All Forum Posts by: Jerry K.

@James Bitakis I pulled the last few years of tax lien sales results for Will County in IL and threw them into a spreadsheet. I then supplemented the data with the type of property and city of the parcel per the county records.

This is for all tax liens sold in 2012, 2013 and 2014.  The average tax lien rates were:

Note, if the lien was not sold to an investor it is held by the county at 18%, so the rates - especially for the Residential, are skewed higher by the junk houses nobody bid on. If the house is decent, the lien is typically 0-2%. #NA are mostly vacant parcels that the county has no property type listed in their database. It could be farming acreage or vacant residential.

I then did another pivot table for average rate by city in Will county across all property types:

Note the #NA means the parcel record in the county database was blank. Usually farmland outside of city limits.

@Joshua Dorkin Congratulations on the 11th birthday of BP. It may be inappropriate to ask, but I'm a social buffoon so I'll ask; we all know you're the father... 

but who's the mother of BP?  (see the comedy set up there? It's all in the wording...)

Can't say it any better than Wayne. I will add one point. Tax deeds rules differ in each state that sells them. Florida tax deed sales result in the buyer of the deed owning the real estate right away. In other states, even after a tax deed is sold, the original owner might still have a time period to redeem the property.

@Michel Steele The article Manny had was from 2013. The counties in Florida that do online auctions have been adding rules to eliminate the institutions that can open hundreds of thousands of accounts. The number of bids are way down since 2013.

Those institutions then moved to Arizona where many of the tax lien auctions are also online. I keep track of all the results in a few counties in AZ. In 2011 for Yavapai county, the total number of bids for all liens was 280,000. In 2012 the number of bids jumped to 7,000,000. In 2013 it peaked at 99 million bids!

Yavapai added the same rules as the counties mentioned in the article in Florida and thus in 2014 the total bids dropped to 18,800. And in 2015 the total number of bids was only 10,525. So the counties are leveling the playing field.  Also, the banks seem to be dropping out as they are finding other avenues for safe interest rate returns.

I have some of these online auction stats in a BP forum post I do after the auctions are complete each year.  The 2015 Yavapai county result summary post is this link.

@Brett Fitzgerald It is possbile to invest in tax liens and deeds via online auctions. It adds a whole other wrinkle to due diliigence. I live in IL but I invest mostly in AZ and othe states via online auctions. i have a few blog articles on it here on BP. You can read a few at the link below.

There is a lot to learn in tax lien investing. Each state, and sometimes county and city, can have differnet rules. You need to know those rules before investing.

@James Wheeler Don't worry about hurting the feelings of a lien holder. Does the deal make sense to pursue from a numbers perspective for you? If so, then move ahead.  

You'll never see the lien holder. You will, however, deal with the owner. 99% know they are behind on the taxes. You reminding them of that fact will not start you on a positive negotiating vibe. 

The goal should be to get the owner out of a troubling situation without dehumanizing them and make the deal work for both of you. You'll run into owners who feel they should get market price and above for a building they have not kept up. Many will have been contacted by others offering lowball offers and possibly using scare tactics. They will be downright nasty to you, You can read through some stories here on BP of investors who have been berated by contacting homeowners in the same situation due to other investors being uncouth and rude to the distressed owners. 

You'll need to develop two things; 1) a respectful and effective marketing campaign. 2) a thick skin for when you come across an owner who has had to deal with 5 other "investors" who have tried scare tactics on them and the owner unloads on you and calls you names.

I'm a lien investor and I'm mainly in it for the interest rate return. I fully expect the taxes to be paid at some point. I don't care how they are paid. Other lien investors do look for properties they can eventually foreclose and own. Why would it matter to you if a lien investor is mad?

The group of homes with liens you should focus on are the ones where there is no mortgage, the owners are the beneficiaries of an estate and they never lived in the house. They are less emotionally involved and would be easier to negotiate with. Do a couple of searches using the "Search the site" box at the upper right of the screen. Terms to search are "yellow letters", "estate", "probate" etc. then also look at the bottom of the posts/articles for the links to similar discussions.  Good luck!

@Hobart King Thanks for the nice comment on my blog. You'll find you're going to learn a lot as you look at different states and counties. I still make mistakes on the statutes in the states/counties I invest in! People here on BP will correct me - and I'm thankful for that.

If you are good in spreadsheets (and as a bank statistician I bet you are), you will find online tax lien and tax deed auctions addictive for the spreadsheet analysis you can do. Just remember to take action at some point.

@Hobart King Back in the 90's, in the early days of ebay (before they even went public), I bought a used guru course on tax liens. I had already bought liens locally in the late 1980's, but I wanted to learn about other states. Also, by buying used, I wasn't subjected to the calls from the course company trying to sell me more expensive upgrades. The main thing I got from the course was all the county offices in the country that held tax lien certificate and tax deed sales. Plus I bought the course for something like $25 instead of the $200-$300 original cost.

Pretty amazing @Joshua Dorkin! More affirmation on what you are building here.

@Anne Gibson I would like to hear more details on your Sedona rental and how you found the deal and details on the home.