditional.
Example: Turning preparation into profit
Many new investors lose money by rushing into auctions without research, only to find hidden problems later. Those who take the time to study the laws, check properties, and budget properly are the ones who score deals and make real profits.
Personal insight: When I first got started in tax deed investing, I noticed that my motivation dipped whenever progress seemed slow. To push through, I kept a journal of small wins, every property visit, every phone call with a county clerk, every spreadsheet updated.
Those “little successes” reminded me that I was moving forward, even when big deals weren’t closing yet. I also made it a rule to walk or drive by every property on my list, no matter how good it looked on paper.
On one trip, that extra mile literally paid off: a house that appeared perfect online turned out to back onto a floodplain. I avoided a costly mistake and kept my momentum going.
FAQs
Not knowing local laws or redemption periods, skipping due diligence, and missing deadlines are the main challenges. Costs like repairs, legal fees, or other liens can also hurt profits, and a lack of focus or planning slows success.
Yes, many counties run auctions online and let you pay electronically. Some still require in-person bidding or a deposit, so always check local rules.
Review county records, check for liens or assessments, inspect the property if possible, and run a title search. Always compare costs to potential returns.
They set the time the owner has to pay back taxes. Shorter periods mean quicker returns, while longer ones require patience and extra capital.
Budget for legal fees, property upkeep, insurance, travel, and possibly other liens or fines before you can get a clear title.
No. Most lien buyers never take possession because owners typically redeem their property by paying the taxes plus interest. Taking possession is usually a last resort and can involve other liens or legal issues.
Final takeaways
- Keep learning your state and county rules (e.g., Florida’s two‑year wait vs. Texas’ six‑month redemption on most properties).
- Inspect and research every property before you bid.
- Set a realistic budget that covers premiums, legal fees and maintenance.
- Stay disciplined and celebrate progress so you maintain momentum even during slow seasons.
Be consistent in staying focused to reach your goals. Be consistent in acknowledging little successes every day. And be consistent in going an extra mile, then you’ll not be worried even in this slow-down season, for you know that you have ways to keep that ball rolling and getting excited for the new year to come, because you are certain that no matter what, you are moving on and on to reach your success.
Talk soon,
Dustin
PS: Need some extra motivation and/or help with your tax lien & deed Investing? Book a call in with our team today to go over your best next steps 🙂
