Stephen Morel of JurisDeed on Why Most Tax Lien Investors Are Chasing the Wrong Outcome
By the end of this, you should be able to answer three questions: what you are actually buying when you buy a tax lien, why the property almost never ends up in your hands, and which single piece of work determines whether your return survives contact with the legal system.
Most people arrive at tax lien investing because they heard a story about someone acquiring a house for the price of the back taxes. Stephen Morel says that is the wrong reason to enter the market — and the numbers back him up. Morel is a Louisiana tax-title attorney with more than two decades in property law, an appointed member of the Louisiana State Law Institute’s Tax Sales Committee — the body that co-drafted the legislative overhaul of Louisiana’s tax-sale statutes — and the founder and CEO of JurisDeed, a platform built to make tax lien investing workable for investors who aren’t institutions. After Hurricane Katrina, he created an industry-first title insurance program for tax-adjudicated property that has since returned more than 10,000 such properties to commerce with marketable, insured title.
His framing is blunt: the property is the failure case, not the prize.
What you are actually buying
When a county or city issues a property tax bill, it holds a lien against that property until the bill is paid. If it goes unpaid, the government has a revenue problem, because property taxes fund police, fire, schools, and roads against a budget that was already set.
So the county sells the lien. Investors bid; the winner pays the delinquent amount; the county books the revenue it was counting on, and the lien passes from the government to a private holder. You now hold paper secured by real estate, and it accrues interest at a rate set by state law.
That paper generally sits in first position — senior to the mortgage and to most other creditors attached to the property. “Nothing is a higher priority than the tax lien,” Morel says, “because you know what that money is going towards.”
Decision rule: if your investment model depends on ending up with the deed, you are modeling the exception rather than the outcome.
The redemption clock is where the return lives
After the sale, there is a mandatory waiting period before any foreclosure action is possible. It runs from roughly six months to three years depending on the state. During that window, the homeowner, an heir, a relative, or a mortgage servicer can pay off the debt with interest, and the county typically administers the payoff and forwards the proceeds to the lien holder.
Industry estimates put redemption at roughly 95 percent or more of liens nationwide, with completed foreclosures in the low single digits. What reaches foreclosure is generally what you would expect: truly abandoned structures and vacant land.
The interest or penalty rate that accrues during the redemption window is fixed by statute, and those statutory rates vary widely by state — from mid-single digits in some jurisdictions to the high teens in others. Morel is careful about a distinction new investors miss: a statutory rate is the law’s sticker price on redemption, not a promised return. The return you receive depends on which state you buy in, when the lien redeems, and whether you stayed in compliance while it aged. He also describes the most common way investors realize that return: “You could just sit back and literally do nothing and then all of a sudden check shows up.”
Before you bid, check the redemption period length and the statutory interest treatment in that specific state. Those two variables set your timeline and your yield before you have made a single decision.
The distinction that catches new investors
Not every state sells liens. Some hold the delinquency internally for a longer stretch, run their own collection process, then auction the property itself rather than the debt. That is a tax deed. It typically transfers with limited or no warranties, leaving the buyer with clouded title that may require curative or quiet-title work before it’s insurable.
The key distinction: in a lien state, you are buying a debt instrument with a redemption clock. In a deed state, you are buying real property with title work in front of you, not behind you.
Know which one you are bidding into before you wire funds. They are not variations on the same transaction.
The work that protects the return
Holding the lien is passive. Staying in compliance is not.
Most jurisdictions require the lien holder to send legal notices to the property owner and any other interested parties, and the standard for how hard you must try to find those people comes down from constitutional due process. You cannot take someone’s property without a documented effort to notify them.
“This is not direct mail marketing,” Morel says. “You have to get it right, and you have to prove you did it.”
The most common mistake is treating that step as paperwork. Investors who skip the research find out later, when a suit lands seeking to nullify the tax sale, that the answer was available before they bid. Morel cites two versions he sees repeatedly: a property that had already been through multiple lawsuits before the investor bought into it, and an owner who died before the sale, leaving an heir who now has standing and a grievance. Both are discoverable in advance. Neither is discoverable after.
If you cannot answer who currently has an ownership interest in the property and where they can be served, you are not ready to bid on it.
Who this actually fits
Institutional buyers take the majority of the market annually — roughly four-fifths of tax lien certificates, by industry-group estimates — deploying anywhere from tens to hundreds of millions of dollars. Morel puts total annual investor spend on delinquent property debt nationwide in the six-to-eight-billion-dollar range. Everyone else competes for the remainder, usually inside one state or one region they know well.
That regional familiarity is a real edge. What smaller investors lack is scale, and the compliance costs that institutions absorb across thousands of liens land hard on a portfolio of a few dozen.
There is also, today, no organized secondary market for unredeemed liens, which limits the exit.
That gap is the problem JurisDeed was built around. Morel founded the company in 2020, and it is now bringing into beta what it describes as the first AI-driven platform for nationwide delinquent property debt investing — handling the state-by-state variation, the notice work, and the compliance sequence, with a network of attorneys available if a lien reaches foreclosure.
Investors can still bring their own counsel. The stated goal is consumer-fintech simple: tax lien investing for the rest of us, with the power of the pros, without the need to be one. Investors can request early access at JurisDeed’s site.
The reframe Morel wants investors to carry into it is the same one the data supports. You are buying an interest-bearing instrument in first position, and the property is what happens when the instrument fails to perform.