All Forum Posts by: Jerry K.

@Nick Vafa I had good luck with an over the counter tax lien in Pinal county a few years ago. Earned 16% for a few years and almost landed the property via foreclosure. The owner paid it off with about a week before the foreclosure was going to be finished.  I also used Pinal as the basis for a blog post about if over the counter liens are worth the time. That blog post is here - Tax Liens: Over-the-Counter. Junk or Needle in a Haystack?

Agree with both @Lynnette E. and @Nathan Gesner  You'll want to see if CBS (Outfront Media) actually owns the billboard or the property owner. If your friend owns it, get a bill of sale from him or her so you have proof of ownership. If Outfront does own the billboard, then get a copy of the ground lease with them. You want to know those terms so you can notify Outfront to begin paying you the rent and the percentage of rent, and any escalation amounts that are in place. Also the lease will let you know length of the ground lease. You want to be ready in advance when it comes up for renegotiation. Get traffic counts at that time.

@Nick Vafa Nice post. I also invest in tax liens mainly in Arizona but look at other states too. I like to use online tax lien auctions, but I also visit the areas I invest in so I have an idea of what the underlying properties are like. (I live in Illinois)

I have a few blog posts about my tax lien payoffs on my Biggerpockets blog at this link (Blog title "Lien Online Me") if those types of posts interest you.

@Michael Rashfal There is a BP member who used to run a billboard company that may be able to help. Look up Frank Rolfe in the members list and send him a private message.

@Stephen Mallen, If you can't buy the tax lien on the parcel directly from the county before the auction, you'll want to open your account on the Mohave County tax lien auction site soon. It's free to open the account, but you'll need to give them social security numbers, and set up your bank account number. The county uses a company called Grant Street Group that runs the online auction. It's much better to set up your account now, well before the auction.

Some notes about online auctions;

1. You'll need to deposit an amount with the county through the auction website well before the auction opens. Looks like Mohave wants 10% of the total amount you will bid. You use the ACH service via the online auction website to make your deposit. ACH is simply a way to transfer the funds from your bank to the county. If you don't win the lien, the county transfers the money back in full to your account within a few days of the end of the auction.
2. You'll be giving them your social security number through the website. You have to do this or they will not let you bid. It's safe as long as you do that via the link to the website (making sure the URL at the top of your screen shows "https://"  the "s" is the important letter to see. Also do that from your home computer connection. Don't do it from a public Wifi like Starbucks or a hotel.
3. The Mohave auction website address is: https://www.bidmohave.com/
4. I have a Biggerpockets blog post about steps for beginners to online tax lien auctions here: Basics for Online Tax Lien Auction process

@Stephen Mallen - Ok, so you probably bought the property before the tax foreclosure was final. Good thing it finished with nobody else contesting and paying the back taxes.

It seems a little strange that the same people who owned the parcel you just bought, are still the owners of the parcel next door and only two years of taxes have not been paid. Yet your parcel was sold and had 3 years of taxes not paid already. I would have expected both parcels to have the same number of years not paid. You may want to check the Mohave county website and see exactly how many years have not been paid on the parcel. If it is more than 3 years you might be able to buy the lien straight from the county today. Ask the county Treasurer if they sell unsold tax certificates over the counter. You need to have the parcel number so they can check.

I have seen where more than 3 years have not been paid on a parcel. The person who buys the tax lien can begin foreclosure right away since it has passed the 3 year redemption period. It never happens on a really valuable parcel, but it does happen. That may have been the case for the buyer of the lien on the parcel you already bought. The lien buyer may have bought a lien that no other investors bought for several years, so the investor started the foreclosure immediately. Vacant or mobile home parcels are most likely to have that occur.

I just found a link on the Mohave county website that gives you the steps to file a tax lien foreclosure. It is at this link.

@Stephen Mallen, @Dennis Weber and @Ned Carey have given you great advice. I buy tax liens in AZ and Ned has great points. 

