As we have seen over the course of the postings at Market Watch, investing in tax foreclosure products is an opportunity for roughly 5% of the investing public that defies the popular notions of the other 95% of the public.

What would you tell me about the value of a debt based investment that goes beyond the due date of its agreed upon maturity?

The word most feared in the bond market is default.  Go beyond the payment date and the value of the government or corporate bond drops to junk, most likely to some salvageable discount rate or all the way to zero.

That’s the rule accepted by 95% of the investing public that will be broke at the time of retirement.

The shrewd 5% who invest in tax foreclosure investment (tax lien certificates, tax deeds and actual taking of property via tax foreclosure) know that the slow paying tax payer is worth an even higher rate of return!

You see when the tax payer falls behind and goes beyond the specified repayment period, the state or county tacks on additional interest of up to 25%!  The debtor will pay on this premium rather than losing their real estate.

Having a property owner paying late on a tax bill held by you isn’t necessarily a bad thing.