2013 Tax Lien Sale Report

Earlier this month, I wrote about going to another tax lien sale. This one was run a bit different than the previous ones that I had been to, so I was pretty certain that I wouldnt walk away empty handed like the last 2 times I went.

The sale started at 9 and I got there a bit before 830, and the place was already packed. I got my number and went to find my father in law, who also attended the sale, and has in the county for the past 3 years (He’s getting close to taking over deeds for some of the first parcels he purchased back in 2009). After I sat down, him and I chatted about which properties we were hoping to get (We each had a list, and one parcel showed up on both of ours) and waited for it to start. I had my list broken down into categories – an “A” list, with ones I really wanted, and a “B” list, with ones that I wanted a bit less than the A ones. Once it started, they announced that there were about 125 people there (a record) and they got started.

As I mentioned earlier, this was different than the others. In this county’s, they draw your number then you tell them what property you want that’s still available. If you dont like any that are left, you do have the option to pass. By the time that my number was called, all of the properties from my “A” list were gone, and so I moved on to my still totally full B list, and selected a property on the very northern edge of the county, backed by some BLM lands and the mountains. My father in law was called a bit later, and he still had one from his list that he selected.

Not long after, everyone that was in attendance was called and they let people who were not interested in staying for round 2 to pay the county what they owed and leave. Those that wanted to wait decided to stay. Since there was still 50+ properties there and the line to leave was rather long, my father and I decided to stick it out and stay for the second round.

As luck would have it, my father in law got called fairly early in the second round and selected another property, and I was called shortly after and selected another parcel from my “B” list. Thankfully it was still there – I feel pretty lucky that I didnt get stuck with something totally lame.

All in all, the two parcels that I picked cost less than $110 total.

What Happens Next?

So now the grand question of what happens next. Well, the county took my payment and will mail me a certificate saying that I have a lien on the property, and they will record it in their books. The owner of each of the two parcels owes me about $54, plus a 3% late fee and 15% interest. The amounts are small (though there were some parcels that were 6k+), but that’s still a significant amount of interest – it’s WAY more than I’m currently earning with lending club. If neither of these people pay me, the county will send me the taxes for these parcels next year as well, which I can then decide to pay or not. If I pay for four consecutive years, I can then move to take over the property deed. The steps that I need to take are outlined in the state statue that authorizes these sales, but it consists of making a good faith effort (whatever that means) to find the owner and let them know you are planning on doing this, advertising it in a “newspaper of record” and a few other small things. Once the appropriate amount of time has passed, the property deed will be yours!

There is one unknown with this however  – both of the properties that I bought liens on were owned by companies (in each case, LLC’s). It is possible that these entities file for bankrupcy. If that does happen, I will still have a lien on the property, but I’m unsure of where I will stand otherwise.

For those curious, I had a few criteria for properties. I wanted something that would be in a nice area (both have mountains to the east) and would have a few acres that H and I could build a cabin on and spend some long weekends with family and friends. Both of these met the requirements.

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