Real Estate Cycles: When’s the Best Time to Buy Tax Liens and Tax Deeds?
12/23/2025 12:00:00 AM
Picture the market like a giant wave pool—sometimes calm, sometimes crashing. Your job? Jump in when the water’s rising (more liens) and ride the swell to the shore (higher returns). Here’s how to read the ripples.
Boom Phase (Everyone’s Happy)
Homes sell within 10 days, prices climb 8% a year.
Lien Impact: Fewer delinquencies—owners refinance or sell before the tax sale.
Your Move: Focus on tax deeds in overbuilt suburbs; inventory is low, but deeds still pop up from investors who over-leveraged.
Correction Phase (The Wobble)
Prices flatten, days-on-market creep to 60+.
Lien Impact: Delinquencies tick up—first-time buyers from the boom now stretched thin.
Your Move: Load up on liens in middle-ring counties. Redemption rates stay high, but interest piles up longer.
Recession Phase (The Storm)
Unemployment spikes, foreclosures flood MLS.
Lien Impact: Lien volume explodes, competition drops, bids go lower.
Your Move: Split capital 70/30—70% liens for safe 12–18% interest, 30% deeds for discounted flips once the bottom forms.
Exit Signals (Don’t Overstay the Party)
Mortgage rates drop in 6 months ? owners refinance, redemptions surge.
Auction attendance doubles ? time to cash out deeds.
Your Cycle Dashboard (Check Monthly)
Local unemployment rate (BLS.gov)
Median days-on-market (Redfin)
County lien list size vs. last year
Timing isn’t luck—it’s knowing the cycle. While these strategies are legitimate options, what’s right for you and your portfolio needs to be considered. Discuss with your coach and financial teams. Stay informed about what’s your best strategy.