Purchasing property tax liens in Colorado, Wyoming and Montana

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Has anyone purchased a tax lien from a tax sale in any of these three states (Colorado, Wyoming and Montana ) ? I see they are all tax lien states. I was reading about WY and the process they use; the computer randomly pulls a number from everyone who is registered, and if your number is selected you get the option to say yes or no. If you say no another number is generated but you sit out till it goes through everyone else. Looks like the tax sales are still held in person. Not many properties go to tax sale in each county from what I see. Also see how they don't want companies or agents buying but only people who are buying in their own person name for themself.   I need to research Colorado and Montana, anyone purchase from either of these 3 states and wouldn't mind sharing any info ? Thanks 

@Will Sifert In WY do you buy the lien at face value? If there is no bidding, how is the property owner compensated for their equity if a foreclosure goes through?  Fascinating but goofy. 

Originally posted by @Ned Carey :

@Will Sifert In WY do you buy the lien at face value? If there is no bidding, how is the property owner compensated for their equity if a foreclosure goes through?  Fascinating but goofy. 

It’s a tax lien state, so if a tax deed is given (after 5 years) the original owner loses the property and gets nothing. It’s the same way here in Louisiana assuming no one bids down from 100% ownership. 

From what I have read, WY you pay actual taxes due plus penalties and interest. What is interesting is the way they select the winner of the property at the sale. They generate numbers randomly, if your number is picked you say yes or no. If there is more bidders than property you might not get anything. If you say no you might not get another shot. Definitely will keep the hedge funds out, can only bid in your name no agents or representatives allowed. Sounds like they are all still in person even with covid. 

Other interesting things to note:

Their deed wipes out all liens including IRS lien, only exception would be other property tax liens. 

After 5 years you can go through the process to request a deed if there has been no redemption but it has to be requested before 6 years. Sounds like if you wait more than 6 years after the date of tax sale you SOL. 

 

Colorado is interesting....  The opening bid is the cost of the taxes due, plus interest and penalties. From that point, people can "bid up" how much money they want to spend beyond the actual cost. If the property is redeemed you only get back your actual cost with interest and you lose any amount you paid over that actual cost.

Montana I am still trying to figure out exactly... It appears you have to send a letter to the owner of the property that you want to get a tax sale, two weeks before it goes to tax sale through a process called an assignment. If the owner does not pay by the time of the auction then you can bid on that property but you have to produce the proof that you sent the notification. I still haven't figured out how the "bid" is determined if two or more people are interested in the same property and sent notice. What if 100 people are interested, seems like a lot of mail the owner would get.

Anyone here have experience with Colorado, Montana or Wyoming and care to share some of the basics, or at least if what I posted is correct? Thanks. 

All of the things you said are pretty spot on @Will Sifert , the odds of getting a property for taxes are extremely rare.  Maybe in a case where the owner had no relatives and died and there is no one to pay taxes.  Most of the time the folks scape up money after awhile and pay them off.  The good part is that you get 15% interest on them until they pay it and a 3% penalty.  I have bought about a dozen over the years and have never gotten a property.  I am aware of one or two times where a decent property was eventually converted to ownership, but often the ones who go 4 years are pretty derelict properties.  Abandoned houses on super weird lots on the side of a hill or in an alley, etc.

Often the taxes are only a few hundred dollars so even at 15% you don't make but $45 a year.  there is still the hope that you will strike it rich.  I cannot speak to other states.

Originally posted by @Jerry W. :

All of the things you said are pretty spot on @Will Sifert, the odds of getting a property for taxes are extremely rare.  Maybe in a case where the owner had no relatives and died and there is no one to pay taxes.  Most of the time the folks scape up money after awhile and pay them off.  The good part is that you get 15% interest on them until they pay it and a 3% penalty.  I have bought about a dozen over the years and have never gotten a property.  I am aware of one or two times where a decent property was eventually converted to ownership, but often the ones who go 4 years are pretty derelict properties.  Abandoned houses on super weird lots on the side of a hill or in an alley, etc.

Often the taxes are only a few hundred dollars so even at 15% you don't make but $45 a year.  there is still the hope that you will strike it rich.  I cannot speak to other states.

Thanks for the feedback Jerry.  As far as you know, are all (or most) of the auctions in Wyoming still in person? It seems they make a good effort to keep the hedge funds out, which is nice. The selection process is pretty different as well, total luck of the draw and then you take it or pass and might not get anything.  


