Investors Are Placing Their Bets on Tax Liens
By Greg Ip
From The Wall Street Journal Online
The front door of the dilapidated row house half a mile from Capitol Hill is boarded up, its lawn is overgrown, and its porch roof is missing. But Matt Earley notes approvingly that the iron bars on the windows are intact and that the houses across the street are being spruced up. "This is the only problem property on the block," he says.
Most important, the owner is about $3,000 in arrears on the property taxes. Mr. Earley bought that unpaid tax bill for $203,000 at an auction run by the District of Columbia. If the owner pays his debt, Mr. Earley's firm, Mooring Financial Corp., will get its money back and earn a profit of a few hundred dollars -- a skimpy return. But if the owner doesn't pay, Mooring could foreclose and sell the house for several hundred thousand dollars' profit.
Read more about this article by accessing Wall Street Journal's Real Estate Journal.