All Forum Posts by: 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 ...

@Chris Warren.  How many bidder numbers did you have registered when you bid on those 15 properties?    Just 1?  You are correct, it is a random drawing for every single parcel, with all parcel drawings for a county executed in milliseconds at the end of the "bidding window", so you never see it happen.  

Most counties (even the small ones) had HUNDREDS of bidder numbers attending, with more bidders than parcels in every case I saw.  As I said in my previous post from a month ago (above) the online Iowa auctions is not a game for small players as your odds are very low.  With the huge number of bidders you would have to register to be competitive, it can now take 8-12 months of interest just to make back your registration fees! :( (and you may never make it back if the parcels redeem too soon).  I saw bidder counts on the website at may counties go up by 50, 150, or more every day or so, so we know there are large bidder blocks registering.

As far as the bid-down ... almost all other bidders started at 100% and used a 1% Proxy ("low") Bid, so there is no incentive for you to lower your starting bid as the system will automatically lower theirs to match, then whoever wins is just stuck with a lower ownership percentage if you have to foreclose and it's no benefit to anyone.

All counties I saw had almost all bidders going 100% start, 1% bottom, with maybe 5% of bidders were 100% and low of 50%, but again, I don't think it's worth bidding down to 49% to just get a 5% better chance of a win.

I did see Polk County still does live auctions, but it's very expensive.  This year $100 per bidder reg fee plus $80 per bidder "agent fee" if the person bidding is not the DIRECT owner of the bidding entity - they were very strict on this in their documentation.  I think that's pretty crazy.  Not sure how they justify that additional $80/bidder fee.

@Juan Jorge I also have bought some Iowa tax liens for several years.  The online auctions are extremely competitive now as you don't know how many (# of or $ value) certificates you've won until the end of the bidding window when they are all settled and last year they didn't send those emails for 15-20+ minutes.  There are now 8-10+ counties per bidding window, so you could be on the hook for a lot of money - that's why I see there are a few large entities with 100+ bidder numbers now going in - and that is expensive at $45-$65 PER bidder registration. :(  It almost takes an investment group to bid online now.

Can I ask the expert lawyer in Des Moines you recommend for Iowa foreclosures?  You are right, if you get one not familiar with the process and does not serve notice correctly or work well with the county treasurers, the can mess the process up.  And FYI - now there is some precedent that a 120 day affidavit that should be filed immediately AFTER the Treasurer’s Office issues the tax deed. This is discussed more in Iowa Code 448.15 - this can complicate how quickly you can sell an Iowa foreclosure if you want to be safe.