Iowa Tax Liens
I went to the tax lien auction at one of the county court houses here in Iowa. It was a good learning experience, but investing wise, it was a bust.
There were 365 liens available with 165 bidders registered. There was approximately $400k in liens. 16 bidders did not show up. It cost $25 to register.
The format they used was a lottery system. They read off the parcel list and then "drew" a number. If you wanted it, you said sold. If not, pass and they draw another number.
My number only came up once for a $250 lien. Some people had their number come up 7-8 times.
Ryan
Emersonbiggins
The $25. registration would keep a lot of lookers out.
Would the $25. keep you from bringing 10 friends with you?
Did everyone that had his or her number pulled purchase the lien?
There was one lady that I talked to that hired 35 people at $40 each to bid for her. She ended up with quite a few liens. There was another gentleman that was paying $12 an hour per person for about 30 bidders to be there.
Most of the people there were part of one of these large groups. They had a list of what to take and what to pass on. Most of the properties went to the first number called and all but a select few went to the second if the first passed. A couple of "dogs" went through a number of bidders and there were about 5 that no one wanted.
The larger counties in Iowa charge $100 or more to get your "lottery" ticket.
Ryan
Emersonbiggins
Have you figured a way to beat the system?
Maybe you could rally a large number of people to register and attend the auction. This would disrupt their apple cart.
Do these paid participants register in their own names?
Do the paid participants purchase in their own names then transfer ownership to their boss?
[ Edited by cycledog on Date 06/20/2007 ]
Unexpectedly, I am approaching the due date for the next payment on my tax lien. Taxes are due every 6 months and on the one lien I won, the next payment is due Sept 1st. I can make the payment 14 days after it is overdue.
For next year, I plan on getting a bunch of people together (or hiring if i have to) and getting a bunch of liens. Is there are market for liens after the fact or would it be better to recruit investors?
Ryan
How do you make $ with these liens. I am familiar with fl tax liens and tax deeds. How does Iowa work?
Iowa pays 2% per month simple interest.
I just checked the website and it looks like the owners paid the $120 that was due at the beginning of September, so I wont be able to increase my investment. I was hoping they would be late and I could pay the taxes to get a little more money invested. Oh well, they still havent paid the original lien. I might end up with a house for $263!
Ryan
Why would they not pay the older tax bill first; thus delaying (or eliminating) the possibility of foreclosure? Of course, if they paid by mail without talking with the county treasurer, they may not realize there is an older bill outstanding,
In about 2 1/2 years you can remind them, tho!
[quote]
On 2007-09-14 11:38, Emersonbiggins wrote:
... the owners paid the $120 that was due at the beginning of September.... Oh well, they still havent paid the original lien. I might end up with a house for $263!
Ryan
In Iowa, the redemption period is only 2 years. So I only have to wait 1.5 years now!
Of course the lien I have represents a year of unpaid taxes. That could have happened any number of ways. I wouldnt be suprised if they dont even realize they owe it.
Ryan
It looks like the owners of the house that I have a tax lien on have no paid the last 6 months of taxes. On Monday, they will be 14 days deliquent and I have the option of paying the $122 owed and getting another lien. This June will be make 1 year from the original tax sale.
This lien might actually get to the point where it was worth the time and effort to go to the auction.
Ryan
I just got a "bill" in the mail today for the additional $122 that was due 2 weeks ago. Looks like I am going to be able to add $122 to this tax lien.
When I saw the envelope, I was sorta nervous that it might be a check to pay off the balance. Obviously, I am hoping this one goes all the way even though the house is only assessed at $25k.
Ryan
Ryan
So you only paid $250 for your house. Now you have to pay another $122. And the house is only worth $25K. So when you get it, and if you sell it for 4/5 of its value (25K X .80 = 20K minus your cost) what kind of % profit is that??? Sounds like a 9-5 J.O.B. would be a higher payout -- NOT
NEVER apoligize for the value of the house you get. I think of it kind of like playing monopoly. I love those first 3 blue places on the first side of the board. Low priced (cheap) but they bring in cash easly. Pay attention to some of the post here. Guys pay whatever,160K, do rehab20K sell for 210K. They only make $30K but what if something went wrong, how much would they lose. Maybe it takes a little longer but for us guys starting out its great.
