Maricopa County Arizona Tax Lien Sale Results So Far
For any who are wondering...This four day Phoenix sale--one of the largest in the country--advertised liens on about 20,000 properties. Bidding is on the interest rate you'll accept; starts at 16% and goes down from there. Redemption rate is around 99% here and the liens trumps nearly all other liens, making it a safe investment play for up to 3 years (though you could be redeemed tomorrow...oops). Many of the players are East Coast and other institutions after a return that compares favourably to, e.g, a CD. Though there's one old lady bidding without notes or counsel, who's probably lain out millions already, all at 5%, driving the institutions crazy. Guess she's fed up with the lame return on her CDs.
Most properties so far have been bid down to 5% or even lower (if you want to beat the old lady), with only a few decidedly marginal ones (leftover slivers, retention ponds, etc.) going for the full 16%. Until last year, the average rate after bidding was around 10%; last year it dropped below 8%, this year it could drop below 6%.
There still could be a jackpot if you get a nice property that you can foreclose in 3 years and sell, but as noted above, it's very unlikely. I've reseached and visited a few apparent gems that offer a slightly better chance of possession, but at the risk of offending tax lien aficionados, there are probably greener pastures than this county.
Loon,
Your best opportunity to make money is still available. Buying or optioning the property prior to the tax deed auction is where the action is.
Mitchell Goldstein
Boy, isn't that the truth. My sister and brother-in-law just moved to Scottsdale, and I'm here learning about the market here; it's manic compared to my small hometown. We bought about fifteen liens today, only on really sweet properties we assessed to be likely candidates for non-redemption (including several lots that back up on a national forest) and thus foreclosure in three years.
But we've been exploring lots of other options here too, and I'd much prefer working pre-foreclosures and sub2s (even buying from the foreclosure wholesalers/hard money lenders) than groveling for table scraps amongst haughty institutional investors who are happy with 5% and TV infomercial addicts who are wondering where all the great returns are that they've heard so much about. But it's been interesting to see just how a well-run tax lien sale goes; they crank through 600-800 properties an hour for four days. And I can understand why there isn't a lot of interest in this forum for tax lien sales, at least not this highly-overhyped urban market.
Just returned from the Maricopa auction today. We conducted a seminar for people who want to invest in liens.
I agree that contacting people prior to the sale is a good strategy, but it works better for deed states, not lien states since the person is not threatened with the loss of his property when a lien is issued.
You are right about the declining yield. That is why we advise skipping the auction and buying "struck off" liens, those that did not sell, directly from the county. They pay the full 16% and if you buy the liens that are 3 years old or older, there is NO redemption period. You can start the foreclosure on the property immediately.
Give it a try!
Bill Young
I agree, the struck-offs look good, but there's usually a reason they were passed up. As awesome as Maricopa County's web site is--for each property you can pull up (and blow up or reduce) a map, read actual photocopied Warranty deeds, observe past tax lien redemptions, etc.--it cannot always filter out the chaff like retention ponds, unbuildable washes, and sites with leaking gas tanks.
I'm wondering about the actual returns on your 16% struck-offs. In your experience, how many underlying properties even worth the foreclosing expense to acquire? Haven't they been kind of picked over by then? Seriously, I'd like to know.
[ Edited by loon on Date 02/11/2004 ]
Yes, I would like to know too. Please give more details about these "struck off" liens. Awaiting your response.............
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