Every December, the DC Office of Tax and Revenue publishes a list of properties whose owners haven’t paid their property taxes. The list runs about five pages, contains roughly 330 parcels, and totals around $14.7 million in delinquent liens.
It is, to a certain kind of reader, pornography.
You’ve seen the genre. “How I Bought a House for $500 at Auction.” “The Secret Real Estate Strategy They Don’t Want You to Know.” “Tax Liens: 18% Guaranteed Return!” Every personal finance YouTuber with a ring light has done a tax lien video. Every “passive income” listicle includes them.
I spent about a week pulling the actual records on the most interesting-looking parcels on the December 2025 DC list. Here’s what I found, and why most of what you’ve read about this strategy is wrong.
What You Actually Buy at a Tax Sale
You are not buying a property.
Read that twice.
When you “win” a parcel at the DC tax sale, you are buying a tax lien certificate. You pay the delinquent taxes. In exchange, the property owner has six months to pay you back: the lien amount, plus 18% statutory interest, plus fees. If they redeem, you get your money back plus interest. You never see the property.
Only if they fail to redeem can you petition the Superior Court to foreclose. That process costs $2,500 to $5,000 in legal fees minimum, takes 12 to 24 months, and the owner can still redeem at any point before final judgment. Even if you successfully foreclose, you may inherit senior liens (mortgages, judgments, mechanics’ liens) that survive your tax foreclosure and wipe out your equity.
So the actual product on offer is a fixed-income instrument with optional property acquisition as a tail outcome. That is the entire game.
The outcome really surprised me.
Who Actually Buys These
The December 2025 sale results are public. Out of about 100 transactions on the first page of results, I counted seven LLCs that bought 80+ parcels between them:
- DSC WDC HOLDINGS LLC (18 parcels)
- 3RD AVE ODD LOTS, LLC (20 parcels — the name is literally their strategy)
- NEHEMIAH CONSTRUCTION LLC (16 parcels)
- CLEAR SKY HOLDINGS, LLC (9 parcels)
- MVP PROPERTIES LLC (7 parcels)
- ATCF II DC, LLC
- TIDEWATER ASSETS LLC
Individual buyers? Maybe ten names on the entire page, several of whom appear multiple times (which suggests they’re also running small professional operations, just under their own names).
The realistic estimate is that there are 20 to 30 active tax sale bidders in the entire District of Columbia. You could learn the name of every serious one in an afternoon.
The Minimum Bid Tells the Real Story
Here is the most revealing data point: almost every parcel on the December 2025 sale closed at exactly $300.
$300 is the upset price — the minimum opening bid set by DC. Out of ~100 transactions, I count three or four with competitive bidding that pushed the price higher. Everything else: one bidder, minimum bid, done.
This means:
- The professionals are not bidding against each other. They’re not bidding against you either. They’re bidding against the floor.
- They are buying portfolios of liens at the minimum, not making careful parcel-by-parcel selections. A $300 minimum bid on a $40,000 lien is not a bet that this specific parcel is great. It’s a bet that across 50 parcels at $300 each, the math works.
- The economics for the buyer don’t depend on winning a great parcel. They depend on collecting 18% interest on the underlying lien amount during the redemption period, regardless of what they paid up front.
Let me show you why this matters.
The Math That Nobody Explains
Say you bid the minimum $300 on a parcel with a $4,000 lien. The owner redeems six months later. What do you get back?
Not $300 plus 18% of $300.
You get back $300 (your bid) plus 18% interest on the full lien amount ($4,000). That’s roughly $360 in interest income on $300 of capital deployed.
Annualized return on cash deployed: about 240%.
This is not a typo. The leverage in the minimum bid structure is enormous, because the interest accrues on the lien size, not the bid size.
Now obviously you don’t get this every time. Most parcels don’t redeem in six months. Some redeem in two years. Some don’t redeem at all and you have to decide whether to spend $5,000 foreclosing on a parcel that may or may not be worth it.
But this is why “3RD AVE ODD LOTS, LLC” exists. The strategy is to deploy $300 across many parcels and let the law of large numbers handle the variance. At scale, this works.
The Catch: Almost Everything Redeems
The reason this works for the professionals, and the reason the personal finance influencers leave it out, is that the modal outcome is redemption, not acquisition.
Across improved properties (houses, commercial buildings), the redemption rate is something like 95%. People do not let $2 million houses get foreclosed for $30,000 in back taxes. They sell, they refinance, they borrow from family, they do whatever they have to do.
