All Forum Posts by: Jerry K.

The media company may own the billboard structure. Check on that. They could removes the billboard if you break the lease. Frank Rolfe on Biggerpockets, used to run a billboard company. He sold it years ago, but still operates a website with a forum and resources for operating billboards. https://www.obuniversity.com/i... No recommendation implied, I just use it when I have billboard questions. I invest in tax liens and sometimes there are billboards on the parcel.

I bought a PDF he had (not sure if he still offers it on the website) on ground lease negotiation. He recommends a shorter lease (5-10 years) with a slowly increasing percentage for you, the land owner. 15% - 20% or more of the billboard rental. Lots of older leases are for very small fixed payments, but the bigger companies will agree to percentage of face rental for a good location - according to Frank. Note that billboard leases are made in 4 week increments - so there are 13 payments a year not 12.He talks about minimum payments when there is no advertising on the board, insurance, etc. 

Arkansas handles tax sales differently than most states. A lot of it is handled at the state level. Get your reading glasses on, there is a lot to learn there. I don't have experience in that state, but I have looked at their process at a high level. https://www.cosl.org/Home/Cont...

I've used Mark Manoil of Manoil Kime PLC in Phoenix, AZ. Mark wrote a book on Arizona tax liens. He has handled 5 or 6 of my lien foreclosure cases. He even reminded one county treasurer office of an Arizona ruling when the county first said the foreclosure time had passed. It hadn't. I ended up with 3 parcels via foreclosure and the others resulted in the owners paying the back taxes, all the interest, and my attorney fees for filing the tax foreclosure (owner paying attorney fees if they pay off the liens during foreclosure is an Arizona thing)

Quote from @Eric Liu:

@Jerry K.  I am looking to purchase tax liens in AZ. I saw some parcel with lien open back to 2007, does this mean those liens never got redeemed?  And from 2007 to 2011, the rate is 16%, and then 2012 to 2013 rate is 7%, looks like the lien holder was changed, did the first one got his/her investment back, if the property owner did not redeem, who paid him/her? And why the first holder not foreclose since she/he held more than three years?  If I purchase all the back liens am I able to foreclose?

2014	1302042	Open	I	00001657			2016	0	$617.48	16%
2013	1400045	Open	I	00003835			2015	0	$591.28	7%
2012	1400045	Open	I	00003835			2014	0	$554.09	7%
2011	1302042	Open	I	00001657			2013	0	$640.87	16%
2010	1302042	Open	I	00001657			2012	0	$744.45	16%
2009	1302042	Open	I	00001657			2011	0	$769.52	16%
2008	1302042	Open	I	00001657			2010	0	$383.79	16%
2007	1302042	Open	I	00001657			2009	0	$360.24	16%

Eric,
Without knowing the county it's a little difficult to have a definitive answer. Counties can have different rules for tax liens. I would say from your table that the liens have never been redeemed. The county treasurer would have the actual details. If this county treasurer has a website you can se if the lien have ever been redeemed.

That is a reasonable assumption that once the interest rate changed, it would be a new lien holder on the liens. If you pay the subsequent taxes (aka sub taxes) you get the same rate on your liens as you did on your original. Note that in other states you can sometimes get the highest rate on sub taxes if the owner has not redeemed.

Assuming the owner has not paid any of the back taxes, I would say the original lien owner did not get their investment back.

@Will Sifert was probably right when he said the property may not be worth redeeming. But also never rule out that the original lien holder may have forgotten about the liens, or, (gulp) may have passed away.

A key point to know is that if you do not foreclose on a lien within 10 years of the date of the oldest lien you hold on the parcel, then you lose your investment and any interest, and the right to foreclose. I had liens on vacant parcels in Arizona and kept paying the taxes each year because I was earning 16% interest on them. The taxes were bought in February 2011. I started foreclosure in January 2021. My attorney said it was a good hing I did because I would have lost all my liens if I waited one more month. You don't just lose your oldest lien, you lose ALL your sub liens as well. So it makes sense to foreclose earlier than the the 10 year maximum period. By the way, I did have one person pay the 10 years of taxes and interest on one of the parcels. That was a nice payday. I ended up with 3 of the actual parcels through the foreclosure. Those came through a couple of months ago. I'm in the process of selling one of the parcels right now and I;m getting a few thousand more that my original investment, accrued interest and attorney foreclosure fees. Not a big payday, but at least it's even better than the 16% rate.

You need to check with the county if you buy the back liens on when you can foreclose. If you are buying the actual original liens, than as long as they are over 3 years old form the date the oldest lien was originally sold, you should be able to foreclose. If you are buying only the latest lien, then you have to wait 3 full years before you can foreclose.

Originally posted by @Timothy Borg:

@Jerry K. I have one of my first liens coming up on the 3-year mark from up in Navajo County, AZ.  I am trying to decide if I should just let it sit or start the foreclosure process.  It is kind of a strange situation, I only have the lien for that one year. There were not anymore liens sold.  I believe the lot was merged together with the lot next door.

