Anyone used Zeus Auctions software yet? (TaxLienCert auctions)

[JR Haseloff]

Just wondering if anyone has purchased Tax Lien Certificates through the new Zeus Auction software yet.  (https://www.zeusauction.com)

I'm used to the COUNTY.realtaxlien.com software where you put in bids and don't know the results until the batch closes.  With Zeus, it's more like eBay.  You place your max bid and it automatically proxy bids up to your max and tells you who is currently winning.  

I guess my question regards your experiences with the outcomes of these auctions.  It seems that corporate money comes in and bids the interest rates down so low (or the premiums so high) that it's not worth the time.  With the auction due to close on 16NOV (couple days) I'm hoping that I actually win some of the $20k in certs that I'm currently winning.  

I'll keep you updated.

[JR Haseloff]

SUCCESS

So actually a successful auction and I really enjoy the format more than the county.realtaxlien.com format. 

At one point, I was winning over $40k worth of tax lien certificates with low/no premiums.  As all liens earn 10%, your actual returns become much lower as you dish out premiums (that won't earn interest and aren't refunded back to the investor at any time).  When the investors came to work to day they bid away all the low-hanging fruit and left me with a little more than $4k worth.

There was a lot more of the 'corporate money' that came in towards the end of the auction time and dropped the profitability of many of my bids, though.  The last 15-20 minutes before each batch closed there was a lot of activity and a lot of 'sniping' where investors attempted to get the last bid in as time expired.  The website also noticeably lagged the last few minutes prior to batch closings. 

RESULTS

Of the 450 or so liens, I bought 24 with a face value of $4,114 for $4199 ($85 in premiums, about 2% to face value).

 

QUESTION

One thing that still confuses me is why some investors bid so much on the premium.  For example a certificate would have a face value of $1000 and some are willing to spend $250 premium to get the certificate. The investor never sees that premium again and the cert will only earn 10% (or $100) per year.  And if the homeowner pays off the back taxes the next month, you're out the premium and only earned one month of interest (roughly $8).  Why would someone take that chance?