Wow, 7,700+ bids for one tax lien certificate in AZ!

Tax Liens & Mortgage Notes
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Wow, 7,700+ bids for one tax lien certificate in AZ!

Jerry K.
Specialist · Phoenix, AZ · Member since 2011 · 698 posts · 629 votes

Just noticed as I was looking through the online tax lien auction going on for Yavapai county in Arizona.

There are certificates that have over 7,700 bids! The most I've ever seen in the last three years has been 700 bids.

The large banks and funds are back in force for some of the certificates in the auction.

Jerry

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  • Jerry K.
    OP
    Specialist · Phoenix, AZ · Member since 2011 · 698 posts · 629 votes
    14y

    This is crazy to see. Today is the day the auctions close in the online tax lien auction for Yavapai county. I'm seeing individual certificates with over 32,000 bids!

    There was one certificate that I saw had 18,000 bids. I did a little research and decided to place a bid myself. In the 10 minutes it took to do the research and place my single bid, the number of bids for the certificate shot up to 24,000+.

    I looked back through the last 3 years of results I have and I did find a couple of certificates 2 years ago that had just over 800 bids. Never these numbers I'm seeing today.

    It will be a couple of weeks before the final results spreadsheet is available. I'll be looking closely to see how these huge bids played out. My guess is that banks and funds are investing big time this year.

    And why not? Pay savings account holders .25% interest and take the funds and earn 6% or higher. Nice profitable spread.

    Jerry

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  • Adrian G.
    Real Estate Investor · Chicago, IL · Member since 2008 · 318 posts · 30 votes
    14y

    Arizona is the most competitive and aggressive state for tax liens in the whole U.S., Im not surprised by that at all.

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  • George P.
    Real Estate Investor · Baltimore, MD · Member since 2008 · 1k+ posts · 268 votes
    14y

    How is the BID defined in AZ? a decrease of a decimal of the interest rate percent ?

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  • Jerry K.
    OP
    Specialist · Phoenix, AZ · Member since 2011 · 698 posts · 629 votes
    14y

    George,
    In the Arizona counties a bid you can only bid round numbers 0% through 16%. A single entitiy can have subaccounts as long as each subaccount has it's own Tax ID.

    The funds and banks use the Tax ID's of the investors and create thousands of subaccounts that they use in bidding. All subaccounts must be bid at the same interest rate. A bank/fund/person has to bid all those subaccounts at one rate per lien.

    The banks and funds tend to bid a tthe same rate for all the certificates they bid on. I have an example of a lien I won that beat out the 7,000+ bidder. I show the bid breakdown for the lien in my BiggerPockets blog posthere:

    http://www.biggerpockets.com/blogs/2682/blog_posts/21012-arizona-analysis---what-i-did-and-why

    Jerry

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  • Luc M.
    CT · Member since 2011 · 41 posts · 3 votes
    14y

    I understand that some Florida counties may not allow sub accounts this year. That would be much better for the individual investor!

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  • Jerry K.
    OP
    Specialist · Phoenix, AZ · Member since 2011 · 698 posts · 629 votes
    14y

    Luc,
    You are correct. I'm working on a blog post about how that changes the FL auctions. Now looking at previous year results really helps you find the best bid strategy.

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