All Forum Posts by: Elaine E.

@John Underwood The case that set precedence for this tax lien change was not in Colorado - my concern is that other states will also follow suit, and they may, like Colorado, do so without reasonable notice or consideration to premiums paid or impact on investors who invested before the change.  That said, other states don't require premiums so investors' risk may vary. 

Same, this update is shortsighted and stabbing investors in the back. They should have grandfathered in liens sold before this change. My condolences to everyone who has paid the high premiums over the last couple of years who now have no way of making that money back. 

PSA - Colorado Tax Lien investors, take note of this email from Mesa County. I expect other counties will follow suit. 

"We wanted to reach out to our active tax lien investors in Mesa County. There is a new law that is slated to be enacted on July 1, 2024 which will adjust the process to obtain a tax deed. The biggest change will be that tax deeds will not automatically be issued to the tax lien holder through the tax deed application process. A tax deed will be issued to the highest bidder at the public auction-which will take place approximately 4 months after the application for tax deed. (Our auctions will continue to be held online.) This 2nd auction provides an opportunity for the property to be sold for "market value" so that the owner does not lose their property for less than the market value. The opening bid will be the combined cost of the lien with the included Treasurer's fees and costs. Some have asked about whether they would get their premium returned, premium is not included in the opening bid. (This update will not apply if you have a tax deed application in process and it is deeded prior to July 1, 2024.)
Manufactured Homes are not currently included in this process. However, the legislature is working on a legal process that would address the certificate of ownership process for obtaining title for a manufactured home. We anticipate that there will be a moratorium on all Certificates of Ownership for manufactured homes until new legislation is passed/enacted. If we receive any applications for Certificate of Ownership, prior to the moratorium taking effect, the application fee has increased to $750.00.
Additionally, we have increased our tax deed application fee. This will reduce the need for our office to send out Statements of Expense. Tax Deed application fees for Real Estate (R accounts) will be $1500.00.
Please feel free to reach out with any questions. We will do our best to assist you with how we will implement this legislation in Mesa County.

Jackie Campbell Mesa County Treasurer and Public Trustee's Office"

Exactly, @Will Sifert! In the long term over several years, interest rates and returns on tax liens should go up, as investors will only be able to value the interest rate as the return on their investment, with no potential for a property windfall. However it will take time for this information to spread to everyone… I hope the counties don’t fleece newbie investors too badly this year.

Wow, that's crazy, Will... I just read the CO Attorney General's opinion piece and details of the Tyler v. Hennepin case. The AG basically says that the tax lien sales themselves are fine and dandy, but the issuance of deeds will likely be contested going forward. I think it's very likely that more counties will stop issuing treasurer deeds as a result. Not just in Colorado, but likely across the country.  I can't believe this isn't being talked about more widely. All the tax lien gurus out there certainly seem to be keeping their lips shut about this...

Considering there is a 3-year redemption period on Colorado liens, investors this year wouldn't have a chance of getting a deed for 3 years. Even if some counties are still issuing deeds today, what's the chance that tax deed issuance will be stopped in 3 years, given this recent case? Pretty high. Plus, average premiums in Colorado tax sales last year were around 7%. That means you're only making a ~7% return annually when you deduct the premium from the 15% interest rate. But, you only get that IF the homeowner doesn't redeem/pay their tax within a year (which most do), otherwise, your return will be even lower. Premiums MUST come down this year. Otherwise, investors are looking at paltry returns for a time-intensive investment, and no chance of ever actually acquiring property through the liens. The scary thing is that I've been researching tax liens for months yet didn't come across anything about this case until today, so I expect that a lot of other investors are in the dark. Anything else I'm missing here?

Thanks, @Robert Parks! Sounds like a good set up :)

@Joe C. Thanks, Joe! I appreciate you sharing your experience. I agree on the maintenance getting worse being a potentially big risk. Good insights for us to think about :)

@Dave Foster An interesting viewpoint as well; condos are definitely higher risk!

Thank you everyone for your thoughts, we have a lot to consider!

@Bill B. Yeah that is absolutely insane! We're considering a 1031 exchange to something better, just not totally sure yet. 

@Bill B.  I considered buying him out, because yes it does well and our guests are generally happy. Just the community showing some early signs of decline worries me. And the fact that it's a Condotel, and we're intertwined with the resort even though we don't use their management program. I'm just not sure if the subpar management is bad enough to bring down property values over time. 

My partner and I are debating on selling our short term rental townhouse (technically, it’s in a condotel community but we manage it independently).

It’s in Florida and doing fantastic right now, and cashflows better than ever (12% return, self managing - we make ~20k per year).

My partner is fed up and done with dealing with guest and maintenance issues. He wants to sell and get rid of it.

I like having a cash flowing asset, and diversified portfolio. I am considering hiring an all inclusive management company instead (our return would then be around 5.5-6% annually).

However, the community has been going downhill. There have been more poor quality guests in surrounding units, maintenance of the grounds and amenities has been slacking, yet management just bought new souped up golf carts… The resort is getting bad reviews on Google for poor service (the staff IS rude, even to me before), and the resort staff is not addressing those review online like they used to. Idk if it’s still recovering from COVID or if this early signs of further decline.

Home prices are record high and we would make around 50k in appreciation by selling now. Any unbiased opinions or insights?