Posted almost 9 years ago

My Arizona Liens - the pretty post

This post is more eye candy than substance. I'll get to the dirty work in the next post. But hey, if there's beauty in real estate, you have to enjoy it.

In my last post, I talked about the results my friends received in their first tax lien buying experience.

I decided this year to pick off a couple of nicer looking properties for my lien certificates. That meant lower returns, but I wanted to prove to myself that my bid analysis could help me win really competitive certificates.

Little did I know how competitive this year!

Since I decided for eye candy looking properties I started with parcel numbers for an area I had just visited this past June with my family. The area is called "Village of Oak Creek" which has a Sedona mailing address. The area is south of the actual town of Sedona and the views are spectacular.

Red rock formations with layers of white stone mixed in make for some of the most picturesque scenery in northern Arizona south of the Grand Canyon and Flagstaff.

I saw a particular certificate was up for auction again this year. In 2010, I had bid and won this certificate on a residential lot that the owner has done some grade work and stone "bridge". The lot backs up to the National Forest land so nobody will ever build behind the lot and the views are spectacular.

The lot pre-2008 was worth about $425K. Lots in the area today go for about $195k. When I won the certificate in 2010, the owner paid it off in 4 weeks. However he did not pay the next year taxes and it was again in the 2011 auction.

I passed on it last year, thinking he would just pay it in a month. Well he didn't. It was in this year's auction showing the amount included the prior year's taxes as well. That meant the certificate holder also did not pay the taxes for the current year.

I debated on bidding on it this year, and decided that since I wanted to prove I could use my spreadsheets to win bids, this was a perfect certificate because it would get a lot of bids.

I'll cover my bid analysis in the next post. Since this is the eye candy post, here is a Google street view of the property:

A little blurry but you get the idea. How would you like that view from your home every day?

Here is the overhead view of the lot in the red outline. You can see how no one will ever build on the National Forest land with all the trails right behind the lot.

Houses in the area go for $600K to $800k these days. I had to show this picture which is from a house two doors away from the lot that was sold a couple of years ago. Nice view eh?

So that was the first target - the lot with the view.

My second target was just a few blocks away on the main road that leads to Sedona. It was a commercial property that was built in 1979 and has a thriving bike rental and coffee shop business on the ground floor and then a couple of apartments on the top floor.

The business owner does not own the building. When we visited in June we saw how busy this business was. Being right across the street from the National Forest land with all the trails was the perfect location for this business. The building was solid and the combination of apartments and retail space is something I like.

This property had all the earmarks of high number of bids certificate. Again the bid analysis will be in the next post. I expect this certificate to be paid, but if you're going to bid on a property, it's fun to occasionally go for the eye candy and dream.

Here is the Google street view of the building:

The arrow obviously points to the building with the certificate on it. Next is the overhead view (building in red outline) and you can again see the location to the National Forest Land and why the bike rental business is in this location. Look at the parking and trails right across the street:

I know this next picture is big, but what a view from Google street view of the building on the left (arrow) and the view and area that it's located in:

Ok that's enough of the eye candy post. I won both of these certificates and I'll go through the bid analysis I did to give me the best shot to win these liens.

I'll also go over the one I lost and the two other backup liens that I had if I didn't get these first two certificates. We can see if my bid analysis would have put me in a position to win those.

Comments (4)

  1. Another update. The owner of the vacant lot finally sold his property. He paid $177,500 in 2001. Then he listed it for sale in early 2011 for $425k. Eventually he started dropping the price in late 2011 to $349,000. Taking it down to $299k in July 2012 then $275k in November 2012. Finally sold in December 2012 for $225k. Not bad considering similar lots are listed for sale for $169.9k just a block away. I earned my 4% for 11 months.

  2. As an update, the owner of the commercial building paid off the lien after 2 months. Still made more in the 2 months than if the money sat in a savings account, CD, or money market.

  3. Jean, Thanks. Due diligence is a must! I've been studying Florida tax lien auctions for a couple of years. I don't get there as often as I get to Arizona (I'm in Illinois), but there are so many opportunities in FL! I like the fact that the certificates are mostly sold through online auctions AND when the certificates are foreclosed, they actually sell the properties through online auctions too. For those not familiar with Florida (not you Jean) - it's different from other states that are certificate states. In Florida, they sell certificates that you earn interest until the owner pays the taxes. If they don't pay during the redemption period, then as the certificate owner you petition for foreclosure. But in Florida, the certificate holder does not automatically get the property. The county auctions it as a deed sale, and the certificate owner can bid to buy the property or just let someone else buy it and the proceeds cover the certificate and interest - which are then paid to the certificate owner.

  4. I love tax lien investing! I invested in Florida tax liens and deeds. Each state is so different - must do your due diligence. Congrats on those wins!