First tax lien auction

[Paul Hector]

The County confirmed my purchases in a recent Florida on-line tax lien certificate sale.

My strategy was to bid on liens between $300-$600. My goal was the high interest rate not foreclosing, so I focused on properties with no outstanding liens and out of State owners/mortgage holders. I also made sure the property value was at least 50x the lien amount.

I started working on this about 1.5 weeks before the auction. I selected the properties in my lien buying range and used the County's online database of property records to check payment history and proeprty values as well as tools like google maps and zillow.

During the auction, I found that between my initial research and the cut-off date for making payment on the lien many of the properties I had selected for my watch list had been paid off. I guess this in a way confirms my selection strategy.

I picked up 1 lien in the first round for just under $700. In the successive batches there was really a lot of competition and was amazed to see even non-institutional investors bidding the prices down to as low as 3% even where they were the only bidders. Many institutional investors came in durign the second round and promptly placed bids of 0.25% even on properties with liens of $400 if they were within condo complexes. Some bids submitted didn't process as the IT system wasn't keeping up and the bidding had to be paused at some points.

Preparing for the auction was really a lot of work, certainly not passive. It was also a really great learning experience!

As I didn't plan on investing more than $5,000, I fully realized from the start that the very best I could hope to receive for my efforts - before taxes - was $900. So this REI strategy I guess only makes sense if you have a lot of cash and/or time. I still plan on taking part in other auctions, hopefully will eventually be able to partner with others who have funds but may not want to do the considerable research this involves.

Looking forwards to receiving my 13.75% interest returns from the lien auction purchase!

A BIG thank you to Bigger Pockets forum experts like @nedcarey @jerryK whose post have been an invaluable source of learning!!

Would also love to know what strategies, filters or approaches other seeking to primarily capture high interest rates use in identifying, selecting tax liens to invest in? What else can be done to more effectively and efficiently participate in these auctions?

Thank you everyone!

[Jean Norton]

Hi Paul - I've participated in the Florida Lien auctions and yes, many redeem quickly. Remember that some actually never get sold and you can find those as "county held certificates". You can then go directly to the county and purchase those liens.