When you buy a TLC you are characteristically buying one years worth of taxes owed. In many counties, the current tlc owner will be offered an opportunity to buy future tax years that might be delinquent prior to the tax auction occurs. This action is called an endorsement.
The benefits of getting an endorsement is that you do not have to worry about the bidding process. Therefore, you get a set interest rate (basically what the county is offering). If the county normally offers a bidding process that is bidding down the interest, this can be a great advantage. If the county is offering a premium bidding process then it is one way to secure a tlc without dealing with bidding premiums and securing a higher rate of return. It is a property you already have done research on too.
Disadvantages could be that the amount of money now invested is more than proeprty is worth or reducing profit margin. Might not have money or want to invest more money into jsut one proeprty, might want to diversify investment dollars.
Some areas will require you to endorse future tax years or else be in default of tlc. If do not pay this amount for all tax years delinquent while waiting for redemption to occur, have to pay all back taxes and fees before can obtain tax deed if the redemption period ends and not redeemed by tax payer. In some cases, this could affect profit margin real easily. You should ask the county about their subsequent year delinquent tax process. It might dictate where you invest and/or which properties you bid on.
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125