Iowa Tax Lien Sale Online

[Dennis Weber]

Just got thru participating in a Tax Lien sale online.  It was in Iowa  where the interest and amount of lien never changes. You bid down ownership of property.  The bid choices were PTW (proxy to win), PTT (proxy to tie), and Direct Bid.  If you tie then there is a random selection.  There were supposed to be 4 batches but the server crashed so they put all the certs in 1 batch and extended the time.  It was working at the end of the 1st batch and I won two properties.  That is, until they batched them all and put them in the single batch.

Okay, I placed mostly PTT bids but many were PTW and placed over 40 of them.  All the way until the end, I was tied with other users.  When the auction was over, I noticed that there were only 6 or 7 winners of all the liens.  I won nothing.  Nada.

Assuming it wasn't rigged, does anyone know what I may have done wrong?  It was a confusing mess and not a lot of instructions on the auction site that I can see.

Thanks, Dennis

[Jeremy Goemaat]

@Kent Braaksma ... And of those two counties with less bidders than parcels, how long before the auction did you see those numbers?  I ask because redemptions happen every day clear up until the auction plus new bidders could register clear up until the Thursday before, so that can really skew the bidder:parcel ratio.  I know in 2018 I registered online at several counties that looked good, just to have one drop the parcels available to bid on by 30-40% (!) on the Friday before the auction - a day AFTER registrations were cut off, so I was locked in.  They apparently waited until the last minute to bulk remove all their redeemed properties from the list. :(

I got several emails over the weekend (since I put in some pre-bids), receiving one just 4 minutes BEFORE the auction started stating "The parcel (xxxxxxx) has been removed from the sale for cause.".  So apparently they can remove them clear up until minutes before the auction starts.

I'm also nearly positive the large institutions are bulk bidding on nearly everything, just playing the numbers game.   While the auctions were under-way, you could see almost all parcels (even very poor ones) had large numbers of bidders bidding.  I think 5-10% single-digit returns are fine by those large groups.  That's double or triple the 2.5% CD rate.   From my experience if you bid on anything in some of the smaller counties/towns, you should really pay someone to do a drive-by before paying any subsequents.  Many small county assessors have large assessed lot values, when really you can't give lots away in some of these small towns as they are all migrating away.

I can tell you doing online for 3 years now, each year has been more competitive, even with many more counties going online.  I think it was 30-something last year, but almost 60 this year.  I know my county treasurer and this was her first year online and she loved it - much less hassle (and cost!) than holding a live auction.

On another note regarding profitability, I did research other states: NE, IN, etc ... and found that Texas Tax Deeds are my 2nd and next choice to look into.  I like the fact they hold auctions every month and there are several hundred counties to choose from.  This once-a-year thing in Iowa is hard to plan and budget for.

Sorry to ramble on, just hoping this info might help some folks make an informed decision ...