Something interesting has been happening lately.
More and more experienced real estate investors — I’m talking about successful flippers, buy-and-hold pros, even multifamily operators — keep showing up in my tax lien training sessions.
At first, I wondered why.
These folks already know real estate. They’ve got their systems down. They’re making good money. So why are they suddenly interested in tax liens?
Then it hit me. A big “aha!” moment for sure.
And once you understand what they’ve figured out, you’ll see why adding tax liens to your portfolio might be the smartest move you make this year.
The “Aha!” Moment Successful Investors Are Having
Here’s what I’ve discovered working with traditional real estate investors:
The “aha” moment happens when they realize this isn’t in competition with what they’re already doing.
They’re not taking time away from finding the next flip. They’re not abandoning their rental portfolio.
They’re adding a complementary strategy that actually makes everything else they do stronger.
Think about it.
Most real estate strategies require constant hustle. Finding deals, managing contractors, dealing with tenants, chasing motivated sellers.
It’s profitable, but it’s work.
Tax liens? Completely different animal.
Now, if you’ve been following along with my recent articles, you know I started with just $72 while living in my mom’s basement.
But for those joining us for the first time, let me paint the picture:
Tax liens let you invest in real estate-backed securities that pay guaranteed returns of 16% to 36%, all without the typical headaches of property ownership.
Why Traditional Investors Are Flocking to Tax Liens
The biggest shift I’ve seen?
There’s a shortage of inventory in some areas in the U.S. right now.
Good deals are harder to find. Competition is fierce.
And here’s the kicker — successful investors don’t want their money to be stagnant while they hunt for the next deal.
That’s exactly where tax liens come in perfectly.
It’s a place to park money where it’s consistently growing 16%, 18%, even 24% annually.
Not sitting in a bank account earning nothing. Not tied up in a flip that’s taking longer than expected. Just steadily compounding while you focus on your main business.
I’ve talked before about how you can start with as little as $20 (seriously), but established investors are using this differently. These guys are eagerly putting $10,000, $50,000, even $100,000 or more into tax liens as their “working capital” between deals.
The Perfect Complement to Active Investing
Let me share what makes this strategy so powerful for active investors. And I’m speaking from experience here — I do a lot of different types of real estate beyond my 700+ tax liens.
The beauty is how perfectly they work together.
No Property Management: You know those 2 a.m. calls about broken toilets? Yeah, those don’t exist with tax liens. You’re not managing properties, dealing with tenants or chasing rent payments. You buy the certificate and wait.
True Passive Income: This isn’t “passive” like rental properties where you still need property managers and maintenance. This is actually passive. The interest builds automatically. You can calculate exactly how much you’re making daily without lifting a finger.
Consistent Returns Without Volatility: Unlike flips where your profit depends on market conditions, renovation costs and buyer demand, tax liens pay their stated rate. Period. That 18% in Florida? It’s locked in by law.
A Pipeline for Deals: Here’s something smart investors love — sometimes you end up acquiring properties through tax liens at massive discounts. I recently picked up a property in Florida for $7,200 that’s worth $65,000. Try finding that kind of discount on the MLS. ッ
How Savvy Investors Are Using This Strategy
You might remember me mentioning my Michigan property that I got for $177.50 and flipped to a rehabber. For those who missed that story, it perfectly shows how tax liens can feed your other investing activities.
But let’s talk about how established investors are taking this to the next level.
They’re using tax liens three ways:
First, as a Cash Management Tool: Between deals, instead of money sitting idle, it’s earning 18% or more. When the right flip comes along, they’ve got capital that’s been growing, not stagnating.
Second, as a Diversification Strategy: When all your eggs are in one basket — even a good basket like real estate — you’re vulnerable. Tax liens provide steady returns regardless of what’s happening in your local market.
Third, as a Deal Flow Source: Some investors specifically target tax liens in their farming areas, knowing that if they acquire the property, they’ve got a built-in discount that makes their flip margins even better.
Real Numbers from Real Investors
I work with a flipper from Texas who puts his working capital into tax liens between projects.
Instead of having $75,000 sitting in a checking account while he hunts for deals, it’s earning 24% annually.
Just to be clear, that’s $18,000 per year in passive income just from money that would otherwise be idle.
Read that last line again if you need to, seriously. 💥
Another investor I know in Florida uses tax liens as her “recession insurance.” She’s got a successful rental portfolio, but she’s also got $200,000 in tax liens earning 18%. If the rental market softens, she’s still got guaranteed income coming in.
And here’s my favorite: A wholesaler in Arizona who started buying tax liens in areas where he was already marketing for deals. Now he’s got multiple exit strategies — wholesale the lien, wait for redemption, or acquire the property at a massive discount.
The Time Factor Nobody Talks About
Here’s what really sells experienced investors on this strategy: time investment.
Or really, the lack of it.
You can do this in your spare time. I’m not exaggerating.
While finding a good flip might take weeks of searching, analyzing & negotiating, I can research & buy tax liens in minutes from my computer.
These days, things have gone digital and virtual. Most sales are online now. I buy properties every single week from my home office here in the DC area, never leaving my desk.
So it’s literally something you really can do in your spare time today.
That’s huge for busy investors.
You’re not taking time away from your core business. You’re adding a complementary income stream that requires minimal effort once you understand the system.
Getting Started the Smart Way
If you’re already a successful real estate investor, you’ve got advantages most people don’t. You understand property values. You know which areas are growing. You can spot a deal when you see one.
All those skills transfer directly to tax lien investing.
The difference is, you’re applying them to a strategy that’s more passive, more predictable and often more profitable than traditional real estate.
Here’s my advice for established investors:
Start by investing in areas you already know. Use your market knowledge to identify the best opportunities. You already know which neighborhoods are desirable and which properties have value.
Begin with a small test investment to understand the process. Even if you can invest $50,000, start with $1,000 to learn the ropes.
Once you see how it works, scale up quickly.
If possible, try to focus on the 16% to 18% range initially. These are the sweet spot — good returns without getting too complicated.
States like Florida and Arizona are perfect for this.
The Bottom Line for Smart Investors
Look, I’ve been doing this long enough to know that successful real estate investors don’t add strategies lightly.
You’ve got systems that work. You’re making money.
Why complicate things?
But that’s exactly why tax liens make sense.
They don’t complicate your business — they complement it. They turn idle cash into earning assets. They provide steady income between deals.
And occasionally, they deliver properties at prices that would make any investor smile.
I put together the Tax Yields program specifically to help investors like you add this strategy efficiently. It’s not about abandoning what works — it’s about making what works even better by adding a passive income stream that runs in the background while you focus on your main business.
Every week, I watch smart investors discover what I learned years ago: Tax liens aren’t instead of traditional real estate investing. They’re the perfect addition to it. A way to make your money work as hard as you do, even when you’re not working at all.
That’s why my wall of redemption checks keeps growing. And why more and more successful investors are adding their own checks to their walls too.