Has anyone purchased liens in DC? If so, have you every purchased after the July auction at the discount auction? Lastly, I read that 95% of DC liens redeem (seems hard to believe) do you find that to be true? Thanks.
@Jessica Howard no, I live in MD but I have never bothered with the DC auction. They changed the rules a number of years back and I don't know the details but it seemed like they made it much less advantageous to investors.
I would be surprised in ONLY 95% of the liens redeemed. I have always hear the national number is about 95-96% of liens redeem. I would guess and area like DC would have even a greater percentage redeem because of the value and competition for distressed housing there. Much of the foreclosures nationally are for vacant property and there is not a lot of that n DC.
Thanks @Ned Carey I live in DC and thought I'd start in my backyard. I've seen your name a lot out here, and with that said, I'll be looking at MD counties and Baltimore. What counties do you invest in?
@Jessica Howard I invest in any county in MD.
I will warn you that tax sale in MD is very competitive. In some counties people were bidding 3 times the assessed value of the properties. In other counties they are bidding the interest rate down to the 2-3% range. The way the the bidding works in MD, that means those bidders are likely to lose money if the owner does not redeem and if the do redeem they only make a couple of percent interest.
Thanks Ned I appreciate that. Not that I'm not trying to do the work, but I do want better returns than 2-3%, plus I'd like to acquire property through this avenue. Is Virginia in a similar competitive situation? I'm open to looking farther away from home and finding a team who can be boots on the ground as there are 48 other states to check into.
@Jessica Howard - Also with many things DC or big city related - to get into the game you have to be well connected. I do not do tax liens but have looked at them in the past and have found that to buy in major areas you have to be a major player to get anything worth value - and typically you have to get very lucky as the funds come in and buy the tax liens for very low returns because their cost of capital is so low.
Thanks @Chris Seveney for chiming in, I'll look elsewhere.
@Jessica Howard Virginia does tax deeds. You are actually buying the property with a tax deed, not just a lien against the property. However some states have redemption periods for tax deeds.
I don't know how competitive Virginia auctions are. However in the current market just about everywhere with every strategy is pretty competitive.