All Forum Posts by: Jerry K.

@Leigh G. You'll see me post about the OTC (Over the Counter) liens in the forum on occasion and I usually say they are the "picked over" liens. But if you read my blog posts, you'll find one where I randomly pick three OTC liens in Pinal county in AZ. The first two were slivers of land not worth the cost of foreclosure if the owner never repaid the lien. The third parcel actually looked like a good parcel and you would earn 16% interest from day one. 

I also bought a parcel OTC list in Pinal a several years ago that would have been a great payoff if I ended up with the parcel. I actually made it to the foreclosure part and the owner redeemed at the last minute. That was ok too since not only did I earn 16% for three years, the owner had to pay all my attorney fees for the foreclosure as well.

I usually look at the OTC list in the summer when the states I look at for investing are slow. There is a lot to sort through to find a decent parcel on the OTC list so I usually don't recommend it for a beginner because they don't know the difference between a good lien and a bad lien. By all means though, take a look - the interest rates are great, just make sure the owner will redeem or the underlying parcel is worth more than all the taxes you invest plus foreclosure costs.

@Eric Perkins There is no one source that I know of that has all the tax liens available for every state. Not all states are tax lien states. Some sell tax deeds which means you are getting deed/title immediately.

It is a very fractured "industry" because it is governed by state laws, usually handled at the county level - all on disparate systems. Some areas the city handles the tax sales, some states like Arkansas handle the deed sales at the state level. 

Some counties have certificates available all the time, most have a sale once a year. You have to pick your state/county/city and begin to look at if/how they sell tax liens and the rules for buying, holding, selling, foreclosing, etc.

@John Thedford In Arizona there is a full 3 year redemption period for the owner to pay the taxes back. After that, the tax lien holder can start a tax foreclosure that is a judicial foreclosure. It can take some time but at the end, if the owner or other interested parties do not pay, then title is given to the tax lien holder. 

Florida is the only tax lien state I know that when the tax certificate holder starts a foreclosure, it actually goes to a deed auction. 

@Leigh G. You'll find @Ned Carey is a huge fan of tax liens! Since he sent up the "Bat Signal" my "@mentioning" my name, I do almost all of my tax lien investing in Arizona. I can second everything Ned mentioned. I also like the book "16% Solution" as a basic starting book for tax lien investing.

Tax lien investing is extremely state and many times county  or city specific. I learned the most by reading the state statutes then reading the county rules for the areas that I was interested in investing. 

Although I bought my first liens in Illinois (where I live) in the late 1980's, I took many years off until I found Arizona online tax lien auctions in 2009. I switched to investing in Arizona liens but still look at other states and am familiar with Florida, Illinois, Indiana, Colorado, and South Carolina. There are other Biggerpockets members here who are much more involved in those states.

As a new investor, I would recommend sticking with your local area in Arizona first. I get to the areas I invest in in AZ about every 18-24 months to check out new areas and review old areas so I'm aware of the markets.

I actually love Ned's advice of taking a tax lien attorney to breakfast or lunch to pick their brain. I did so myself on an Arizona trip and he helped teach me a ton of little quirks I never would have learned on my own until I put investment money into it. The price of a nice breakfast for an attorney is well worth the payoff.

I started in tax liens by reading about them in real estate books. They were only mentioned in passing in those books. From there, I bought a tax lien guru course off ebay (before ebay was even a public company). That gave me the list of all the counties that sold tax liens. I had already bought liens in Illinois so I had a working knowledge. That course had a video tape of people who invested in liens and those were interesting to watch - but overall the course was too generic since it could not cover every state or county. 

At least I paid less than $100 (might have been less than $50) for the course and I didn't have to go through the sales funnel of the guru who had a sales company try to get the original buyers of the course to pay for expensive training. Some of those courses also try to get you to just hand over $25k or more for them to invest in liens for you. 

You're in Maricopa county which is one of the largest tax lien auctions in the USA. They used to take several days of auctioning liens each year at a live auction, and they never sold all the liens. Then Maricopa was one of the first to switch to online auctions several years ago and they now sell all almost all the liens and get the tax money the county needs to operate.

I don't invest in Maricopa county, but the online website is easy to use. They provide a lot of good information on the parcels in the auction. They also have a lot of information from the previous auctions. One of the county specific tax lien rules for Maricopa is that if you buy a lien and the owner does not redeem (pay back the taxes and interest) then you as the investor can choose to buy the next year taxes or not. If you don't, you keep the lien for the year you bought, and someone else can buy the next year's lien. But your lien is older and you will reach the date of going for a tax foreclosure first. In AZ you can foreclose on tax lien after 3 years from the date of the tax lien purchase. However, you need to know if anyone bought a tax lien on the parcel in the years before you did. 

There are many rules to learn - how to open an account online, what your deposit needs to be, when you need to pay the balance (within 24 hours) - and that's just to bid. There are the statutes of buying, holding and foreclosing on a lien too. How you bid - you are bidding the lowest interest rate you will accept. It starts at 16% and goes lower in 1% increments. You have no idea what other people bid so you are entering your bid and hoping it is low enough to win. You can change your bid or cancel it before the bidding closes, but once you win, you have to pay. You will basically put in a deposit that indicates how much in total you want to invest. Once you reach that level, the auction software cancels any other bids you have so that you won't overspend.

Lots to learn. What is your end goal? earning high rates or interest on your money or getting the property in foreclosure? Know that about 97% of all liens are redeemed by the owner before you can foreclose. 

I have some posts on my Biggerpockets blog about Arizona tax lien investing including some of the basic things you need to know. It is by no means a course, but the posts give you an idea of what you can expect and a glimpse at some of what I do.

Lien Online Me is a link to my blog posts.

Wow @Jason Brown that's quite a life you've created! I plan on getting to that sort of life in a few years - but' I'll be old. I love your picture with Courthouse Butte in the background from Sedona, AZ. That city is my target retirement home when I finally escape Illinois. Programming skills can help you in the tax lien and tax deed game. Passive income from these investments can be good as a portion of your investing.

@Richard Licon Are you looking to get the underlying property or are you more interested in just getting a good interest rate return on your money?

@Account Closed Congratulations! Looks like a lot sold just a few down from the Saguaro Dr. lot in October. The Wuptaki lot on Zillow shows it last sold in 2006 for $9,500. Some of the tax liens on lots I have in northern Arizona were along the same lines - they sold for $25k in 2006 and dropped to $4k at the bottom. They now are selling for $7k - $10k. I just haven't started the foreclosures yet. 

Good luck on selling them quickly. Going "By Owner" to start? You can check to see if the recent sales were to builders or investors.

@Richard Licon - What are your goals for investing in tax liens? Since California is a tax deed state and not a tax lien state, where do you plan on buying tax liens? 

Each state is different on how tax liens are handled so you need to become an expert in the state you wish to invest. 

Share a few more thoughts on what you want (or expect to gain) from tax lien investing and the BP crowd will share our opinions and advice.

@Account Closed How did the second case go for you? Paperwork in on the first one? Hope it all is closed up before year end for you.

@Jana Cain I found the BP discussion link on this topic. You can read through all the posts to see how this is being played out and what people on BP are saying:

Someone bought a private road for $994 in San-francisco

I invest in Tax Liens in Arizona and streets come up quite often. There was just a portion of a street in Sedona, AZ that was in last year's tax lien sale.