Online Tax Lien Auction Analysis - Pinal County AZ

I have good data on Pinal county Arizona for 2014 Tax Lien auction. I've begun to do a little deeper dive into the results. I was able to get the Property Use code so it helps analyze the types of properties with rates that won, number of liens available for that type, and this year I added the number of bids.

NOTE- the Property Type was pulled from the county website and the records there can be mis-classified, but it is good enough for my analysis.

First let's take a look at the largest winners in terms of dollars invested. Since "STRUCK TO COUNTY" are the most liens, I actually took a screen shot of the top 11 winners to give a top "Ten" list. From the looks of the names of the winners, it looks like all were institutional investors of some sort.

(Click on any image to see a larger version)

The first fund after Struck to County invested $1.9 million with an average of over 13% interest rate return. Pretty impressive. So I looked at only Aberon Fund 1 LLC's liens and found 1,313 (98% of their total) liens out of 1,333 purchased were on Vacant Land and averaged 14.72% on those liens.

PTL Partners had the second highest overall rate at 15.07% buying 376 liens. A little look deeper shows they too bought mostly Vacant Land liens 261 (69% of their total) with the rate on just those type providing 14.65%. They also bought 86 (23% of their total) liens on Mobile Homes and earned an average of 15.05% on those.

Next up, I looked at the Type of property and showed the total dollar amount of liens sold, number of liens of that type, average rate by type and I added the number of bids placed per type. This group is eye-opening for the investor when we sort by the different data items.

First sort is looking at the types of liens from highest average winning rate to lowest. If there is no bid then it is struck to the county at 16%. You can buy that lien from the county and earn 16%. We see that those property types that only had a few liens are among the highest rates - and that makes sense because few investors want the risk associated with some of these types.

For example there was one lien on a "Service Station". It was for $26k, had 2 bids, and went for 15%. A good rate, but the EPA risk is high if it is an old station and you have leaking underground tanks. The good thing is that you can look up on the EPA site to see if the parcel is flagged already and if you're in the area you can do a drive by and some research to check things out yourself.

Note that "Vacant Land" had a large amount of liens and still had a high rate of interest at 13.08%

Now let's take a look at the same data sorted by "Face $ of Liens". Makes sense that "Vacant Land", "Single Family Residential", and "Mobile Home" are the top 3 for Face value of liens sold. And the Average rates are interesting. For an investor who is looking for getting top rates, they should lean toward Vacant Land, but make sure you have an exit plan if you end up with the land.

Lastly, we'll look by number of bids. Let's see the most popular type of property. I added an extra column where I created the average number of bids per lien. Because we've seen Vacant Land, Single Family Residential, and Mobile Homes had the most number of liens, they should have the most number of bids. The Average bid per lien should help point out what your competition is by type of property.

Almost 9 bids per "Single Family" with an average rate of 5.25%, surprisingly only 1.14 bids per Vacant Land lien and an average rate of 13.80%. So the rates for these two make sense - demand (bids) is high, then rate is lower - and if demand (bids) is low than the rate is higher.

By looking at the average number of bids (below) I just learned that "Townhouse", "Townhouse/Condo", and "Apartment" are getting high numbers of bids per lien and low rates. Competition is tough for those types of properties.

Thought it might be interesting to show what the average lien amount was for each Property Use type.

It makes most sense for those types that had the most liens. For example, you can see that Vacant Land averaged $1,323.95 per lien. SFRs averaged $1,316.72 per lien. Mobile homes averaged in the mid $800 range.

One point to keep in mind is that Vacant land is often extremely large tracts of land so that would account for Vacant Land having such a high lien amount. There also could be several vacant land liens that were for multiple years of taxes. That could drive up the average lien amount too.

This is why I like online auctions. You get the auction results data and can add bids, types, etc. and create strategies for tax lien investing.