I had decided that I would concentrate
on Florida tax liens for three reasons: the 18% maximum return, the
fact that I could stay in my parents winter home if I needed to
visit, and the fact that the laws in Florida seem to take some of the
risk (and potential award) away form the tax lien investor. So why
and I writing about Arizona? By law, Arizona tax lien auctions happen
in February; Florida auctions happen in May. I was looking for the
experience of going through an auction before the Florida auction
season kicked off.
There seem to be two major sights
covering most of the tax lien auctions for Arizona and Florida. I'll
get into more details on them in a future blog post, but for now,
here they are:
It took me a little while to track then
down. I first ran into this site which does give some good info, but
is aimed as selling a product:
From there, I started looking at
official state county sites to make sure I was not being scammed.
Some county sites are quite good, many are terrible. Most had a link
to one of the first two links above, so I was convinced enough that
they were legitimate. I do suggest you go to the site of the county
you are interested in as some of them do have good information.
I decided in Arizona I would
concentrate on Coconino County. I am no Arizona expert, but I have
been there three times. With all the news of a real estate crash in
Phoenix, I thought the Flagstaff area would be safer. As the dates
for the Maricopa County (Phoenix) auction happened first, I figured I
would just be a lurker for that one. After spending some time
looking, though, the anticipation was too great. I put together a
bankroll of $5,000.
I ended up placing five bids in the
Maricopa County tax lien auction. The maximum rate in Arizona is 16%,
so I placed my bids from 14% on a nice house in Phoenix down to 8% on
a mansion in Sedona. I was shut out. Most properties went in the 5-7%
range. Becoming a tax lien millionaire was going to take longer than
I originally thought.
Coconino County was the next auction I
participated in. I kicked my still untapped bankroll up to $6,000 and
place 29 bids ranging form a high of 15% down to 6% on a real
beautiful property. Again, I was shut out. This second strike caused
me to really bear down. Although I started looking at Arizona as just
a practice for Florida, I was now determined to actually win a bid in
Arizona instead of just seeing how the auction process worked.
As a last ditch effort, and with less
time to research, I jumped into the Mohave County auction. I only
spent enough time to look through the first batch of properties, so I
decided to cast a wide net. I bid on 43 properties in batch 1, and my
bids were from 7% down to 5%. I won four bids (these bids were all
ties, and I lost another five ties). Here is what I got:
FACE VALUE ASSESSED AT RATE
$1,672.97 $169,900.00 6%
$951.47 $150,200.00 5%
$1,254.61 $153,300.00 6%
$1,247.37 $150,400.00 6%
As you know from my first post, that
first one was redeemed already for a small profit.
Currently finishing up the Florida
season, so I will update on that in the next post.
