Phoenix, AZ and Florida Tax Auction Fees and How to Participate.

6 Replies

Hello, all!

I’m a newbie to the investing world and am still in my research phase. I wanted to ask something I couldn’t find in the forums, or on the internet.

I currently live in Tallahassee, Fl but plan to move to Phoenix, AZ where I will begin my investing. Does anyone here know how to get involved in Phoenix? Also, while I’m still in Florida, are we allowed to attend just to learn and not necessarily participate?

I have heard on a podcast that there are fees connected to tax auctions depending on how many properties you are purchasing. However, I would like to confirm if so, what are these fees and are they indeed refundable if you do not end up making a purchase?

Also, what are some tips you’d recommend for someone new as a way to check the property and make sure that everything that’s listed about it is accurate and that there aren’t any partial, or pending payments on the property before one decides to invest? Silly question, but is it possible to get a refund if you change your mind about the property and and want to put it up for auction again? 

What are someone bad experiences you’ve had, or someone you know has had doing this that has turned out to be a learning lesson?

Thanks a bunch!

So just my 2cents here, but I think investing in tax liens is a bad idea, especially in a "good" economy time like now.

There is much less supply now vs in the trough of a recession and your major competitors are hedge funds/banks.  The allure of 16% return sounds great but many go for 1%-3% interest, even ZERO... because the lender holding the mortgage isnt' going to let you swoop in and take a property they've lent on.  You can get a much better return on your money just doing simple index funds and bonds (3-9% historically)

If you're trying to get a property for cheap this isn't a good route either as i've heard ~95% in AZ will get redeemed, meaning you won't get the property.  And the redemption period is 3 years, so you'll have to continue buying the tax liens on the same property 3 years in a row for the chance to get it, which could potentially lock up alot of your money while you wait.

Bad experiences I've heard of are people "winning" a small irregularly shaped piece of land with no buildings that is completely landlocked and unsellable.  Obviously poor research on their part but still.

There are no refunds once you've won and paid.  But if you've won and haven't paid and don't within 24 hours, they just offer it to the next lowest bidder.

You also can't bid on 50 thinking I'll just pay for the best 2 because "A deposit of 10% of your expected bids must be made prior to the close of any batch in which you intend to submit bids."

For more info see https://treasurer.maricopa.gov/Pages/LoadPage?page=TaxLienTutorial

If you're looking for an easy in to RE investing also have a look at REIT ETFs or crowdfunding platforms. They're super passive and give solid returns with no work, just remember to diversify

Originally posted by @Chris I. :

So just my 2cents here, but I think investing in tax liens is a bad idea, especially in a "good" economy time like now.

There is much less supply now vs in the trough of a recession and your major competitors are hedge funds/banks.  The allure of 16% return sounds great but many go for 1%-3% interest, even ZERO... because the lender holding the mortgage isnt' going to let you swoop in and take a property they've lent on.  You can get a much better return on your money just doing simple index funds and bonds (3-9% historically)

If you're trying to get a property for cheap this isn't a good route either as i've heard ~95% in AZ will get redeemed, meaning you won't get the property.  And the redemption period is 3 years, so you'll have to continue buying the tax liens on the same property 3 years in a row for the chance to get it, which could potentially lock up alot of your money while you wait.

Bad experiences I've heard of are people "winning" a small irregularly shaped piece of land with no buildings that is completely landlocked and unsellable.  Obviously poor research on their part but still.

There are no refunds once you've won and paid.  But if you've won and haven't paid and don't within 24 hours, they just offer it to the next lowest bidder.

You also can't bid on 50 thinking I'll just pay for the best 2 because "A deposit of 10% of your expected bids must be made prior to the close of any batch in which you intend to submit bids."

For more info see https://treasurer.maricopa.gov/Pages/LoadPage?page=TaxLienTutorial

If you're looking for an easy in to RE investing also have a look at REIT ETFs or crowdfunding platforms. They're super passive and give solid returns with no work, just remember to diversify


Thank you for your perspective! Any idea how much a redemption fee could cost, or does it just depend on the state/property?


I’m definitely going to check that link out.


Thanks again! 

Also, according to the podcast I listened to, there’s fees for entrance depending on if you are interested in one, or two properties. I believe she said $2,500 and another amount if I’m not mistaken. However, these fees will be refunded if you do not land a final sale, or maybe that could just be in her city, Detroit. Does anybody know about this?

Tax lien sales and tax deed sales require a deposit in advance to bid. I believe the deposit is 5% so if you put up $2500 you could bid up to 50K. Final payment is due the following day if my memory is correct. Tax liens start at 18% and are bid down. This info is for FL.

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