Fed's Interest Rate Cuts Seen Boosting Hedge Fund Investment in Tax Liens, According to Optimum Realty Corporation

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Property tax liens, an alternative investment sector, become more attractive in an environment of falling interest rates. There are a number of characteristics of tax liens that make them appropriate for hedge funds.

One of the effects of the Federal Reserve Boards's recent series of large interest rate cuts will be to increase the attractiveness of property tax liens as an investment, particularly with hedge funds, according to Dan Friedman, President of Optimum Realty Corporation, a long-time tax lien investor based in the Chicago area.

Property tax liens are issued by local governments and are secured by real property. They are considered an alternative investment and most investors, even professionals, are not familiar with tax liens.

"Tax liens pay a high, fixed rate of return, so they become increasingly desirable in an environment of declining borrowing costs. Many hedge funds have plenty of capital to invest are are seeking low-risk absoloute returns not correlated to the stock market. That sounds like a brief description of tax liens," according to Friedman. He adds, "Since most hedge funds have a lean organizational structure and no experience with this asset class, the prevailing business model will probably be for fund managers to outsource the location of tax liens, along with the accompanying due diligence and day-to-day portfolio management to outside experts on a fee basis."

Started in 1991, Optimum Realty Corporation is one of the most experienced multi-state tax lien investors in the USA. The company manages a portfolio of tax liens and also provdes tax lien acquisition and servicing to hedge funds.

In addition to being President of the company, Dan Friedman is the author of Tax Lien Investing for Beginners. He is a frequent speaker on the topic of tax lien investing.

Dan Friedman, President
Optimum Realty Corporation
261 North York Street, Suite 203
Elmhurst, IL 60126
(630) 530-0766


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