January 4, 2015
Arizona Tax Lien Sales 2015
Dear
Premium Members,
Welcome
to 2015.
As
the Holiday Season winds down and the COLD reality
of Winter sets in, I think fondly of the many
times I have visited Arizona for a February Tax
Lien Sale.
Well,
let's once again get ready for tax lien sales in
Arizona.
Arizona's
maximum
interest rate is 16 percent (%). The redemption
period is up to three (3) years. The bidding
process is by bidding the interest rate down so
that the first bidder who bids the lowest interest
rate wins the lien. It is possible for more than
one bidder to bid down to zero percent and a tie
is held by a random selection. Any liens that are
not sold at the auction are struck off and sold to
the State. These liens become available as
over-the-counter (OTC) liens. OTC tax liens may be
purchased after the sale on a first-come,
first-serve basis. After the annual sale, check
with the County and find out when they will
publish their list of OTC liens.
So
let's evaluate where we want to invest in Arizona
and why.
The
first
question is "where do you live?" If you live in
Arizona or maybe Southern California, then you may
be within driving distance of some sales. If not,
you may need to take advantage of the many sales
that are offered online.
Check
out our most recent tax sale calendar at: Calendar.
If
you
are considering Maricopa County (Phoenix), then be
sure to visit their website at Maricopa.gov. It
has a ton of useful information. One thing I like
to do each year is follow the results from the
previous years, which Maricopa provides. It can be
used as a rough proxy for other Arizona Counties.
Maricopa is the most populated County so
competition is usually the most fierce in this
County.
Nevertheless,
let's look at the results for the last few years.
Data: From Maricopa County Website (Maricopa.gov
2015)
What
do you notice from the table?
Well,
the first thing I notice is that last year's
average interest rate was only 5%. This rate was
similar to the boom year of 2005 when everyone was
an investor and no price was too high-in this case
no interest rate was too low.
I'm
sorry to say that you can probably expect about
the same average interest rate this year.
When
times
are tough and gloom and doom abounds (e.g., tax
years 2008 and 2009), interest rates are higher,
more liens are available and more liens get struck
to the state and end up on over the counter lists.
In better times (e.g., tax years 2003 - 2005 and
last year in 2014), there is more competition,
lower interest rates and fewer liens that are left
over after the sale.
This
should
not come as a surprise. It is human nature. In
good times, everyone is an investor. In bad times,
we all hide and wait for the storm to pass.
Well,
as
you can see, optimism is back and interest rates
are not as high as they used to be. Before you get
too depressed, please remember that these are
averages, which means there are rates above and
below what is present.
So
how can you get the maximum interest rate?
Here
are a few important ideas that I have used to
maximize interest rates:
1.
Single
family homes in great locations are the most
attractive; therefore, the competition will be
stiff and the interest rates low. If you consider
buying other types of property, such as land,
apartments, rental properties, etc. you'll get
much higher returns.
2.
In
any given sale, the most sought after properties
are not only single family homes, but they are
also in cities. Consider looking at liens on
properties in the country, or at the outskirts of
the County. Most people will not be familiar with
these areas and may pass them them up.
3.
Look for an Offline Auction. Online auctions allow
people to easily invest from anywhere; therefore,
the competition is greater and the interest rates
will be lower. If you want a higher interest rate,
then it makes sense to attend a physical auction.
This
year I would like to look at the Yuma County
Arizona list.
You
can find the list as follows:
Visit the County's website and look for the Treasurer's
office. Navigate in the Treasurer's office and search
for Tax Sale Information.
http://www.yumacountyaz.gov/government/treasurer/tax-lien-information
The Yuma County Tax Lien Sale will be held on February
24, 2015 at the Yuma County Board of Supervisor's
Auditorium at 198 South Main Street in Yuma, Arizona.
The auction starts at 9:00 AM; registration is at 8:00
AM. The list is provided on the website or at the Sun
Newspaper at 2055 S. Arizona Ave. Yuma, AZ 85364 (928)
783-3333.
The tax sale list is
located here: Yuma
County Tax Lien List
Do
your research on individual properties by visiting
this link:
http://treasurer.yumacountyaz.gov/treasurer/treasurerweb/
Go
through the list or any other Arizona list and
send me questions and I will be glad to help.
Happy
Tax Lien Investing in 2015,
Michael
Williams