I am in Louisiana and do a lot of investing in property tax liens here. Very interesting how each state handles the "bidding" process, which in WY really there is no actual bidding. From my experience about 95% of the properties here get redeemed ( 3 year redemption period). Land has a much better chance of not getting redeemed than a property with a home on it. If the owner lives in the home then the chance of being redeemed is almost 100%. With the exception of nice house that was abandoned, the only property i've gotten that had a house on it they were old and in really bad shape. Most of what I end up with after 3 years is land. We have a good interest rate as well, similar to WY. I am more than happy playing small ball and ending up with a piece of land worth 20K that I will net 15K profit after a 4-5 year process. Home run deals are 1 out of 1000. 

I would love to find a couple acres of secluded land in WY, but my luck when they called my number it would be a 20'x100' lot in town.

Any suggestions or info for going to an auction in WY ? Thanks!

 

@Will Sifert and @Ned Carey , all of the tax sales I have been to required that you be there in person.  Most would let you use your company name to buy taxes, but you only get to claim one, not one for you and one for each company.  there are no bids, only random draws, then you are out until at least everyone present has drawn.  Most of the tax sales are at about the same time so you can only hit one or 2 counties a year.  Some of the ones that were not redeemed were like a former dry cleaners shop that had a caved in roof and lots of mold.  No one actually ever filed for the tax deed because of the potential toxic waste dump liability issues.

I did see an attorney I know scam the system once.  Please forgive me for the following, I am not racist, but the facts are accurate.  In a neighboring county the guy apparently went down to the local park where a lot of drunk Indians from the reservation hung out and hired about 20 of them to come and sit in on the auction.  He promptly paid for every tax property they won, and I suspect that he had them sign an assignment to him in blank before he ever took them into the room.  He ended up with a lot of properties, but I never did hear if he got any that turned into ownership.  Perhaps he wanted a particular property because he had insider information, but knowing Mike I assume he just tried in hopes of getting a large tax purchase and better odds of winning them.

I know the County Treasurer was not impressed at him running in a score of barely sober/ not really sober guys from the park into her drawing room.  Unless the rules have changed every guy there could be buying for the same company, but you had to have an actual breathing body for each chance to win.  A lot of retired husband and wife teams travel around trying to do this as vacation/ travel/ maybe get lucky thing.  Kind of like using the metal detector on the beach.  You don't get rich, but might make a little money and have fun on the beach.

Originally posted by @Jerry W. :

@Will Sifert and @Ned Carey , all of the tax sales I have been to required that you be there in person.  Most would let you use your company name to buy taxes, but you only get to claim one, not one for you and one for each company.  there are no bids, only random draws, then you are out until at least everyone present has drawn.  Most of the tax sales are at about the same time so you can only hit one or 2 counties a year.  Some of the ones that were not redeemed were like a former dry cleaners shop that had a caved in roof and lots of mold.  No one actually ever filed for the tax deed because of the potential toxic waste dump liability issues.

I did see an attorney I know scam the system once.  Please forgive me for the following, I am not racist, but the facts are accurate.  In a neighboring county the guy apparently went down to the local park where a lot of drunk Indians from the reservation hung out and hired about 20 of them to come and sit in on the auction.  He promptly paid for every tax property they won, and I suspect that he had them sign an assignment to him in blank before he ever took them into the room.  He ended up with a lot of properties, but I never did hear if he got any that turned into ownership.  Perhaps he wanted a particular property because he had insider information, but knowing Mike I assume he just tried in hopes of getting a large tax purchase and better odds of winning them.

I know the County Treasurer was not impressed at him running in a score of barely sober/ not really sober guys from the park into her drawing room.  Unless the rules have changed every guy there could be buying for the same company, but you had to have an actual breathing body for each chance to win.  A lot of retired husband and wife teams travel around trying to do this as vacation/ travel/ maybe get lucky thing.  Kind of like using the metal detector on the beach.  You don't get rich, but might make a little money and have fun on the beach.

 One parish (county) tax sale I go to here, there is an investor that does the same thing every year. He shows up with about 20 people to bid for him to increase his odds. He pays them $100 each for the day and each one has a binder with a list of properties to bid on. It’s ridiculous but they allow it so he must be doing it right where each person bids in their own name and then transfers it to him after the tax sale. 

That’s  funny, I was thinking of an excuse to take a vacation with the wife to Yellowstone the same time the Teton auction was being held.