Iowa Tax Liens

[Terry Koepp]

I am looking for advice about purchasing Tax liens in the state of Iowa. 

I live in Linn county and want to get information on how to invest in Tax Liens.

Terry

[Jerry K.]

@Terry Koepp I invest in tax liens, but not in Iowa. I found this document from the Linn County Treasurer that describes the county tax lien sale and the forms for registering. Note - rules change so look for the 2016 form when it comes out.

2015 Linn County Basic Rules of the Annual Tax Sale

If this is your first time investing in tax liens, I suggest you get very familiar with the Iowa statutes on tax liens - the sale, the holding laws, redemption periods, foreclosure process, etc. If you are unfamiliar with them, hopefully an experienced Iowa property tax lien investor will offer to discuss things with you here on BP. As I always suggest, take a tax lien focused Iowa attorney to breakfast or lunch to get a good handle on the process.

At a high level, some Iowa tax lien rules are;

• that you earn 2% per month on the tax amount paid
• you bid the percentage of "interest" in the property. It starts at 100%. The lowest bidder wins the lien. You can bid as low as a 1% interest. The owner holds the remaining percent of interest (99% for the owner in the case of bidding only 1%)
• You are paying the full amount of taxes owed and any county administration fees. Interest is earned only on the taxes owed - not the fees
• It costs $100 to register for the auction in Linn county. (non-refundable)
• The list is published in a local newspaper (Cedar Rapids Gazette in 2015) for free. If you want to buy the list from the county, it costs $100
• In Linn county, no cell phones, pagers, tape recorders, camcorders or other audible electronic devices can be used/turned on during the auction. Laptop/notebook computers allowed only if operated on battery packs
• If you buy a tax lien certificate and then later want to sell to a new investor, (called "Assignment of a tax lien certificate)  there is a $100 fee to assign the certificate to the new investor
• There is a short window of time for you to register and you'll need the proper documents. Read the rules for 2016 so you know the dates of registration.

That is just a few of the rules and fees. There is a lot to learn. Get a good mentor and attend an auction just to see how it operates if you don't feel educated enough to invest this year.  

Good luck with your investing!