The parcels that don’t redeem are the ones nobody wants. Heirs property where the owner died in 1973 and no one bothered to probate. Defunct LLCs whose principals dissolved the entity and forgot. Paper subdivision lots from 1958 that don’t meet current zoning minimums. Slivers behind rowhouses. Vacated alleys. The leftovers.
If you actually take title to a tax-sale property, the prior question is almost always: why is this here and not in the regular market? And the answer is usually: because it has problems that the redemption math couldn’t justify fixing.
The Plat is the Whole Game
Here is the thing the YouTubers don’t tell you.
I spent a week looking at “interesting” parcels on the list — small liens in nice neighborhoods, defunct entities, mid-century individual owners, the patterns that scream “heirs property.” Every single one of them looked promising on paper.
Then I pulled the actual plats from the DC Real Property Assessment Map.
A “Capitol Hill assemblage opportunity” — four parcels at $3,114 each, same square, four different owners — turned out to be four 10-foot strips behind four different rowhouses. Unbuildable. Worthless except to the rowhouse directly in front, which already treats it as their backyard.
A “$34k lien on an UNKNOWN OWNER Georgetown parcel” turned out to be a 257-square-foot carriage way between two rowhouses. Real economic value, but the value comes from an adjacent neighbor paying you to clean up the title to their driveway, not from anything you can build.
A “$46k lien at Wardman Court near U Street Metro” — gorgeous economics on paper — turned out to be an interior service strip running through an active 91-unit affordable housing complex. Sure, you could squeeze the operator for a settlement. You also couldn’t ever explain why you did at a future job interview.
The pattern is consistent: every parcel that looks attractive on the list has a reason it is still on the list. The professionals aren’t missing free money. They’re cherry-picking the interest yield and staying clear of the messes.
What This Means for You
Here is the actual playbook, stripped of mythology:
If you have $300 to $30,000 of speculative capital and the patience to learn a procedural system, tax liens are a legitimate fixed-income strategy with embedded optionality. You will get yields that compare favorably to high-grade bonds with occasional property windfalls when small parcels actually convert. It is real money. It is also boring money. The annualized portfolio yield for someone doing this seriously is probably 10-20%, not 240%.
If you are trying to acquire a property at a discount, this is the wrong tool. The properties that actually convert have problems. The properties that don’t have problems redeem. If you want a DC house cheap, you want a different strategy — buy distressed listings, work auctions of foreclosed properties (real foreclosure auctions, not tax sales), or just wait for a recession.
If you are reading this and thinking “but what if I find the one good one”, I have bad news. The professionals deploying $300 at a time across a hundred parcels are running that exact strategy. You don’t have an edge. You have less information than they do.
The One Real Opportunity
There is one variant where the math works for an individual.
If you already own DC property and there is an adjacent vacant parcel on the tax sale list, that lien is worth bidding on regardless of the lien size, because you are the natural buyer at foreclosure. You don’t need to find someone to pay you for cleaning up the title, you are that someone.
This is how a Georgetown homeowner picks up the alley remnant behind their house for $500. This is how a Capitol Hill rowhouse owner absorbs the rear-yard sliver next door. This is how you extend your lot by ten feet and add a parking pad.
It’s not a get-rich strategy. It’s a clean-up-your-block strategy. If you own real estate adjacent to anything weird on the December list, you should be at the sale. If you don’t, the math probably doesn’t work for you.
What I Was Actually Doing
I want to close by being honest about what this exercise was for me.
I went into the tax sale list with the same fantasy you probably have. There has to be a deal in here somewhere. There has to be a $500 parking spot in Logan Circle that nobody else noticed. There has to be a forgotten lot in Georgetown that a sophisticated investor could turn into $200k.
There wasn’t. The thing the list teaches you is that real estate markets are competitive enough that the only parcels still available at deep discount are the ones that should be deeply discounted. The professionals know this. The system is designed around it.
The actual value of an exercise like this is not finding the deal. It is calibrating your sense of what kinds of “alternative strategies” actually work and which ones are marketing. Tax liens are real. The 18% yield is real. The system is accessible. And the strategy that actually works at small scale is far more boring than the YouTube version.
Which is, I think, true of most things people sell as ways to get rich quick on the side.
The best side hustle is still the same as it has always been: spend less than you earn, invest the difference, and pay attention to the assets you already own.