Colorado Tax Liens - Why bother filing for treasurers deed?

Question

So I have been deep diving into Colorado Tax Liens last 4 months.  I understand you can begin the process to receive the treasurers deed at 2.5 years and in theory (excessively unlikely) receive the deed in 3 years time.  I have read all the Colorado statues and annotations, and can't find anything suggesting I can't keep endorsing/let interest accrue past the 3 years time.

So my question is, if your tax lien is a small percentage of property value, why would you bother to start the redemption process and most likely get your capital back?  It seems continuing to endorse/accruing interest would be the approach if I want the interest.  Anyone familiar with any reasons/cases/laws of why this would not make sense?

https://leg.colorado.gov/laws   Title 39 Article 11/12

Nick P. · Answer

@Teri S.  I haven't had one of my tax liens go that far so not sure if they "force" you to redeem.

Yeah when you file for treasurers deed I am saying odds are you are getting your capital back since they will have to sell or figure out somewhere to get the funds.

My strategy for this question is looking at a fairly large property on a county held list.  It hasn't had taxes paid for 4 years and is owned by a private equity fund. The property itself is worth $1-2m, taxes owed are obviously significantly less.  The fund is over $500m in assets.  So approach would to be buy this lien and hold for as long as possible.

Teri Feeney Styers · Answer

@Nick P. don't the Treasurers in the county kind of force the issue when you reach that 3 year mark? They do all the work for you - but I think they want to wash theirs hands of the property after 3 years. I don't think they will continue to be your bill collector indefinitely. When you say "most likely get your capital back" do you mean that the property owner gets serious and pays up in order not to forfeit their title? Here is how I see it: if the property owner isn't interested in paying up after 3 years then the odds of them paying up in 5 or 10 years aren't great. So you are holding this lien - which is accruing interest that will never be paid. Why not own / sell the property and reinvest?