Regarding buying the lot next door;

1. You say it has 2 years of taxes owed for about $300. Where did you get that information? Does somebody else own a previous tax lien? You don't have to give the address, but what county is this in? Maricopa county had different rules for tax liens than other AZ counties when it comes to how many people can own a tax lien on the same parcel.
2. If you buy the lien, and if it is not in Maricopa, then yes it could be the second year of taxes owed and you would be the only lien holder - thus the only person who could foreclose for taxes. If it is in Maricopa, there might be another party holding an older lien whose lien will hit the 3 year redemption period first and could foreclose before you.
3. If the lien goes to auction, there is no guarantee you will win the lien. If it is an open outcry auction (meaning you have to be there in person bidding out loud against other bidders) you could easily lose to another bidder who immediately bids Zero. In AZ you win the bid not by bidding the most you will pay, you bid the lowest interest rate you will accept to be paid on the lien. If someone starts by bidding zero percent, they win. If the auction is an online tax lien auction, then you have no idea what other people have bid. You enter your bid (lowest interest rate you would accept on the lien) and wait for the auction to end to see if you won. If you bid zero percent, and 3 other people also bid zero percent - then the software randomly chooses a winner from the four of you - and it might not be you.
4. The good news for a tax lien foreclosure in AZ is that it is a judicial foreclosure. Yes it costs money (anywhere from $1,800 to $3,000) but the judicial process clears the title since they contact all lien holders, family, etc. and give them time to contest your foreclosure and pay off the back taxes and interest. In the counties I have started tax lien foreclosures in AZ, if a person pays off the lien and interest during the foreclosure process, they had to pay all my attorney fees as well. Not sure if that is in every county in AZ, but that has been my experience with tax lien foreclosure in AZ.

Regarding your purchase of your current property;

1. Ned had a good question - you say you bought from a company that held the lien they bought the last year, but you had to wait until October to get clear title. Are you sure they had bought a tax lien the last year? It is possible they bought a lien that included the previous 4 years of taxes and they did the foreclosure, but that is rare. 
2. When you bought in January, did they give you a Quit claim deed? That would make sense since, as the others said, all a Quit claim deed does is give the holders rights to the property. They might have started a foreclosure and had to wait until that closed in October to give you clear title. But, oh boy, if that was the situation and somebody came forward during the foreclosure and paid it off, you would be out of the property you bought in January. When did you move in after buying the property?

If that the situation I described above is true, where you bought the property from the tax lien holder, they had started the foreclosure and it completed with no redemption by anybody and you got clear title, AND if the property next door is owned by the same people (now deceased) who previously owned the property you just bought - then you might be able to get the next door property through the tax lien foreclosure process once the 3 full years are up from the date of the first tax lien was issued on that property (assuming you own the oldest lien on that property).

The only way to get the property before a tax lien auction is to get the owner to sell. Being deceased with no heirs, there is still an estate that needs to be settled. Probate would have to be opened and now we are out of my realm of knowledge. Talking to a real estate or probate lawyer could be the best way to find out. Offer to take one to breakfast or lunch and for the price of buying their meal, you could get your answer on what it would take to try an buy a property in that situation before the tax lien auction.

Just a note on the 3 year redemption; it is a full 3 years from the date of the auction. So if you bought the first tax lien on a property in 2019 February auction - you would not be able to foreclose until March of 2022. If in any other county other than Maricopa county, then you also have to pay the taxes each year until foreclosure or you could lose your lien because the county will sell it to a new investor and pay you off for your lien and interest earned.

When you said the property next door will have a lien for two years of taxes, that makes me think it is not Maricopa county. If that is true and you are buying a lien for 2 years of taxes, you are getting the previous lien date so you are already one full year into the redemption period. In other words, if you get that lien you could start foreclosure in March of 2021 since the previous year lien was created and sold in February of 2018. But again, you have to pay the taxes each year until foreclosure. That means paying them by December 31st each year.

@Account Closed Any update on the four other foreclosures? Based on Zillow history, it looks like you haven't put the original two up for sale yet. Interesting to follow your tax lien story on here.

@Jay Hinrichs Oh I know about them! I have to pay the taxes each year the owner doesn't or I lose the liens to another investor. I can use spreadsheets to keep track of about 100, after that I would need a special tax lien software system. This was a reminder that the remaining liens I bought back then will need to be foreclosed on by February 2020 or I start to lose the oldest year liens. Arizona has a 10 year limit on holding a lien or it expires worthless.

I just received a check from a northern Arizona county that pays off 7 years of tax liens I hold on a vacant land parcel. I earned 16% on the money. This was a simple vacant lot that had a foundation but the home was never built. I explain it further in my Biggerpockets blog post with a few pictures and show the check stub that breaks out the lien principal and interest payments on each year of taxes that I paid until the owner redeemed a few weeks ago. Read it here at; Tax Lien payoff post.