All Forum Posts by: Kyle W.

@Colby Fryar I live in Sierra Vista so I'd be interested. I have no experience in Real Estate, so I've been studying AZ and TX laws and looking at student housing in Tucson. Other areas I'm researching are short term rentals, buy and hold foreclosures in AZ and TX. My primary interested cities are Sierra Vista, Tucson, Phoenix metro,  Austin metro.

@Darrell D. I heard rumors. We will have to wait months for the VA, lenders, military resource websites etc. to update this information. In the meantime, conflicting information will need to be vetted as usual. This is fantastic news. Lump this with the "Forever G.I. Bill" and being able to seek local private health care when further than 30 minutes from a VA offered healthcare facilities. I also believe better transition information is being provided to newly separated, so they hopefully take advantage of everything available to them. Thanks for sharing this information and especially the source.

Hello Laura,

I am not sure how you can verify occupied residence without maybe driving by. For the other questions...

I too was looking into tax liens in AZ. I am in Cochise County and had similar questions earlier this week. I recommend looking into AZ Title 42.

Arizona is a tax lien state not a tax deed state. Being a tax lien state, you are only paying off the taxes the property owner owes. That money goes to the County. You bid down the return starting at 16%, and the county awards the lien to the investor willing to take the least amount of APR on the purchased lien.

For example, a single family home in Chandler owes $6,000 in back taxes, interest and fees that is being auctioned this Feb. You bid $6,000 at 16%, I bid $6,000 at 15% and down it goes. Maricopa gets their $6,000 up front by you, the homeowner now owes you $6,000 at 4% (county collects the 12% difference when redeemed).

You only own a lien on the property now. You cannot recover your investment at the 4% rate until the homeowner sells, or refinances or whatever. You cannot force redemption until 3 additional years have passed since you purchased you tax lien, 2023. You then pay a lawyer to foreclose, and the property now goes to auction. The highest bidder gets the property, you get your $6,000 at 4% back unless you were the highest bidder.

Tax lien owners would put us at a higher priority of redemption over other liens like mortgages and second mortgages. But we are inferior to State Income and Federal Income tax liens on the property. You also run the risk of losing priority if another investor buys any future tax liens for auction on that same property.

Since you cannot redeem until 2023, the property owner may not pay taxes for those years as well. I will buy 2021's back taxes at $1,800 at 5%, someone else can do similar for 2022 and 2023. Potentially, if you do not secure your priority by purchasing all the subsequent liens, even forcing the APR down to 1% or 2%, you could run the risk of the property selling at foreclosure and not paying off your tax lien from three years ago.

Tax liens will require a good amount of liquid capital to be held for the purpose of foreclosing and winning your already "tax lien" owned property. You could run this on properties you really think will pay the liens off at the APR that is desirable for you. A lot of people are cycling their money like this.

Pima county has statistics for last few years of average APR 4-8%, only 40-70 people bidding, and 70million plus in tax liens purchased. Check out the statistics where you plan on bidding. Maricopa is online only, so there could also be more out-of-state investors. Pima and Cochise are in-person auctions.

Long winded, but I hope this answered your questions.

I appreciate the responses so far. I continued to study AZ Title 42 and 33. Some Title 48. Very complicated stuff but I do feel like my time in this has built my knowledge worth more than my "hourly rate".

Some Pros are 

1.) Purchasing these tax liens in this particular county (Cochise) requires in person bidding. So that means less out-of-state competition. 

2.) APR starts at 16% and gets bid down to lowest APR bidder, potentially giving high rates.

Some Cons are

1.) However, for me to stay at the top of the tax lien priority list, I would need to purchase every subsequent delinquent tax lien or risk another investor jumping the line. Potentially bidding the APR down to 1-2%. Even the awful idea of 0% just to stay the only lien holder.

2.) AZ requires three years from lien purchase before foreclosing so that would require $22,000 every year for the next three years if they are delinquent. Plus guaranteed tax rate increases each additional year for funsies. This $66,000+ and the initial $74,000 seems like too much liquid assets to be tied into a single property that probably won't give me much ROI.

3.) $4,000 or so to complete foreclosure, 30-120 days.

4.) During foreclosure sale, some other investor with deeper pockets could bid higher than what I would be owed ($140,000 all in 4 years from now) and they would keep the $2.2MIL property. Unless I open my deep pockets some more.

So in conclusion, the statistics for the previous tax lien sales have approximately 50-70 people doing the bidding, but purchasing 70M+ in tax liens. These are not just fellow beginners, these individuals are representatives of major players. The sold liens also have an average of 4-8% to the investor. So that means the county gets the back taxes paid up front and whatever the difference is between the lowest bidder and max APR of 16% (Good on gov't). Again, this doesn't seem like a good start with my light wallet.

I hope this has helped someone that has thought about tax lien sales in Cochise County Arizona. Or in some other capacity in general. I am going to look at Tax Deeds in Travis County Texas now. There seems to be a great deal Feb 4th, but that is also on the door steps auction. Even more research now.

I am new. To everything Real Estate. I'm almost done with the BRRRR's book, listened to over 100 hours of Podcasts and 40 or so hours on YouTube videos dealing with Real Estate Investments. I started by looking up any properties that owe back taxes so I may be able to find a motivated seller. Here in Cochise County, AZ... I fell in the rabbit hole.

I have been searching the entire county, looking at various properties that will go to auction Feb 19th. As I'm looking, I see Days Inn owes $73,770.28 in back taxes. This same property is for sale on Loop Net for $2,200,000. From my limited understanding of purchasing Tax Liens in AZ, my process would be to bid against everyone or anyone else interested in the property with interest rates starting at 16%. 

So in this fictitious scenario, I win the bid, pay the back taxes to the County, get a Real Property Lien that must be paid off with interest (hopefully 16%) within 3 years. If I don't get paid plus interest I foreclose on Days Inn.

Am I following this correctly? I can potential pickup a 2.2 MIL property for under 100k? I am not too clear on what happens to the mortgage if there was one. I have read that Real Property Liens jump the line over mortgage liens, and easements never go away until paid off, and the only lien that has a higher priority of Real Property is Income Tax or Federal Tax lien.

I live in Sierra Vista, AZ, so not much to pick from. Can anyone help? I am new, but I go full-bore when I think I am ready and am chomping at the bit. I refuse to be a bad statistic in investing, so I want to make informed decisions at every step.