I called the county assessors office yesterday to make sure I understood why i got the notice. Sure enough, my opportunity to pay more towards the lien. I also did a quick search online to see if the owner was in foreclosure, but they werent. Looks good so far.
Ryan
I am still sitting on this lien and the additional payment I made. It has been a year and 4 months. Does anyone have any information regarding the process in Iowa for turning a lien into a deed?
Thanks,
Ryan
It looks like they havent paid their latest taxes. Does anyone know how to turn an Iowa Lien into a deed?
Ryan
"There was one lady that I talked to that hired 35 people at $40 each to bid for her. She ended up with quite a few liens. There was another gentleman that was paying $12 an hour per person for about 30 bidders to be there."
Watch out that this could be illegal. Be careful.
I am pretty sure you are right about the year and 9 months. I am just going to have to find a good attorney that has handled these before. Any ideas how to track down an attorney that has done this before without calling all of them in the phone book?
As for being illegal, I never considered that. If it is, they certainly werent being very secretive about it as they had big signs out on the lawn of the court house for the people associated with these groups to know where to go. They all met out front to get their bidding packets which contained a list of the liens being offered and then told them if their number came up, whether they should take it or pass on it.
Also, I got a bill for $133 from the treasurer yesterday. The latest taxes havent been paid either. That brings the total to $505 invested. The lien has grown to $607 with interest.
Ryan
Emersonbiggens:...
Perhaps the Iowa Lawyers Association (State Bar Asssociation or similar name) would have a listing of which attorneys specialize.
[quote]
On 2008-10-15 09:06, Emersonbiggins wrote:
I am pretty sure you are right about the year and 9 months. I am just going to have to find a good attorney that has handled these before. Any ideas how to track down an attorney that has done this before without calling all of them in the phone book?
A
I contacted an attorney yesterday about my lien. I got their contact information from another tax lien investor that has used them before.
I believe I am still just sitting and waiting until March when the 1 year and 9 months is up. Still keeping my fingers crossed.
A year and 9 months will be up on the 18th. The lawyer I talked to will be ordering a lien search and sending out the notices to all the lien holders (ie mortgage, etc) starting the 19th. The 90 day clock starts after the county treasurer receives the affidavit of service to these parties. After that 90 days is up, i get the deed.
So far I have $523 invested, with interest, it comes to $686. In April, I am pretty sure I will have the opportunity to invest another $133 for the taxes that are due in March. Bringing the total with interest in April to $832.
If I had to guess what will happen, I will receive a check from the bank that holds the mortgage right before the redemption period is up. So either I will be paid, or I will have a house sometime in June.
Emerson:
If the mortgage holder or the landowner decides to pay off the lien s/he will actually pay the County Treasurer who, in turn, will pay you
If I had to guess what will happen, I will receive a check from the bank that holds the mortgage right before the redemption period is up. .
[/quote]
I got a copy of the Affidavit that my attorney sent to the county treasurer today. It outlines the lien search he did on the property and who all was notified that I intend to pursue a tax deed and that they have 90 days on their right of redemption.
90 days left and I will either have a check or a deed.
I got my check from the treasurer. In this case, I only ended up making $13 after paying attorney fees. The rest of the costs were added to the lien.
The attorney advised me that most people pay the lien as soon as they get the notice that we are getting ready to apply for the deed. In the future, I think I would send a letter to the home owner before going to the attorney. If that got them to pay their tax bill, it would have saved me $150, making this lien much more profitable.
Either way, it was quite the learning experience. Looking forward to trying it again in the future.
Ryan
The overhead for Iowa is extremely high specially for Polk county. We gave up on Iowa after spending a large sum of money hiring 100 temps to bid for us.
If you are bidding on tax lien certificates in which most counties are offering with bids due the end of May, then you will not be taking possession of the property and/or have the right to sell it. You will have to hold the lien certificate for two years before you can start the proceedings to move the parcel to a tax deed sale.
Otherwise, the tax certificate sales I have participated in the past is hit or miss. Sometimes you will luck out and no one else will bid and your 18% bid could stand. Other times big investors come in and bid .25% and earn 5% over the life of the certificate.
Thanks useful information.