Do you know about endorsements for tax lien certificates? An endorsement is the option extended to the previous year’s tax lien certificate holder to buy the current year’s lien on the same property prior to the tax lien sale. In some counties it is not an option, but a mandatory thing when you buy a tax lien certificate on a property that you are responsible for the next years taxes.
There are some potential benefits to the endorsement such as: There is no need to pay a premium, so you preserve a higher rate of return typically. the new endorsed tax lien certificate draws interest from endorsement date rather than from tax sale date.
If discount rate drops, endorsing locks in a higher rate from the earlier tax lien certificate sale, but if it increases, it locks it at the previous years rate still.
All in all endorsements could be a great way to secure your tax lien certificate and gain a higher rate of return.
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