In all of its 254 counties, the Lone Star state offers great deals for real estate investors, but they do not come in the form of tax lien certificates. Instead, Texas issues a type of tax deed that has two redemption periods for the homeowner. If it's not too tricky to understand, it may be wise to understand, as this is probably the best state in the union for purchasing tax deeds.

Tax Sales in Texas

Texas offers a type of tax deed system that varies from county to county and is difficult to muddle through, but what is known is that if the property goes to auction, it is best to buy it. The government allows homeowners to default on their property taxes for two years before making an official notice of a public sale, posting to all interested parties and lien holders. The deed is then sold for these back taxes, but with a clause.

Texas is a tax deed state, but there is a right of redemption at a high interest rate for the previous homeowner. If he or she pays back the tax debt with 25 percent interest within six months of the auction, their rights as owner will be restored. Even if this is the case, it is excellent place to make a great return on your investment.

If the former property owner does not pay you within six months, you can apply for a clear title to the property, which forgives all past liens. Overall, it may be the best state for tax deeds and for trying to buy property quickly. Just be careful of all of the bidding on wanted and valuable lots--don't let your bid be taken higher than you are willing to pay. Back out and save your money for another auction.