Agree with Will, you need to contact the county and see what the state of the underlying parcel is. No sense if starting to pay for a foreclosure. If the parcel was merged with another, and that parcel is up to date, it may just take a letter to get the taxes and interest repaid.

@Will Sifert I'll answer your questions from a couple of your responses here;

So in AZ, you have to wait 3 years before you can start the foreclosure process, but until you do the owner can redeem at any time? Yes, the owner can redeem anytime before you foreclose, or during the 10 year window. Also, in most counties now in AZ, they allow multiple owners of tax liens. Used to be if you bought a lien one year and the owner did not pay the next year either, if the lien holder did NOT pay the subtaxes the next year, the original lien was combined with the new lien and both were sold in the next year's auction. Whoever bought the new lien was buying 2 years of taxes. The original lien holder would get their money back plus interest, once the auction was over. Many lien holders used these liens as sort of a "one year CD" (or 2 year etc. depending on how long they may have paid subtaxes before stopping). Now however, if the lien holder does not pay the sub taxes, then they keep their lien, and any new liens on the property are sold separate from the earlier liens. You can have multiple holders of liens. If I did not pay sub taxes and a new lien was sold to somebody else, and if I never foreclosed, the new lien holder could do a foreclosure after their 3 years and I would get paid off from their foreclosure.

After 10 years the lien is cancelled and removed, you lose everything you invested (is that correct?) Correct, the lien holder loses everything after 10 years if they did not foreclose. I originally thought it would be just be the one 10 year old lien, but my lawyer told me it is all subtax liens too.

How much do your attorney's fees roughly cost for a foreclosure? You're right it varies by how much work is needed and different lawyers have different payments. My lawyer wrote a book about Arizona tax liens and title companies trust his foreclosures for doing all the right contacting of any owners and lien holders. AZ is a Judicial Foreclosure on tax liens. It starts at about $2,500 and can go higher. On one of my liens the parcel was owned in an LLC name and that required more time and work. The good news is that in most AZ counties, if the owner, or any other lien holder redeems the tax liens once the foreclosure has begun, they have to pay my attorney fees. That has happened a few times over the years for me.

@Will Sifert Three years is the minimum period you have to hold the lien before you can foreclose. You have 10 years from the date of purchase to initiate foreclosure. I paid the sub taxes each year and started earning 16% on those taxes. In AZ if you don't initiate a foreclosure before the 10 year deadline, then you lose all your liens on that parcel (principal and interest) - not just the oldest lien.

For a person like me who is looking to maximize interest rate return, I just keep paying the sub taxes and accruing the 16%, making sure I start foreclosure before the 10 year date.

I have been doing Arizona tax liens since 2010. @Jay Hinrichs is correct about liens - they rarely end up foreclosing in AZ. I just got my third vacant residential parcel through foreclosure today. All 3 foreclosures happened this year and are in Yavapai county north of Phoenix. I buy liens on structures and vacant land. I'm mainly after the interest rate return, not the property. Vacant land in AZ (outside of Phoenix - Maricopa County) get pretty high rates of return. I avoid Maricopa because of the lower rates and all the competition. Plenty for me outside of that county.

These 3 liens were 16% and actually there were 4 I had to foreclose on because the statute of limitations on my liens were about to expire. One person paid off to redeem and it was 10 years of taxes at 16%. Don't get excited - the taxes were about $150 per year the last few years, but the early years were better. I had to pay each year's taxes and got 16% on all years. The interest was greater than the principal when they paid off.

I filed in January for foreclosure using Mark Manoil as my attorney who specializes in tax liens in Phoenix. The first one paid off (redeemed) within 6 weeks and had to pay my attorney fees in addition to the P&I. I got the first vacant parcel in October, the second in November, and the third today in December.

My original goal was to offer all three to investors/builders, but I did put the first two on Zillow as FSBO while I waited for the third one to complete. Already have a person going to drive by one this weekend and they are a cash buyer. Similar lots in the neighborhood sold for $5k up to $20k in the past year. The one I got today is the best as lots near it sold for over $20k in the past 18 months.

I also will contact the neighbors of the lots and see if they want to buy them.

Have a lawyer who has experience with billboard leases take a look. I don't know CA law and I'm sure there are local laws too. Clear Channel is a major player and they probably want to keep those boards. With the help of the lawyer, and after the proper notice of terminating the original lease, offer Clear Channel a lease for 10 years. Start at 15% of gross billboard revenue paid every 4 weeks (that is the usual billing cycle for billboards = 13 payments a year). Have your lease agreement increase 1% each year of the gross revenues for the first 5 years then remain steady until the end. You might find billboard leases might typically go as high as 25% of revenue so do the research and adjust accordingly. Sure you could go higher right at the beginning, but why not make it palatable for Clear Channel to agree? They do all the work of finding advertisers and changing the signs. Oh yes, make sure they have insurance in force as well.

Just saw this email thread. In Arizona, if you tie for the lowest bid, the software randomly picks a winner from the lowest bidders. Makes no difference when you put your bid in.